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Growth tapers off: October heavy-duty truck sales up 32 percent to 92,000 units

October heavy-duty truck sales were up 32 percent from the previous year to 92,000 units, but shrank 9 percent from September, according to the latest data provided by manufacturers, showing signs of growth tapering off after a strong fourth quarter 2016.

October numbers reflect two key trends. First, monthly sales of heavy-duty trucks have broken records for five consecutive months, reaching 97,576, 90,213, 93,666, 100,000 and 92,000 units in June, July, August, September and October, respectively. Each of the five numbers surpassed historical highs reached in 2010. It was “Silver October” indeed. Second, the 32 percent growth on a yearly basis marked the lowest growth rate since the beginning of 2017, even lower than the 51 percent increase in May. It indicates that growth in Q4 may further taper off and could even see negative growth due to significantly strong sales in the prior year period.

In terms of monthly sales, leading heavy-duty truck manufacturers posted eye-catching performances on a yearly basis in spite of monthly drops. FAW Jiefang maintained way ahead of others by selling 22,000 units in October, an increase of 18 percent. It is also the only one with sales over 20,000 units in each of the past four months. Dongfeng remained as the runner-up with sales of 17,100 units, an increase of 31 percent. CNHTC came in at third with 14,800 units, up 47 percent. Shaanxi Auto and Foton remained in fourth and fifth spots with sales of 13,500, and 10,000 units, up 49 and 52 percent respectively.

JAC rose to the 6th spot by selling 4,000 units, dropping a slight 4 percent from a year earlier, replacing SAIC-IVECO-Hongyan, which still remained as the fastest growing with sales up 226 percent to 3,611 units.

In the first 10 months of 2017, a total of 966,600 heavy-duty trucks were sold, a significant rise of 71 percent from last year, with a net addition of 400,800 units. But the growth was off 6 percent compared with the cumulative growth over the first nine months.

FAW Jiefang maintained its No. 1 spot with sales of 223,300 units, up 85 percent with a leading market share of 23.1 percent. Dongfeng ranked 2nd with sales of 181,600 units, up 69 percent with a market share of 18.8 percent.

CNHTC took the third spot with sales of 162,800 units, rising 76 percent with a market share of 16.8 percent. Shaanxi Auto ranked 4th by selling 147,700 units, an expansion of 88 percent with market share rising to 15.3 percent. Foton took the 5th place with sales of 96,500 units, up 55 percent with a market share of 10 percent.

JAC posted sales of 45,000 units with an increase of 29 percent and a market share of 4.7 percent. SAIC-IVECO-Hongyan maintained its 7th spot and sold 34,277 units, surging 180 percent with market share rising to 3.5 percent. Dayun posted sales of 24,955 units, adding 47 percent with a market share of 2.6 percent. CAMC Hualing and Beiben posted sales of 15,221 and 12,025 units, up 34 and 55 percent, respectively, reaping market shares of 1.6 and 1.2 percent.

 

Policy to both fuel and suppress sales

Although the general trend of “Golden September and Silver October” is maintained and new record highs were reached, the monthly decline of nearly 10 percent in October and order monthly demand drop of 20 percent reflected a market weakness and high possibility of year-on-year declines in the last two months of 2017.

As for the reasons, policies including limitations on highway transportation of coal at ports, limited production and shutdowns for environmental protection are the main drivers. Based on the Action Plan of Comprehensive Control over Air Pollution in the Autumn and Winter of 2017-2018 in Beijing-Tianjin-Hebei and Surrounding Areas released by the Ministry of Environmental Protection, all types of earth and rock works and house removal shall be prohibited during the winter heating season. Peak production and transportation shifting for industrial enterprises will be further promoted, stricter supervision shall be made on air pollution control and peak production shifting for construction materials industry will be promoted.

Moreover, production during the heating season will be shut down for cement (including special cement and excluding cement grinding station), kilns (excluding natural gas as the fuel), ceramics (excluding natural gas as the fuel), glass wool (excluding natural gas as the fuel), rock wool (excluding electric furnace) and plaster board. Production at the cement grinding station shall be shut down during early warning period for heavy air pollution.

The scope of implementation includes cities that transmit air pollution in the Beijing-Tianjin-Hebei region, namely, Beijing, Tianjin, Shijiazhuang, Tangshan, Langfang, Baoding, Cangzhou, Hengshui, Xingtai, Handan, Taiyuan, Yangquan, Changzhi, Jincheng, Jinan, Zibo, Jining, Dezhou, Liaocheng, Binzhou, Heze, Zhengzhou, Kaifeng, Anyang, Hebi, Xinxiang, Jiaozuo and Puyang (referred to as “2+26” cities, including Xiong’an New Area, Xinji, Dingzhou, Gongyi, Lankao, Hua County, Changyuan County and Zhengzhou Airport Economy Zone).

Due to these stricter production limitations for environmental protection reasons and plant shut downs, demand for heavy-duty trucks in North China and Central China, two regions where there is the greatest demand, was greatly affected. Given that the last two months sales of 2016 stood at a high level (driven by the GB1589 implementation), sales in the last two months of 2017 are likely to be flat over those of 2016.

However, there is no doubt that sales of heavy-duty trucks will break 1.1 million units in 2017, higher than the 2010 peak of 1.017 million units and creating a new record.

(Rewritten by Xu Jun based on author’s article on cvworld.cn) 

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