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According to Xu Changming, director of the Information Resource Development Department of the National Information Center, the sharp decline in China's heavy truck sales in 2005 was a "rational return." "Because of the rapid growth in sales in 2004, it was mainly the result of macro-control," he said.
Coincidentally, in the eyes of many heavy-duty corporates, behind the sharp decline in sales of China's heavy-duty trucks in 2005, the "visible hand" policy also played a major role. The policies they refer to mainly refer to two aspects: macro-control policies and governance overload policies.
Macro-control brings deceleration effect
“In 2004, the production and sales volume of medium- and heavy-duty trucks in China reached 370,000 units, far exceeding our forecast of 280,000 units. At that time, we judged that 2004 was a virtual high, and it will definitely fall back in 2005.†Dongfeng Commercial Vehicle Corporation Manager Tong Dongcheng once analysed this reporter.
“In 2005, consumer demand was released ahead of schedule in 2004.†Tong Dongcheng believes that in 2005, the heavy-duty vehicle market was caused by policy factors and fell sharply.
Wang Zhanchao also believes that the macroeconomic control of the country has a significant impact on the heavy truck market. He analyzed that: "Last year GDP growth reached 8.5%, the demand for energy, especially steel, increased and the steel price doubled. Therefore, the country needs to carry out macro control, and it is particularly outstanding that it is determined to purchase housing in real estate development. Because of the country’s strict control over real estate prices, developers have been less active and real estate development has cooled. To a certain extent, the reduction in the quantity of work has reduced the demand for heavy trucks in the market.â€
Insiders reminded that in the medium to long term, macroeconomic regulation can create a good economic operating environment for the development of automobiles and other industries. However, in the short term, because the automotive industry is an industry with a high degree of upstream and downstream correlation, fuel, raw material supply, road traffic, and credit will all have more or less impact. If the GDP growth rate is reduced from 9.5% to about 8%, it may continue to have a decelerating effect on the growth of the auto market.
Super loosening influence heavy truck sales
In Tong Dongcheng’s view, the government’s policy of oversupply has been loosened, which was another major factor in the dramatic decline in heavy vehicle sales in 2005.
This view has been widely recognized within the automotive industry. "The current situation is that we don't know what kind of product to produce. The dealer does not know what kind of product to sell. The user doesn't know what kind of product to buy." Youwei Minister of FAW Xichai told his reporter about his upset.
As the main engine supporting enterprise of FAW Jiefang heavy truck, FAW Xichai felt pressure after the Spring Festival last year. Although the company strongly promoted the advantages of high-power engines to users, users did not buy it. What users generally need is a truck loaded with engines of 170 kilowatts (about 230 horsepower). "Because the state has ruled over the power to relax." Minister You You gave the reasons why users do this.
The Minister also analyzed that as the country promotes the construction of a conservation-oriented society, the domestic coal transportation volume has been significantly reduced, indirectly affecting the demand for heavy vehicles by users. In particular, after the coal mine enterprises violated the rules and violated the law, the country was determined to ban a large number of coal mines, which also affected the sales of heavy trucks.
Some industry experts also pointed out that in 2005, the production and sales volume of most heavy-duty truck companies fell year-on-year, failing to complete the production and sales targets set at the beginning of the year. Macroeconomic policies are of course an important reason, but they are also related to the overoptimism of enterprises in judging the macro situation. It is undeniable that China's heavy truck market is still a policy-oriented market. In such a market environment, deviations in the understanding of policies are obviously a risk that companies must focus on in their operations.
Double power becomes single power
In 2005, the annual sales volume of domestic heavy trucks was 179,781 units, a decrease of 29.46% compared with the total sales volume of 254,874 units in 2004; the annual output was 170,621 units, a decrease of 33.48% compared with 2004. Output (including non-complete vehicles, the same below) ranked among the top 7 FAW, Dongfeng, China National Heavy Duty Truck, Beiqi Foton, Shaanxi Auto, Chongqing Hongyan, and Northern Mercedes-Benz. There are 5 companies with heavy-duty trucks output falling year-on-year, and there are 4 The company's sales (including non-complete vehicle statistics, the same below) declined year-on-year.
When talking about the domestic auto market in 2005, Xu Changming said such a sentence: "The growth of the auto market has changed from a dual power to a single power, which has led to an overall decline in the overall growth rate of automobiles."
The so-called “dual power conversion to single power†refers to a significant decline in China’s heavy truck sales in 2005, and has lost the role of driving the growth of the entire automobile market together with sedan products. "The analysis of the data we can clearly see that in 2005 the heavy truck sales have fallen back to the level of 2003." Xu Changming said.
Interestingly, the three companies whose sales increased year-on-year, namely China National Heavy Duty Truck Group, Shanxi Auto and Chongqing Hongyan, are all production companies of Steyr heavy trucks. Statistics show that heavy truck sales in China in 2005 reached 26,242 units, an increase of 16.89% year-on-year; Shaanxi Zhongqi sold 9,583 heavy trucks last year, an increase of 24.44%; Chongqing Hongyan sold 10,859 last year, an increase of 5.65%.
Shaanxi Hande Axle Co., Ltd. is one of the major axle manufacturers in China. The general manager of the company, Wang Zhanchao, told the reporter that the Steyr series is still the protagonist of the domestic heavy truck market, and has a Steyr platform for heavy-duty truck companies. The products have been selling well.