Heavy truck sales in the first quarter "waist cut" Market opportunities still exist

The decline rate of heavy truck sales in the first quarter was formed by a combination of many reasons, driven by both internal factors in the industry and external environmental factors. However, under the impetus of a number of positive news, from the second quarter, the commercial vehicle market will usher in a better market environment and opportunities, and the overall trend of the heavy-duty truck market may slow down.

According to data from the China Association of Automobile Manufacturers, in March 2022, mainland heavy-duty truck sales were 77,000 units, down 66.6% year-on-year; in the first quarter, heavy-duty trucks sold 231,000 units, down 56.6% year-on-year.

Dealer perspective: External factors have short-term effects

The decline rate of heavy truck sales in the first quarter was formed by a combination of many reasons, driven by both internal factors in the industry and external environmental factors.

Analyzing the internal reasons of the industry, first of all, the heavy-duty truck industry has grown rapidly for many years, so that the industry is at a high level of operation and the historical base is at a high level; at the same time, the perennial high level operation is largely overdrafted in advance of market demand. Secondly, the Implementation of the National VI Emission Standards in July 2021 objectively increased the procurement and operating costs of vehicles, and car companies and car owners rushed to sell and purchase National V vehicles that were still licensed in the first half of 2021, once again further "overdrawing" the market demand that had been squeezed for many years. It can be said that the high level of continuous operation has laid the groundwork for today's market decline, and the implementation of The National VI emission standard is only the time node of the market trend.

The impact of external environmental factors is obvious, on the one hand, the national economic development is mainly to the domestic cycle, the direction of domestic and international dual circulation transformation, transportation market demand to a certain extent will inevitably have a short-term adaptation process. At the same time, in the first quarter of 2022, there were local outbreaks of the new crown pneumonia epidemic in many places in China, and the epidemic prevention and control affected the demand growth rate of the transportation and infrastructure markets to a certain extent.

Objectively speaking, the influence of internal factors in the industry will continue to affect the sales performance of heavy trucks for a long time, from 2010 after breaking through one million units, until 2017 to return to the million scale again, the cyclicality of the market always exists, but the length of the cycle is not absolute indicators. The external environmental impact is temporary and phased.

China Commercial Vehicle Network reporter interviewed heavy truck dealers in Henan, Anhui, Fujian and other places through the form of connections, and dealers in many places frankly said that under the influence of multiple factors, sales work is really difficult to do. However, for the future development, dealers are generally full of confidence. A dealer in Anhui said that aside the short-term impact of the epidemic, the market demand is indeed not high, but driven by factors such as vehicle renewal, there are still development opportunities. Dealers in Henan believe that after the construction of a number of infrastructure construction starts, there are still market opportunities in the heavy-duty truck market.

Enterprise level: Boost confidence with product launch

Specific to the performance of the enterprise market in the first quarter, Sinotruk sold 55,000 vehicles in the first quarter, down 38% year-on-year, ranking first in the industry. Since the fourth quarter of 2020, Sinotruk has continued to exert efforts in product launch and market promotion, with single-month sales continuing to rise, and gradually increasing its market share, and finally achieving sales peak in the first quarter of this year.

FAW Jiefang 54,700 vehicles, down 67% year-on-year, ranking second in the industry. In the first quarter of this year, many places in Jilin Province, including Changchun, were affected by the local epidemic and entered static management. The production order of FAW Liberation has been affected to a certain extent, but with the effective control of the epidemic, the resumption of work and production continues to advance, and the production order is restored, FAW Liberation will also overcome the impact and stabilize its market position. From the data level, the gap between its sales and the top of the list is only 3,000 vehicles, which is basically in the same running line.

In third place was Dongfeng Motor, which sold 44,800 heavy-duty trucks in the first quarter, down 54% year-on-year. The sales volume of the top three enterprises in the first quarter is in the range of about 50,000 vehicles, and the leading edge with the follow-up enterprises is large, which together form the first group in the industry.

Shaanxi Automobile Group sold 26,000 vehicles in the first quarter, down 62% year-on-year. Foton Motor followed in fifth place, with sales of 21,900 units in the first quarter, down 49% year-on-year. The two companies are currently close in terms of sales scale, and together they form the second group in the industry. Foton Automobile's heavy-duty truck products in the first quarter continued to be new, and on February 28, Foton Daimler held a national listing conference for Auman Galaxy in Wenchang, Hainan, and Auman Galaxy has been rapidly introduced into the market and formed a good user reputation, laying a good foundation for Foton Motor's competition in the heavy-duty truck market.

SAIC Hongyan sold 7,578 heavy-duty trucks in the first quarter, down 66% year-on-year, ranking sixth in the industry. SAIC Hongyan unveiled the new Power Alliance model of the year on March 29. Eleven customized annual models covering tractors, dump trucks, trucks, mixers and other categories were unveiled. SAIC Hongyan intends to give full play to the advantages of resource integration of SAIC Group and Shanghai New Power Automobile Technology Co., Ltd. Strengthen collaboration with upstream and downstream enterprises in the industrial chain, and improve product competitiveness by optimizing the industrial supporting system, improving product added value, and enhancing product competitiveness. Next, it depends on whether SAIC Hongyan can use more intensive marketing and promotion publicity to achieve sales, market share and market position under the blessing of new products.

Dayun Automobile sold 6191 vehicles in the first quarter, down 21% year-on-year, ranking seventh in the industry. It and SAIC Hongyan are close in terms of cumulative sales in the first quarter, and together form the third group in the industry.

Jianghuai Automobile sold 4967 vehicles in the first quarter, down 68% year-on-year; XCMG Automobile sold 3358 vehicles in the first quarter, down 51% year-on-year; Hubei Third Ring Road sold 1681 vehicles in the first quarter, down 35% year-on-year. These three companies are already in the back of the top ten. The cumulative sales of Beiben Heavy Truck and Hanma Technology, a subsidiary of Geely Commercial Vehicles, have fallen out of the top ten in the industry in the first quarter.

On April 10, 2022, the Opinions of the CPC Central Committee and the State Council on Accelerating the Construction of a Unified National Large Market were released. This means that the logistics cost is reduced, which can make the Chinese economy that carries the burden forward lighter and more dynamic. The construction of a unified national market will also stimulate consumption and better play the driving role of consumption in economic development. In addition to the above positive effects, the construction of a unified national market can also effectively break down the barriers formed by local protectionism, which is conducive to the sales and launch of products in the automotive industry.

At the same time, the State Council, the Ministry of Transport, the Ministry of Public Security and other departments have continuously issued a number of policies and measures, requiring "ensuring a stable supply chain" and "opening up major arteries and smooth microcirculation". Relieve the worries and relief of the logistics and transportation market. In addition, the infrastructure sector, which has the most good news for the commercial vehicle industry, has also frequently spread good news. Overall, the complete stop loss will not appear in the short term, which is after all the cyclical effect after the long-term "overdraft". However, under the impetus of a number of positive news, from the second quarter, the commercial vehicle market will usher in a better market environment and opportunities, and the overall trend of the heavy-duty truck market may slow down. (China Commercial Vehicle Network reporter Ma Hanming)