The road transport exhibition held each year can reflect some market changes. Some of the enterprises are leading indicators for future popular models, while others slow in action display some previously hot models instead of predicting future hot ones.
An evident feature of the 2017 China Beijing International Exhibition on Buses, Trucks and Components lies in the dominating role of new energy buses. Those bus makers that are engaged only in new energy buses and traditional bus makers displayed only new energy buses.
However, in the author’s view, those who show no other models but their new energy buses may lose their advantage in traditional buses rather than catch up with their rivals. The reason is that traditional buses may see their sales rise to even exceed new energy buses over the next year or two.
First, traditional fuel-driven buses are in urgent demand in the Xiong’an New Area. Bus makers should first realize that traditional fuel buses will have new opportunities for this specially designated region. Actually, it signaled a message of boosting the demand for these vehicles in 2016 when Beijing set up its sub-center in Tongzhou District. Moreover, with the accelerated pace of Beijing-Tianjin-Hebei integration, the relocation of some plants, enterprises and markets in Beijing will lead to the growing demand for buses to transport employees to and from work as well as inter-city buses. Obviously, most of the current battery electric buses with their range capabilities cannot meet the demand required by round trip of 200-300 km.
If so, even the most excellent traditional fuel-driven bus would miss the opportunity if it invested all of its resources in new energy buses.
Second, the 2022 Winter Olympic Games could boost the demand for fuel-driven buses. The Games will be held in Beijing and Zhangjiakou, two cities that are 228 km apart, requiring a large number of buses for fleet use to commute between the two cities. Given a certain safety factor and the existing limited range of most battery electric buses, traditional fuel-driven buses are likely to be used as the meeting vehicles travelling between the two cities. It might not be forgotten that the 2008 Olympic Games in Beijing and the 2010 World Expo in Shanghai have pulled up the bus industry. Nowadays, Beijing-Tianjin-Hebei integration, the Xiong’an New Area and Beijing’s sub-center may also inject new vitality into the weak bus market. Most of the future growth points are likely to depend on traditional fuel-driven buses.
It can be seen from data of the bus market in the first four months that traditional fuel-driven buses will be the future hope and has also reaped the best performance among many segmented markets. It is mainly due to the 40 to 50 percent reduction in subsidies in new energy buses that came into effect this year. Besides, the over 50 percent reduction rate in some cities, increase in technological barrier and such requirements as operating mileage of 30,000 km all make it very difficult for large adoption of new energy buses. Both enterprises in production and purchasing have shown less favor for new energy buses.
On the other hand, the relocation of some enterprises from city centers to satellite cities has also pulled up the demand for group buses that are mainly powered by traditional fuel. To this extent, bus makers should divert more resources into traditional fuel buses especially the group sightseeing buses even future demand is excluded of the consideration.
As seen from past sales data, bus makers produced about 1,100 battery electric buses in the first four months of 2017, falling 93 percent, or nearly 15,000 units from the same period of 2016. In addition, public transport buses were no longer the biggest segment in terms of volume. In the first four months of 2017, altogether 32,857 buses longer than 5 meters were sold, while only 10,727 public transport buses were sold, which is down 118.41 percent from the same previous period.
A significant drop in sales of the hot new energy buses and public transport (city) buses that used to grow significantly in recent years has been reflected by bus sales data over the first four months of this year. Traditional fuel-driven buses will likely be the best performer in segmented markets propelled by such positive factors as the accelerated pace of Beijing-Tianjin-Hebei integration, establishment of Xiong’an New Area and the 2022 Winter Olympic Games.
However, many bus makers did not show any traditional fuel-driven buses at all at the exhibition in Beijing. Even traditional fuel-driven bus giants such as Xiamen King Long, Sunlong, Huanghai, Shanghai Sunwin, Shaolin, Youngman and Yantai Shuchi chose to “ditch” their traditional fuel-powered buses.
Moreover, North Bus, which recently had a shareholder shuffle, did show traditional fuel-driven buses with a clear target to meet the new group bus demand brought by the Beijing-Tianjin-Hebei integration.
In contrast, the traditional bus makers who did display fuel-driven vehicles were the exact exemplary performers in the new energy bus sector: Yutong, Zhongtong, Suzhou King Long, Futon AUV and Ankai, propelled by the benefits of their new energy buses. It is evident that these companies with their high-end traditional fuel-driven buses of large size all are targeting the Xiong’an New Area, the sub-center of Beijing, Beijing-Tianjin-Hebei integration and the 2022 Winter Olympic Games.
As for the pities, first, some traditional bus makers that had advantages in group and sightseeing buses displayed nothing but new energy buses in which they had no advantages. Is it due to their over confidence in their traditional fuel-driven vehicles or were they just too pessimistic about the prospects of traditional fuel-driven buses?
Second, some enterprises brought inappropriate vehicles, ignoring the models in which they had advantages and the segmented markets with the best growth potential.
What’s worse, these enterprises failed to learn from such exemplary makers as Yutong and Zhongtong. Instead, they released what they believed were the new products and hot models.
It might be meaningless to participate in the exhibition if the enterprises fail to research the future market demand and the most urgent customer needs.
(Rewritten by Xu Jun based on author’s article on find800.cn)