overview of china’s heavy commercial vehicle market · overview of china’s heavy commercial...

© 2016 IHS Markit© 2016 IHS Markit. All Rights Reserved.

Overview of China’s Heavy Commercial Vehicle Market

Jia Li, Senior Analyst,

0086-10-65334552, [email protected]

27 October 2016 | Shanghai, China

© 2016 IHS Markit

Content

1. China truck demand and production outlook

• Short-term china truck demand outlook

• Long-term china truck demand outlook

• China truck production

2. China truck market analysis

• Product upgrading and market trend

• OEM competition

3. Conclusion

Automotive Conference – Shanghai | October 2016

© 2016 IHS Markit

China - short-term heavy truck demand

Negative factor:

• Weak macroeconomic situation

Positive factor:

• Low base effect in 2015

• Replacement demand

550,716 (-27%)

614,173(11.5%)

200,414(-19.1%)

211,485(5.5%)

0

0.25

0.5

0.75

1

2010 2011 2012 2013 2014 2015 2016

Current scenario

HDT

MDT


© 2016 IHS Markit

China - short-term macroeconomic outlook• Chinese government sets a GDP growth target

of 6.5–7% in 2016.

• Economic growth in Q2 2016 unchanged at 6.7% y/y, the slowest two quarters since Q1 2009.

• The state-led investment was accelerated in Q2, and consumer market was stable. However, private investment and export deteriorated from the Q2.

• Heavy truck sales grew with a positive growth rate of 14.8% in the first 6 months of 2016.

0

20000

40000

60000

80000

Jan. Feb. Mar. Apr. May June July Aug. Sep. Oct. Nov. Dec.

2015 2016

China heavy truck monthly sales

-20

-10

0

10

20

30

Jan-12 Oct-12 Jul-13 Apr-14 Jan-15 Oct-15Per

cen

t ch

ang

e fr

om

a ye

ar e

arlie

r

FAI Industrial Output Exports Retail

Macroeconomic parameters

Source: EBSCN,IHS


© 2016 IHS Markit

China - short-term heavy truck demand

Negative factor:

• Weak macroeconomic situation

Positive factor:

• Low base effect in 2015

• Replacement demand

550,716 (-27%)

614,173(11.5%)

200,414(-19.1%)

211,485(5.5%)

0

0.25

0.5

0.75

1

2010 2011 2012 2013 2014 2015 2016

Current scenario

HDT

MDT


© 2016 IHS Markit

China - long-term heavy truck demand becomes stableTruck Sales (Units)

84,735

1,017,433

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

HDTMDTHDT + MDT

Compound Annual Growth Rate: 28.1%


© 2016 IHS Markit

NS5 implementation timeline (MHCV)

Time 2016 2017

Implementation

VehicleHeavy commercial vehicles with application of • City bus• Sanitation trucks• Post vehicles

Heavy commercial vehicles with application of • City bus• Sanitation trucks• Post vehicles

All heavy commercial Vehicles

Region Range11 eastern cities and provinces:Beijing, Tianjin, Shanghai, Liaoning, Hebei, Shandong, Jiangsu, Zhejiang, Fujian, Guangdong, Hainan

Nationwide Nationwide

1st

2016/04/01 2017/01/012rd 3th

2017/07/01

Source: Ministry of Environmental Protection


© 2016 IHS Markit

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%GDP Growth

Consumption Growth

Investment Growth

Export Growth

Real GDP and its components


© 2016 IHS Markit

China - long-term heavy truck demand becomes stableTruck Sales (Units)

84,735

1,017,433

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

HDTMDTHDT + MDT

Compound Annual Growth Rate: 28.1%


© 2016 IHS Markit

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

HDT

MDT

HDT + MDT

China – production developments: 2000–28Truck Production (Units)


© 2016 IHS Markit

Overcapacity in China – implications

0%

15%

30%

45%

60%

75%

90%

0

300000

600000

900000

1200000

1500000

1800000

2009 2011 2014 2015

Production Capacity

Production Volume

Capacity Utility Rate


© 2016 IHS Markit

China export marketChina truck exports (>6t): sales volume and destination

0

20000

40000

60000

80000

100000

120000

140000

160000

2011 2012 2013 2014 2015

OTHERS

NIGERIA

COLUMBIA

ANGOLA

PHILIPPINES

IRAN

ALGERIA

MYANMAR

VIETNAM


© 2016 IHS Markit

Overcapacity + market correction = consolidation ?

Chinese truck market: consolidation is required


© 2016 IHS Markit

Content







• OEM competition

3. Conclusion


© 2016 IHS Markit

Joint venture status of top-10 China heavy truck OEMs

Rank OEM 2014 (HDT) Joint ventures PartnerSales Market share %

1 Dongfeng 155,142 20.9 yes Volvo

2 CNHTC 121,306 16.3 yes MAN

3 FAW 116,634 15.7 no

4 FOTON 109,273 14.7 yes Daimler

5 Shaanxi Auto 104,539 14.1 no

6 JAC 39,833 5.4 yes Navistar

7 Hongyan 25000 3.4 yes Iveco

8 Hauling 18,750 2.5 no

9 Dayun 16,255 2.2 no

10 North Benz 11,597 1.6 no

Total 718,329 96.6


© 2016 IHS Markit

Product upgrading in emerging markets under way

• Engine(more powerful and fuel-efficient)

• Cabin(more comfortable)

• Fuel tank(bigger volume)

• Lightweight

• Internet of vehicles

• Truck product upgrading

Highly-efficient tractor for long-distance transportation


© 2016 IHS Markit

Structure of heavy truck marketUnit: thousand

0

90

180

270

360

450

2010 2011 2012 2013 2014 2015

Cargo Truck Tractor Chassis

24%31% 32% 28% 27% 24% 23%

35%29% 30% 34% 38% 46% 49%

41% 40% 38% 38% 36% 31% 28%

0%

20%

40%

60%

80%

100%

Chassis Tractor Cargo Truck


© 2016 IHS Markit

Structure of tractor segmentUnit: thousand

0

70

140

210

280

350

2010 2011 2012 2013 2014 2015

≤25000kg 25000~40000kg ＞40000kg

2% 2% 1%12% 15%

8% 11%

92% 88% 88%75% 71%

77% 67%

7% 10% 11% 14% 14% 15%22%

0%

20%

40%

60%

80%

100%

＞40000kg 25000~40000kg ≤25000kg


© 2016 IHS Markit

Fuel trend in truck enginesFuel type in HDT segment Fuel type in MDT segment

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015ELECTRICITY NG DIESEL

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015

GASOLINE NG ELECTRICITY DIESEL


© 2016 IHS Markit

Overloading control policy

• Implementation of GB1589 on 26 July 2016.

• Its impact on the future vehicle models?


© 2016 IHS Markit

HDT market competition landscape

18.9% 21.1% 20.6% 21.4% 20.9% 21.3% 19.1%

19.6% 16.2% 17.1% 15.6% 16.3% 17.9%16.8%

22.7%18.0% 16.6% 16.9% 15.7% 15.7% 20.6%

10.1%12.2% 13.7% 14.9% 14.7% 13.6% 11.5%

10.7%11.8% 13.2% 13.1% 14.1% 14.7% 14.2%

2.5% 3.8% 4.1% 4.2% 5.4% 5.4% 6.3%

15.4% 16.9% 14.7% 13.8% 13.1% 11.4% 11.5%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016(Jan.-Jul.)

Others

JAC

Shaanxi Auto

Foton

FAW

CNHTC

Dongfeng


© 2016 IHS Markit

0%

10%

20%

30%

40%

50%

Cargo Chassis Tractor

Dongfeng vs. FAW

10% 17% 18% 22% 20% 15% 12%

56% 53% 54% 49% 49% 54% 56%

34% 30% 28% 29% 31% 30% 33%

0%20%40%60%80%

100%

Tractor Chassis Cargo

Vehicle Type of Dongfeng

Market Share of FAW

0%10%20%30%40%50%


Vehicle Type of FAW

Market Share of Dongfeng

3% 2% 2% 3% 0% 1% 1%34% 36% 38% 36% 36% 24% 25%

62% 62% 60% 62% 64% 76% 74%

0%20%40%60%80%

100%



© 2016 IHS Markit

Foton vs. Shaanqi AutoVehicle Type of Foton

Market Share of Shaanqi Auto Vehicle Type of Shaanqi Auto

Market Share of Foton

31% 38% 36% 27% 25% 12% 15%

37%42% 38% 41% 33%

34% 28%

33% 20% 27% 33% 43% 54% 57%

0%

20%

40%

60%

80%

100%


27% 32% 33% 32% 32% 23% 24%

31%37% 30% 23% 19%

19% 16%

42% 31% 37% 45% 48% 58% 60%

0%

20%

40%

60%

80%

100%


0%

10%

20%

30%

40%

50%


0%

10%

20%

30%

40%

50%



© 2016 IHS Markit

MDT market competition landscape

33% 28% 26% 28% 26% 28% 28%

15%14% 16%

18% 20% 21% 20%

6%5% 8%

11% 13% 3% 3%4%

10% 10%

8%11% 20% 18%6% 9% 8%

6%8%

8%6%

10% 8% 5%5%

5%4% 9%11% 8%

7%5%

4%5% 3%

16% 17% 22% 19% 14% 11% 13%

0%

20%

40%

60%

80%

100%

2010 2011 2012 2013 2014 2015 2016(Jan.-Jul.)

Others

Nanjun

JAC

Qingling

Lifan

CNHTC

FAW

Dongfeng


© 2016 IHS Markit

Conclusion

• NS 5 emission standard implementation timeline will be the key factor impacting short-term truck demand.

• China truck demand is entering the micro-growth period, signalled by China’s economic reform.

• The key short-term challenge is overcapacity; the key midterm challenge is consolidation.

• OEM competition becomes fiercer as China truck production undergoes the upgrading process.

• The growth driver for future truck demand in China is tractor demand.


IHS MarkitTM COPYRIGHT NOTICE AND DISCLAIMER © 2016 IHS Markit.

No portion of this presentation may be reproduced, reused, or otherwise distributed in any form without prior written consent of IHS Markit. Content reproduced or redistributed with IHS Markit permission must display IHS Markit legal notices and attributions of authorship. The information contained herein is from sources considered reliable, but its accuracy and completeness are not warranted, nor are the opinions and analyses that are based upon it, and to the extent permitted by law, IHS Markit shall not be liable for any errors or omissions or any loss, damage, or expense incurred by reliance on information or any statement contained herein. In particular, please note that no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, forecasts, estimates, or assumptions, and, due to various risks and uncertainties, actual events and results may differ materially from forecasts and statements of belief noted herein. This presentation is not to be construed as legal or financial advice, and use of or reliance on any information in this publication is entirely at your own risk. IHS Markit and the IHS Markit logo are trademarks of IHS Markit.

IHS Markit Customer Care:[email protected]: +1 800 IHS CARE (+1 800 447 2273)Europe, Middle East, and Africa: +44 (0) 1344 328 300Asia and the Pacific Rim: +604 291 3600

92

Thank you!

overview of china’s heavy commercial vehicle market · overview of china’s heavy commercial...

Documents