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Heavy-duty truck sales unlikely to hit 1 million units again

“China’s heavy-duty truck sales help to drive overall auto sales.”

It is a statement that not many people in the industry would have expected to hear from the officials of China Association of Automobile Manufacturers (CAAM).

But that is exactly what happened on March 10 at CAAM’s monthly press conference announcing industry sales for the month of February.

Heavy-duty truck was the fastest growing segment in the month, with sales up 150 percent to more than 86,000 units in a truck market that was up 57.4 percent and an overall market up 22.37 percent.

Granted that growth across different vehicle segments, with the exception of buses, microvans and MPVs, were unseasonably high due to lower sales in February 2016 (Chinese New Year 2016 fell in that month), the “gushing” of heavy-duty truck sales still struck many people in the industry by surprise.

With nearly 170,000 units sold in the first two months of the year, the segment is on pace to hit 1 million units again, just like the last time it did so in 2010.

Or will it?

Our guest columnist Yao Wei from find800.cn took a look at the forces behind the rapid rise of heavy-duty truck sales and concluded that there wasn’t compelling evidence that sales will get to 1 million units again, despite favorable policy and economical environments. The current wave of growth is simply a result of demand created by the new GB1589 standards and policies aimed at cracking down oversizing and overloading since September of last year, as well as a pre-buy effect caused by the upcoming national rollout of the China 5 emissions standards on July 1. We also have to consider product cycles as many owners of vehicles purchased 6-7 years ago now are in time to make upgrade their vehicles into new ones.

Obviously because of these reasons we will see a much higher volume in the first half of the year than in the second half, as Yao pointed out and Steve Wager, general manager of Scania Sales (China), commented in an interview with CBU/CAR last December.

It would not be surprising to see a volume approaching half a million units in the first half and a much lower volume over the second half of the year.

The consensus of many senior executives about this year’s heavy-duty truck sales, as predicted at their companies’ annual business conferences held late last year and early this year, the market will likely end up selling around 800,000 units, slightly up from last year’s levels.

That, interestingly, is also the long-term average annual sales predicted by our good friend Roman Mathyssek, former head of global truck research and HIS, back in December 2011.

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