CHANGCHUN, Jilin – China’s medium and heavy-duty truck demand will average at about 800,000 units a year in the future, according to Hu Hanjie, Party secretary and president of FAW Jiefang, the country’s leading heavy-duty truck maker.
Hu made the comments in a media interview following a ceremony to celebrate the production of the 700,000th of FAW Jiefang’s J6 heavy-duty truck on July 15.
“In the next few years, China’s economy will enter into a period of growth shift. As a result, potential growth for medium and heavy-duty trucks will slow,” said Hu.
Hu indicated that the recent growth spurt of the heavy-duty truck market dating back to September 2016 was not only the result of the new GB1589-2016 regulations on sizes, weights and loading limits for trucks, but also a result of several other factors.
“China’s medium and heavy-duty truck market has recovered significantly over the last year driven by the transition of the economy, upgrade of industrial structure and innovation, while regulations on overloading and oversizing have stimulated new purchases and trade-ins, leading to a huge rise in demand,” said Hu.
Hu believes that as the changing industrial structure will reduce both the size and flexibility of cargo transportation and truck demand will slow in the next few years.
Hu predicted that China’s truck market will see transformation on several fronts in the next few years besides stabling demand.
First, trucks will become higher end, specialized, lighter and powered by larger horsepower engines.
Second, demand for dump trucks and engineering trucks will fall while that for tractors and special-purpose trucks will grow as the country’s economic growth depends less on investment and more on consumption in the future.
Third, the stabling of the economy and improvement in logistics efficiency will lead to lower domestic demand but exports will rise thanks to the infrastructure construction needs in developing countries and the One Belt One Road initiative.
Fourth, in terms of logistics development, the rise of the “truck brokers” (individuals or companies that engage in cargo transport business but do not own trucks) are likely to optimize logistics resources allocation, the increase in railway transport capabilities will lead to multi-modal transport, while technologies and policies will drive the logistics industry to become more professional and smart, thereby increasing efficiency.
Fifth, in terms of technology development, safe, energy efficient, environmentally friendly and intelligent will be the key future development themes for trucks. By 2025, telematics systems must be equipped on 80 percent of the vehicles sold in China.
“In the next few years, trucks that have relatively high quality and are more efficient will become mainstream products in the industry,” said Hu.