China heavy duty truck market grows fast in the first half year

Although many mainstream heavy truck producers have raised their prices, the demand in April for heavy trucks remained vigorous and orders were already full for May. "It is because the China III emission standard is going to take effect nationwide in July, and customers are rushing to buy older generation heavy trucks that meet the China II emissions standard before manufacturers clear their inventories," said Zhao Chengjun from Shaanxi Automobile Group's sales arm.

At the end of last year, heavy truck makers expressed their worries about this year's market, due to pending China III emissions standard and soaring raw materials prices. As expected, domestic sales of heavy trucks surged 58.7 percent to 167,232 units in the first quarter this year, according to statistics from the China Association of Automobile Manufacturers. Meanwhile, April demand was also furious.

Although we have been in full production for several months, current orders at both Shaanxi Auto and North Benz will not be meet until the end of May, they said. At the same time, FAW, Sinotruk, and Hualing disclosed that May orders were about the same as sales during April. Overseas orders are also positive, but the biggest problem lies in production capacity, a bottleneck for all heavy truck manufacturers.

It is predicted that heavy truck production costs will see an average rise between 20,000 yuan ($2,882) and 25,000 yuan when the China III emissions standard enters into force on July 1, and use cost will also increase significantly. As a result, many customers moved up their purchase plans for this year and pressured heavy truck makers. "Facing the rising steel prices, heavy truck makers increased their inventories and then the product prices in March, which greatly stimulated this market niche," said Zhao.

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