Where is China’s Commercial Vehicle Market Heading?
2009-06-03 Source：english.chinabuses.com
Summarize：According to statistics released by China Association of Automobile Manufacturers (CAAM), China’s production and sales volume of automobiles reached 3.725 million and 3.832 million units respect ...
According to statistics released by China Association of Automobile Manufacturers (CAAM), China’s production and sales volume of automobiles reached 3.725 million and 3.832 million units respectively in the first four months, up by 6.4% and 9.4% year on year. The sales volume of passenger cars stood at 2.827 million units, up by 15.1% y/y. In sharp contrast, the sales of commercial vehicles stood at 1.005 million units, posting a 3.9% decrease.
The continued contraction of China’s commercial vehicle market has raised deep concerns among people involved in the auto industry. DONG Yang, Secretary General of CAAM recently pointed out, if the situation continues, it is very hard for the auto market on the whole to realize an 8% year-on-year growth in 2009.
The anemic performance of the commercial vehicle market can be chiefly attributed to the lack of any incentives from the government to stimulate the Cinderella sector. Despite of the fact that some subsidies have been offered to light-duty truck buyers, China’s sales volume of the truck only stood at 453,000 units, up by 4.6% year on year. Less than two months ago, the government raised the amount of subsidies from RMB 600 million (about USD 87.8547 million) to RMB 1 billion (about USD 146,428 million) in a bid to drag the commercial vehicle market out of its dire situation. However, positive results so far have been limited. Against such a backdrop, CAAM called for the implementation of a host of new measures, including the removal of taxes on buying commercial vehicles so as to spur the market demand. In response, on May 19, 2009, at a regular meeting of the state council, Beijing decided to further increase the subsidies from the previous RMB 1 billion (about USD 146,428 million) to the current RMB 5 billion (about USD 731.850 million). This time, the magnitude of the support is so strong and extensive that many people start to speculate a big jump of the sales of commercial vehicles. Still, the reaction from the market so far has been mixed.
On the very day of the announcement of the new RMB 5 billion subsidies, the share prices of the mainstream commercial vehicle builders all went up. On the second day, the share prices of those companies involved in the auto industry edged up by 2.23% on average. An analyst from Guoxin Securities predicts that the new move from the government has entitled 1.29 million large- and medium-sized commercial vehicles across the nation to enjoy higher subsidies. Shenyin Wanguo, another firm involved in securities, holds that the incentives is likely to create demand for 400,000 units of light-duty trucks and 100,000 units of medium-sized trucks.
However, industrial insiders hold a different point of view. SHE Zhenqing, a veteran expert in China’s bus & coach market dismissed the idea that the subsidies, which only target those owners of old commercial vehicles, will generate a substantial impact on the market. SHE further suggested the measure should be brought in alignment with the Announcement on Further Strengthening Efforts on Fuel and Electricity Saving made by the state council. Thus, some old heavy-polluting buses still running on urban road can be replaced by more environmentally friendly and fuel efficient buses.
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