www.chinatrucks.com: 1. Analysis on the production and sales in the first three quarters

Statistics of China Association of Automobile Manufacturers show that from January to September 2013, production and sales of Chinese automobiles are 15938351units and 15883084 units, seeing a double-digit growth year on year, 12.78% and 12.70% respectively. The sales volume of trucks (including non-complete vehicles and semi tractors) totals 2633069 units, up by 7.33% over the same period of last year.

Looking deeper into the truck market in the first three quarters, accumulative sales volumes all see positive growth. The accumulative growth of MD and HD trucks outnumbers 10%, while that of LD and micro trucks is less than 10% (details are available in table 1).

In the first nine months, light trucks remain to take up half of the market, reaching 54.75%, decreasing 0.77% year on year; HD trucks account for 21.54%, rising by 1.49%; micro trucks account for 15.28%, dropping by 0.95%.

The sales volume in Q3 exceeds that of last year. Sales volume of HD trucks totals 164530 units, up by 36.73% year on year; that of LD trucks totals 437731 units, up by 7.75% year on year; while MD trucks 62466 units, up by 1.96% year on year.

Table 1 Sales of Chinese HD, MD and LD trucks from January to September 2013 (Units, %)

The peak time of updating light truck fleets comes in 2013. Besides, thanks to policies released by governmental departments to support micro and small enterprises, the opening of private investment and control on loan interest, Chinese light trucks hit historical high in the last four years for three consecutive months, namely in July, August and September (see Figure 1).

In Q3, the sales total 438,074 units, while the sales in 2010, 2011 and 2012 are respectively 427,516 units, 416,214 units and 407,346 units respectively (see Figure 2). Q3 contributes to 30.39% of total sales volume in the first nine months of 2013. The figure is respectively 29.21%, 28.85% and 29.91% in 2010, 2011 and 2012. The figure breaks through 30% for the first time.

2. Competition analysis on Chinese light truck market

1) Competition analysis on light truck market in the first three quarters

In the first nine months, CAAM report shows 34 enterprises produce light trucks, leveling off with last year. The top five enterprises (Foton, JAC, Dongfeng, Jinbei and JMC) each sell more than 100,000 units (see Table 2), forming the first light truck camp. The five enterprises take up a share of 58.04% by selling 836,802 units all together, up by 4.98% year on year. Foton, accumulating 280,000 units with a negative year-on-year growth rate of -1.39%, accounts for more than 20% market share and remains to take the lead in this market. JAC accumulates 170,000 units, up by 8.26% year on year and with a market share of 12.05%. Jinbei accumulates 130,000 units, up by more than 20% year on year. JMC is roughly same with JAC in terms of growth rate, slightly above 8%.

There are 14 enterprises with sales among 10,000 units to 100,000 units. The 14 enterprises accumulate to sell 568,427 units, up by 8.72% year on year and with a total market share of 39.43%, up by 1.04 per cent compared with the same period of last year. The rest 15 enterprises accumulate 36,506 units with a market share of 2.53% (see Table 3).

Table 2 Sales of Chinese light truck manufacturers in first three quarters 2013 (Units, %)

In terms of accumulative sales from Jan. to Sep., Changan (177.73%) and Sinotruk (106.29%) achieves a growth rate over 100%; Chongqing Changan achieves a growth rate of 84.09%; Chongqing Lifan 42.29%; Jinbei 22.44%; NAC 19.65%; Tangjun Ouling 18.29%, FAW 17.66% and Dandong Huanghai 13.78%; 3 enterprises achieves a growth rate less than 10%, namely Hebei Zhongxing (8.98%), JMC (8.28%) and JAC (8.26%); Qingling witnesses a growth rate less than 1 per cent. By contrast, there are four enterprises encountering a one-digit negative growth rate: Foton (-1.39%), Dongfeng (-1.41%), Great Wall Motor (-2.38%), and Zhejiang Feidie (-4.55%). Three enterprises suffer a negative growth rate over 10% and even 30%: Shandong KAMA (-12.65%), BAC (-29.78%), Sichuan Hyundai (-31.57%).

In the first three quarters, the market presents the following changes: compared with the same period of last year, 11 enterprises remain to hold the same positions, for example, Foton, JAC, Dongfeng, Jinbei, JMC, Great Wall, Changcheng and NAC remain No.1 to No.7, Qingling and Zhongxing maintain No. 9 and No. 10, and Lifang and Feidie remain hold No. 13 and No.15; five enterprises get raised in ranking like FAW (rising to No.8 from No.11), Tangjun Ouling (from No.l2 to No.11), Chongqng Changan (from No. 17 to No.14), Dandong Huanghai (from No.18 to No.16), and Baoding Changan (from No.23 to No.19); four enterprises suffer drop: Shandong KAMA (from No.8 to No.12), BAC (from No. 14 to No.17) and Sichuan Hyundai (from No.16 to No.18).

2) Analysis on operation of light truck manufacturers in Q3 2013

There are 13 enterprises with sales in Q3 surpass that in the same period of last year. Baoding Changan and Chongqing Changan soar by 145.62% and 92.57% respectively; Dandong Huanghai and Jinbei increase by 37.84% and 34.86% respectively; JAC (18.38%), Tangjun Ouling (17.78%), FAW (15.91%), Qingling (12.65%); five enterprises achieves an one-digit growth rate: JMC (8.34%), Dongfeng (4.68%), NAC (4.53%), Zhongxing (4.49%) and Foton (4.02%). Great Wall increases less than 1 per cent. There are also five enterprises suffering negative growth: Chongqing Lifan (-2.90%), Zhejiang Feidie (-4.78%), Shandong KAMA (-15.18%), Sichuan Hyundai (-23.51%) and BAC (-32.27%).

Second, there are 19 enterprises with sales in Q3 accounting for more than 23% of total sales in first three quarters, among which BAC has 40% of sales completed in the third quarter. The proportion of Q3 in total sales of first three quarters: Jinbei (38.24%), Chongqing Lifan (33.39%), Dandong Huanghai (32.99%), JMC (32.93%), Changcheng (30.95%), Zhejiang Feidie (30.69%), Shandong KAMA (29.79%), Chongqing Changan (29.76%), Tangjun Ouling (29.42%), Foton (29.31%), and FAW (29.22%).

3) Sales analysis on light truck model

Regarding the sales of detailed model, according to statistics of CAAM, 17 enterprises with 38 models accumulate 1112393 units (including exported ones) from January to September 2013, up by 4.12% year on year (see Table 3).

High-level light trucks grow fastest: JMC Shuailing (15.89%), JMC Kaiyue (17.01%), JMC Kaiwei (17.68%), Cabstar (56.06%), JAC Shuailing (4.98%), Foton Ollin (10.79%), Foton Aumark (32.42%), Sinotruk HOWO (23.00%). Aumark and Cabstar even enjoy a growth rate over 30%.

Other models also grow fast: Yujin Zuanka (23.55%), Yuejin Chaolika (319.86%), Changan Kuayue (84.09%), and Changan Shenqi (177.73%), all growing by over 20% with sales volume surpassing 10,000 units.

Table 3 Sales of Chinese light truck model from Jan. to Sep. 2013

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3. Analysis on the characteristics of the market

Entering 2013, the light truck market presents the following seven characteristics:

1) Demands grow at a low speed. Q3 is traditionally an off-season for trucks. The situation is rather different from previous years. The sales volume in Q3 surpasses that in previous three years.

2) Strong players become more competitive.

3) New products especially high-level light trucks are introduced to the market one after another in Q3. Since the beginning of 2013, JAC, NAVECO, Foton, FAW, BYD, Feichi, Sichuan Hyundai and others launch 18 new light truck products, 11 of which are in Q3, namely: NAVECO Chaoyue C100, FAW GE F330, Foton Ao CNG China V-compliant light truck, Hyundai Mighty, JAC chassis for electric light truck, BYD T5 electric light truck, Feichi refrigerated truck with aluminum frame, FAW Jiefang Qingdao Hu V, Foton Forland 1.5t Sairui, 2t Xiangrui and 2.5t Xiangrui. The launch of new products is very fast.

There are four distinguished features of the newly launched light trucks:

First of all, most new products are high-level light trucks. Among the 11 new products, six are pure high-level light trucks (four in the same period of last year), such as JAC’s New Shuailing, Jianghuailing, NAVECO C100, Foton Ollin CNG China V-compliant light truck, FAW GE F330, Hyundai Mighty, etc.

Secondly, new models cover a series of products. For instance, JAC New Shuailing cover wide, medium, narrow ones and medium trucks; NAVECO C100 covers 3.5t, 4t, and 5t; FAW GE F330 contains standard and luxurious editions, covering 1.5t, 2t and 3t; Foton Forland 1.5t Sairui has three types of wheelbase, 2600mm, 2850mm and 3050mm.

Thirdly, there are more new-energy and clear-energy light trucks, such as JAC electric truck chassis, Foton Forland Kangrui KQ1 bi-fuel light truck, Foton Ollin CNG China V-compliant light truck, and BYD T5 electric light truck.

Last but not least, the promotion scale is not as wide as usual. JAC New Shuailing only rolls out in Shenzhen, Beijing and Chengdu, Jianghuailing in Wuhan and Lanzhou. The rest new products also roll out in one city. The situation is quite different last year. One new product rollout out in many places.

It should be noticed that there is a trend that more passenger vehicle enterprises start to step into the light truck industry. To give an example, BYD, whose main business is passenger car, now is researching T3, T5 and T7 electric cargo trucks and plans to upgrade port and airport trucks into zero-emission vehicles.

In addition, to respond to the business opportunities brought by upgrade in environment protection, many Chinese light truck manufacturers are expected to speed up the launching of new products in the fourth quarter of 2013, to name a few, Sinotruk’s light trucks with DCEC 2.8L and 3.8L engines; FAW GE’s S230 and F230 high-level light trucks; JMC narrow Kairui 800 with many editions of wheelbase; Jinbei’s new light truck based on Isuzu 700P with 1730mm and 1880mm wide, medium and standard bodies; SAIC SV62; Ollin LNG China V-compliant products, so on and so forth.

4) Declaration and notice of new-energy, clean-energy and bi-fuel light trucks increase

Since the beginning of 2013, with the increasing monitor on environment of local and national governments, mainstream enterprises accelerate to public notices and declaration of new-energy, clean-energy and bi-fuel light trucks.

According to statistics, MIIT has released 34 notices regarding electric light trucks since the beginning of the year and 27 are involving 2t trucks. 17 notices are regarding NAC (electric cargo trucks and chassis), with gross mass 2t. The rest 17 notices are about electric van, tank truck, sweeping truck, fence truck, garbage truck, vender truck and mobile loudspeaker trucks. In terms of bi-fuel notices, there are 16 by the No.252 notice. Foton has 13 declarations approved in the No.251 notice and Hebei Changan has 3 declarations approved in the No.250 notice.

5) Sales volume of large tonnage light trucks lags behind that of the same period of last year

According to statistics of CAAM, from January to August, 2013, 135,821 light trucks with 4.5t<gross mass ≤ 6t are sold, decreasing by 4.44% year on year; 685,178 units of light trucks with 1.8t＜gross mass≤3.5t are sold up by 6.59% year on year; and 392,894 units of light trucks with 3.5t＜gross mass≤4.5t are sold, up by 11.76% year on year.

6) Various events organized by companies are less and less

As the market maintains a low demand since the beginning of 2013, various events organized by truck companies are shrinking. For example, the promotion scale of new products is smaller and sales and promotion activities are only a few, such as “2013JMC Low-Carbon China Tour”, Foton’s 2013 Fifth Ollin Light Truck Duration Competition and FAW GE Jiefang 498 Fuel Saving Challenge.

7) Export slows down

Affected by the frustrated overseas demands, Chinese vehicles suffer a declined export. According to statistics of CAAM, from January to September, the exported commercial vehicle amounts to 282,700 units declining by 5.4% year on year.

In the first nine months, five light truck brands (excluding Foton) accumulate to export 47680 units, decreasing by 20.49% over the same period of last year (6 brands accumulate 59967 units). Jinbe and Yuejin maintain the fastest growth, JAC maintain more than 10% growth, and Jiefang and JMC suffer double-digit decrease (See Table 4).

Table 4 Exports of Chinese light trucks from January to September 2013 (Units, %)

 
4. Analysis on the trend of light truck industry

It is learnt that Chinese domestic light truck market presents three trends:

First of all, light trucks are tended to be more high-level due to rapid development of e-commerce develops, integration of logistic companies, frequent launching of new high-level products and upgrade of emission standard.

Secondly, bodies and cabs are constantly upgraded. In 2012, Chengdu Wangpai put headights vertically, which arising a trend of upgrading vehicles bodies. Now Foton, Nanjun, KAMA and Wuzheng all have similar products. Wide light trucks start to replace single-axle four-cylider medium trucks thanks to larger load and improvement of engines and powertrain.

Thirdly, the electric turbo-charging is more and more used in drivelines. China Ⅳ-compliant engines compatible with Euro Ⅴ and Ⅵ are more and more competitive owing to strong braking, light weight and small size. Cummins, Sofim and Navistar all have turbo-charging common-rail engines with five core leading technologies, namely fuel optimization, fuel burning optimization, automatic electric control, emission disposal and filtering system.

5. Outlook in the fourth quarter

Looking into the fourth quarter, the sales of light truck market are expected to be 508,000 units and grow by 5.7% year on year. The annual sales volume of the whole year is estimated to reach 1.95 million units and increase by 5.8% over last year.

There are mainly four factors affecting the sales in the fourth quarter.

1) Domestic economy is under slow recovery.

2) A main factor driving the light truck market is environmental protection improvement. Cities are accelerating upgrading environmental protection and the state council announced to implement Air Pollution Prevention Action Plan. More and more cities begin to eliminate vehicles with “yellow mark” (such vehicles fail to meet emission standard) or enlarge the areas limiting vehicles with “yellow mark”.

3) Short haul which could lead to the decrease of light truck purchase declines due to various factors, such as reduction of vegetables, grains, aquatic and seafood products, slow economic development, shortage of cash, the state’s crash on consumption with government expenses, so on and so forth.

4) The demands for new products are also curbed by rising costs of transportation because logistic companies’ taxes are switched from business tax to VAT and oil quality is upgraded.

Appendix

List of new light trucks in 2013

Source : www.chinatrucks.com

Editor : Evelyn

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