CHINA REPORT
The heavy truck industry fell in the first half of 2022 by more than 63% from the previous year. According to the latest statistics from the China Automobile Association, for January to June this year, the overall sales volume of the domestic heavy truck market was about 380,000 units, a decrease of 63.6% compared with the same period last year.
In June, the sales volume of China’s heavy truck industry was only 55,000 units, a year-over-year decrease of 65%. The main reasons for the decline in heavy truck sales this year are the upgrading of emission standard from “China V” to “China VI” last year, which caused a pre-buy in the market, and the impact of the epidemic this year, which depressed the logistics and transportation market, further curbing demand for new trucks.
The heavy truck industry is a cyclical industry, and its development cycle fluctuates due to changes in environmental protection policies and the overall economy. Following a 14 month decline in sales, the primary concern in the heavy truck industry is this: When will there be a turnaround?
In the first half of 2022, the automobile supply chains affected by the pandemic have been largely restored. At the same time, the imposition of the national purchase tax policy and the introduction of the heavy truck subsidy policies in many places, have created the foundation for the recovery of the heavy truck industry. This recovery is expected to accelerate in H2 2022.
Source: Securities Daily Read The Article
PSR Analysis. Affected by the pandemic and the international environment, China’s economy is suffering an obvious downward trend; many types of investment and consumption have shrunk, enterprise efficiency has generally declined, social supply has significantly decreased, and the demand for heavy trucks in various industries has decreased.
The contradiction of “more vehicles, less goods and low freight rates” is more prominent, and the end users are unable to buy new vehicles. Many dealers are still overstocked with many China V trucks. Dealers sell at low prices through the second-hand truck market, impacting the new truck market of China VI heavy duty trucks which carry higher prices.
In the next few years, with the launch of China VII emission standards and the continuous impact of new energy heavy trucks, the traditional diesel heavy truck market will face further contraction. At the same time, with the decline of China’s economic growth, investment and infrastructure will also decline. It is expected that China’s heavy trucks will maintain a volume of about 850,000 units per year in the next few years. PSR
Jack Hao is Senior Research Manager – China for Power Systems Research
