Turning point for China heavy duty truck industry
Since Jul.1st, 2008, China National III emission standard for commercial vehicle was implemented. Truck makers are faced with two major problems that how to deal with the large quantity of stocked National II trucks and how to break through the technical bottleneck of National III. During the transition period, heavy duty truck sales was “overdrawn” and “pre-released” and the “blowout” in heavy duty truck sales is abnormal, however, with implementation of National III emission standard, sales will be cooled down in the following half year.
With implementation of National III emission standard, a full scale improvement in heavy duty truck engine technique is inevitable which certainly will lead to a cost hike for each truck engine. Therefore, it is a historic turning point for the industry on which truck makers are faced with problems of tremendous cost hike pressure, industrial reconstruction and products upgrade.
In the first five months of this year, China heavy duty truck market was boomed both in sales and production. Sales volume was around 318,000 units increased by 50% y-o-y. Seen from sales rank of heavy duty truck (including semi trailer tractor, non complete vehicle) in first five months, top three truck makers are FAW, Dongfeng and Sinotruk whose respective y-o-y increase rate are 57.65%, 82.90% and 40.63%. However, since July sales plunged dramatically. It is learned that compared with May orders in Jul. decreased 40% to 50%.
However, reconstruction of China Sichuan area which was hit by a major earthquake in May 12 needs huge number of commercial vehicles. At the same time, since beginning of May, supply crisis for coal, electricity and oil all over the country put great pressure on the transportation industry. Considering from these two points, there should be bid demands for heavy duty trucks in China. What’s more major China truck makers have a vast oversea market. Take Sinotruk for example. At present, Sinotruk already has five major oversea markets and they are CIS countries, Middle East, Africa, South-east Asia and Latin America and business ranges for its export departments have been divided clearly. Though RMB is stronger and stronger, compared with Western trucks, quality-to-cost ratio for China trucks are quite high, so it is predicted that China heavy duty truck market will have a bright future.
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