China’s HD Sales Decline From Record Levels

Sales of heavy-duty commercial vehicles in China were 204,250 units in the third quarter of 2010, a 16 percent increase from the third quarter of 2009, but a 36 percent decline from the record sales of the second quarter of this year.

The China performance volumes are tabulated by China's State Information Center (SIC) and published by ACT Research Co. LLC (ACT).

The recently released China Commercial Vehicle Outlook noted that the only sector to post quarter-over-quarter growth was the medium and heavy bus category. Bus market sales rose 11 percent year-over-year and 9 percent quarter over-quarter. Sales of medium-duty trucks declined 2 percent on a year-over basis. The outlook calls for modest growth from third quarter levels. However, the lower demand in the third quarter reduces the projected growth of commercial vehicles (trucks and buses) for full year 2010 to 41 percent from 62 percent.

The report also provides an overview of the China economy and its impact on sales of heavy- and medium-duty trucks and buses, including details on OEM market share. Highlights from the report include:

  • Inflation is starting to become a concern, although consumer inflation remains well controlled excluding food prices.
  • The cooling of real estate investment will have a direct impact on construction and demand for heavy-duty trucks. However, government investment in low-end housing is scheduled to accelerate, cushioning the decline in construction related demand.
  • The manufacture of heavy-duty trucks is becoming more diverse from a competitive standpoint. The combined market share of the top three manufacturers has fallen from 60 percent in the first quarter of 2010 to 51 percent in the third quarter. The number four through seven top manufacturers all gained market share in the third quarter.

“The overall size of the China commercial vehicle market may have hit a peak in the third quarter of 2010,” said Kenny Vieth, partner and senior analyst with ACT. “The forecast for 2011 is for slightly declining demand before returning to a growth pattern in 2012.”

The China Commercial Vehicle Demand Outlook is published jointly by ACT and SIC and released quarterly. The next issue will be published in March 2011. To subscribe to the report, contact [email protected] or go to our web site at www.actresearch.net.

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