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Bright prospects for Chinese new energy buses in the overseas market

China produced and sold 547,000 and 543,000 buses in 2016, down 7.4 and 8.7 percent respectively, according to data from China Association of Automobile Manufacturers (CAAM).

New energy bus sales, on the other hand, increased 24.41 percent to 129,000 units, reversing the negative growth trend of the overall bus industry.

During recent years, new energy buses in China have gained rapid development in both market scale and technological level under strong government support. Besides domestic cities and regions, markets overseas have also begun to see the emerging adoption of new energy buses made in China.

China’s new energy vehicle production and sales totaled 517,000 and 507,000 units respectively in 2016, ranking No. 1 in the world for the second consecutive year in both production and sales volumes. This market will also show a momentum in development in years ahead after the explosive growth in 2015 and transformation in 2016. However, there are a limited number of new energy vehicles made in China exported overseas, with the new energy bus as the “long star” in exports. China’s new energy buses have started to be sold overseas since 2009 when the “Thousand Units in Ten Cities” demonstration project was launched.

In 2009, King Long sold the first hybrid bus to Singapore, marking a historical breakthrough. Moreover, Yutong, Higer (Suzhou King Long), Xiamen Golden Dragon, BYD and other domestic bus makers also marched into overseas with their new energy buses. With eight years of operational history, China’s new energy bus market has accumulated rich experience through yeas of application and promotion, and ranks first in the industrialization of global new energy bus technologies, which all contribute to overseas attention and recognition.

 

Gradual transition to overseas localized production

China’s new energy buses have been sold and operated in both developing countries in South America, as well as such developed countries and regions as in Europe and the U.S. In 2014, King Long’s new energy buses took the lead in demonstrating operation in various European cities.

Also in 2014, Xiamen Golden Dragon and Dutch bus maker EBUSCO jointly developed an all-aluminum battery electric bus targeted at European markets and achieved high recognition from the Netherlands and Norway. This model also received orders from French company Transdev in March 2016. At the 2015 World Climate Conference in Paris, a Yutong battery electric bus was displayed and promoted as the only non-European brand model.

Another Chinese brand popular in the overseas markets is BYD, especially its K9 bus that has dominated the market in domestic first-tier cities and been under trial operation in such foreign cities as London, Paris, Bremen, Bonn, Madrid and Barcelona.

As the world largest new energy vehicle manufacturer, BYD has sold its battery electric buses in many developed countries including the U.S. (mostly in California), Canada, South Korea, Britain, the Netherlands and Australia. Up to now, over 10,000 BYD e-buses have been sold worldwide, with a total operation mileage of 200 million kilometers, and realized demonstration or commercial operation in more than 170 cities in 50 plus countries across six continents. With the constant export of products, Chinese bus makers have formed a longer strategy and development route in overseas market layout, which is a transformation from export trade to localized production in the new energy bus field.

Favorable factors in building independent factories overseas through localized production include avoiding the high tax rate for complete vehicle export, expanding overseas business by taking advantage of local policies and various resources, and easier access to aftersales service. Take Yutong as an example, by following the model of Cuba for the sake of longer term development through technology and capital export, Yutong made its debut there on October 31, 2016 thanks to its solid foundation in the Cuban market through development and experience accumulation.

BYD is also worth noting in terms of building overseas factories. Recently, BYD and Ecuador signed an MOU to build a local electric bus factory, the second to be built in South America and also the fifth overseas factory overall by BYD after the U.S., Brazil, Hungary and France.

Moreover, Higer is also a role model among its counterparts in terms of expanding its overseas presence for new energy buses. In April, Higer and Malaysia’s GA Co. signed a letter of intent to jointly assemble new energy buses in the Southeast Asian nation. In December 2016, a battery electric bus production base jointly created by Higer and the famous Kazakhstan research center PARASAT was launched in Almaty. Their new type of Higer electric bus will serve the 2017 Kazakhstan World Expo. Higer’s new energy buses have entered such developed countries as Serbia, Bulgaria, Italy, Austria and Israel. From complete vehicle export to KD cooperation, and to localized production through overseas factory investment and construction, Chinese new energy buses have been making constant efforts in going out and achieved tremendous leapfrog in overseas development and export volumes.

 

Bright prospects in the overseas market

It has become a world consensus to develop and promote the use of new energy vehicles under the dual pressure of energy shortage and environmental protection. Many countries have set strict regulations and standards to force the industrial upgrading of new energy vehicles, with Europe, the U.S. and Japan requiring fuel consumption reduction of 4.4, 4.5 and 3.9 percent per year respectively.

Compared with such developed countries and regions with weak government support in new energy bus development and no systematic experience, China enjoys absolute advantages in the R&D and promotion of new energy buses, which lays foundation for Chinese brands to foray into the overseas markets.

Be it developing or developed countries, there is huge market demand for new energy buses. For instance, the European markets have started to accept Chinese new energy bus brands represented by Yutong with rich operational experience and leading technology since its debut in Europe in 2015.

From a global perspective, new energy bus market has tremendous demand while Chinese new energy buses have gained extensive attention from overseas users through constant development in foreign markets. Therefore, there will be bright prospects for Chinese new energy buses in overseas markets from the perspective of both market demand and technology as well as acceptance of Chinese new energy buses.

(Rewritten by Xu Jun based on author’s article on chinabus.info)

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