Happy New Year!
And Happy New Year of the Rooster!
The Year of the Monkey turned out to be a banner year for China’s heavy-duty truck market, as sales “gushed” to over 730,000 units for a 33 percent growth, which is the fastest since the record year of 2010 when sales topped one million units. Were it not for some truck makers “hiding” away December sales (e.g. FAW Jiefang), the numbers would have been even higher.
The market in 2016 was primarily policy driven, as evidenced in the second half of the year and more so in the fourth quarter, after the GB1589-2016 standards on weights, dimensions and loads for on-highway vehicles went into effect in September and the country began clamping down on overloading and oversizing.
Virtually all major players in the sector saw double-digit growths if not triple-digit growths. Even niche players like Scania, who only sells high-end imported trucks positioned at the very top of the product pyramid, had a breakout year. Scania in fact saw truck sales double to more than 1,000 units, buoyed by the express delivery segment which experienced growths of 40-50 percent, according to Steve Wager, general manager of Scania Sales (China) Co., Ltd.
What is going to happen in the New Year?
For better or worse, policy will continue to drive the heavy-duty truck market in 2017, as the China V emissions standards go into effect nationally on July 1. Wager in his interview predicted that this will cause a distortion of the market – a pre-buy effect which will mean more sales in the first half of the year than the second half.
That also seems to be the consensus for many heavy-duty truck makers who have held their annual business conferences. (A detailed recap will be featured in the next issue.)
Senior executives from FAW Jiefang, CNHTC, Shaanxi Auto, SAIC-IVECO-Hongyan and Beiben all predict that the industry will sell about 750,000-800,000 heavy-duty trucks this year, with a growth of less than 10 percent. But for many of these companies who have disclosed their 2017 sales targets, the corresponding growth rates are all lower than their growth rates for 2016.
The New Year will see many new product launches from these companies catered to different segments of the market due to the GB1589-2016 as well as new emissions standards requirements.
It will be interesting to see some of the races brewing in the sales rankings. Can Dongfeng grab back its pole position or will FAW Jiefang continue to solidify its newly crowned No. 1? Will Foton or Shaanxi Auto challenge the No. 3 spot? Who among the rest of the camp will climb up the rankings the most?
CBU/CAR will be closely following the action!