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State III heavy-duty truck sales upsurge before implementation of new standards

More and more regions in China have started to implement the State IV emission standards for diesel vehicles starting July 1, 2013, meaning that State III-compliant diesel trucks will be prohibited to sell and register.

Dealers have been stocking up on State III-compliant trucks in the past two months and registered the vehicles through special measures, then delivered them after July 1, according to media reports.

Orders of the State IV-compliant vehicles remained few due to dealers’ piling up of State III vehicles. “We are considering halting production of the State IV vehicles for the next two months given the rare market demand of such vehicles,” said a person from Dongfeng Commercial Vehicle Co. (DFCV).

 

Demand for State IV products may be released next year

According to an insider of China National Heavy-Duty Truck Co. (CNHTC), consumers still worry about the unclear implementation timeline of the new standards. In fact CNHTC has well prepared numbers of State IV-compliant products for the market. However, without a clear implementation date of the new standards, the enterprise dares not headline its new products.

It costs ¥15,000-¥30,000 ($2,407-$4,815) for a new model to pass through the test of the Ministry of Industry and Information Technology (MIIT) and more than ¥100,000 for the China Compulsory Certification or the “3C” certification. For a truck maker with dozens of products, it takes large amount of time and money to get all birth certificates for its State IV-compliant trucks. More worrying was that if the State III models can still be sold at the market, the State IV products will not be competitive on price.

As predicted by a heavy-duty truck dealer, demand of State IV products will be released gradually in the second half of 2014 and dealers will mainly sell State III products before then. “All in all, the State IV products are ¥20,000-¥30,000 more expensive than the State III products, a worthy consideration for price-sensitive consumers,” said the dealer.

“We predict that dealers will mainly consume inventories of State III products and State IV products will not push sales in the second half,” said the aforementioned DFCV person.

 

Low inventory restrains State IV supplier production

“The unqualified State IV diesel remains the largest obstacle in promoting State IV vehicles,” said the insider of CNHTC to Meiri Jingji Xinwen or National Business News during an interview.

According to Yang Zaishun, vice secretary-general of China Passenger Car Association (CPCA), the SCR system is the most adaptable technology at current stage given its small change to the vehicle and high tolerance to oil quality.

Based on relevant statistics, the consumption of AdBlue in China totaled 11,000 tons in 2011, accounting for only 1 percent of the global total. And the annual demand of AdBlue for SCR system will reach 7 million tons in five years if the State IV emission standards to be carried on strictly.

Some industry insiders once believed that the demand of AdBlue would upsurge upon the implementation of the State IV emission standards. However, this market prospect has not occurred as predicted.

“As the State IV emission standards have not become compulsory nationwide, the AdBlue technology is mainly used in public bus systems of major cities such as Beijing and Shanghai,” said an insider of the commercial vehicle industry. AdBlue technology is not yet common practice in second- and third-tier cities and still faces a long road ahead in being popularized nationwide.

Medium and small private enterprises are the main forces of AdBlue production and located mainly in Shandong and Hebei provinces. Without core sales channels, these enterprises usually sell AdBlue online or through auto parts stores.

According to Yang Zaishun, consumption increase of AdBlue will not take a long time through the mature channels of Sinopec and PetroChina if the implementation time of the State IV emission standards can be confirmed.

(Rewritten by Jennifer Chen based on author’s article in National Business Daily)

Implementation of State IV emission standards in major cities

City

Date of implementation

Sales permission of State III-compliant vehicles

Supply of State IV diesel fuel

Measures

Beijing

July 1

Yes

Sufficient

State III vehicles sold before June 30 can be registered.

Shanghai

July 1

No

Sufficient

State III vehicles sold before June 30 cannot be registered.

Hangzhou

August 1

Yes

None

N/A

Nanjing

July 1

No

None

Only State-IV diesel engine vehicles weighted over 3,500kg can be registered after July 1.

Guangzhou

July 1

Yes

Yes

State III vehicles sold before June 30 can be registered by October 1.

Shenzhen

None

Yes

Rare supply

N/A

Xi’an

July 1

No

None

State III vehicles sold before June 30 cannot be registered.

Chengdu

July 1

Yes

Yes

State III vehicles sold before June 30 can be registered.

Lanzhou

July 1

Yes

None

State III vehicles produced before July 1 can be registered. State III vehicles produced after July 1 cannot be registered. No State IV vehicles sold in this area.

Urumchi

July 1

Yes

None

State III vehicles sold before June 30 can be registered.

Taiyuan

July 1

Yes

None

State III vehicles sold before July 1 can be registered.

Wuhan

December 31

Yes

None

N/A

Zhengzhou

July 1

No

None

Implementation date of State IV standards for heavy-duty vehicles and State V standards for natural gas vehicles: July 1; State III vehicles sold before July 1 cannot be registered.

Ningbo

July 1

Yes

None

State III vehicles sold before June 30 can be registered by August 1.

Zhanjiang

July 1

No

None

State III vehicles sold before June 30 cannot be registered.

Source: cvworld.cn 

 

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