Automotive industry: Focus on export heavy truck diesel light passengers

The commercial vehicle industry in 2006: the industry picked up and sales grew steadily The commercial vehicle industry has been able to recover from the downward trend since 2002 and gradually pick up. In the January-October period, China produced and sold 1.6757 million commercial vehicles and 1,654,800 vehicles, an increase of 13.60% and 12.92% year-on-year.

In the truck industry, the recovery of heavy-duty trucks has increased, with sales up 24% year-on-year from January to October; China Cards continued to be in a low state, with sales volume down 3.17% year-on-year, which is the only declining market for trucks; light trucks are returning steadily, The growth rate further declined from 13% in 2005 to 10.80%.

In the passenger vehicle industry, the growth of large passenger cars slowed down, with sales volume up 11.23% year-on-year from January to October. China Passengers benefited from the rural passenger transport market. Sales volume increased by 24.72% from January to October. Light passengers got rid of the negative growth for two consecutive years and started to bottom out. Sales volume increased by 8.24 from January to October.

The commercial vehicle industry in 2007 maintained a growth rate of around 10%. Hot spots: exports, heavy-duty trucks, and diesel light passengers. From the perspective of overseas mature market development, the proportion of commercial vehicles has been declining. This is also the case in the Chinese market. Under this trend, the growth rate of commercial vehicles will be much lower than that of passenger vehicles.

With the deepening of macro-control, the growth rate of fixed asset investment in 2006 will fall to about 20%, and it will further decline in 2007, and the sales growth of trucks will fall.

In addition to the passenger car demand is directly proportional to the amount of road passenger transport, in addition to demand from the stock update and overseas exports, the overall growth rate will remain stable.

After many years of market baptism, commercial vehicles can be far lower than the prices of developed countries' products and meet the needs of developing countries in the world. It is estimated that exports will continue to grow rapidly in 2007.

In 2005, heavy trucks deviated from normal levels and fell sharply. In 2006, they began to recover. At present, weight-based tolls have been imposed in 32.26% of the country. With weight-based tolls nationwide, demand for heavy trucks will increase steadily.

With the soaring fuel prices, the economic efficiency of diesel vehicles has been recognized by more users. In recent years, diesel light passengers have become a new growth point for the passenger car market. According to the growth of the past, the sales growth of diesel light passengers in 2007 will be around 30%.

Industry Outlook in 2007: steady growth in the industry with a growth rate of around 10%

Why do we think that the overall growth of the commercial vehicle industry will be around 10% next year?

First of all, from the perspective of overseas mature market development, the proportion of commercial vehicles is declining. China's market also presents this situation, especially after 02 years. Under this trend, the growth rate of commercial vehicles will be much lower than that of passenger vehicles.

Second, judging from the growth rate of passenger cars and trucks. As can be seen from Figure 5, the correlation between the sales growth of trucks and the growth rate of fixed asset investment is relatively obvious. In 2005, the growth rate of fixed asset investment was 25.7%. With the deepening of macro-control, the growth rate of fixed asset investment in 2006 will fall to about 20%, and it will further decline in 2007, and will fall below 20%. In this context, the demand growth of trucks will further decline. The growth rate in 2006 is estimated to be between 11% and 12%. The increase in demand for passenger cars in 2007 will be mainly proportional to the turnover of road passenger transport, except for SARS. During the period of decline, most of the time growth rate is between 8-10%. According to our understanding from passenger car manufacturers and passenger transport companies, there is currently excess capacity in the domestic passenger transport industry. Therefore, new demand will not be too large, inventory renewal will be the main growth point, and exports will be an incremental part. The state stipulates that the service life of passenger cars is 8-10 years, but due to the relatively high intensity of use, the average service life is basically 5-6 years. Therefore, the update demand for sales in 2001-2003 will be released in 07 and 08. The specific quantity is Annual increase of 1-2 million vehicles (18,000 more than in 2001, and 8,000 more in 2002 than in 2001). This part of exports has grown rapidly. Last year, it exported 12,000 vehicles, which is estimated to be more than 20,000 this year and is expected to reach 30,000 next year.

Based on the above analysis, we determine that the overall growth rate of commercial vehicles in 2007 is about 10%.

Industry hotspots in 2007: Exports, heavy-duty trucks, and diesel light passenger hot spots: rapid export growth In terms of exports, the trend of China’s equipment to meet the global low-end market has been basically established. After many years of market baptism, commercial vehicles have begun to go abroad in large quantities. China's light trucks, medium- and heavy-duty trucks, and large and medium-sized passenger vehicles and other products are based on a large domestic market and at the same time far lower than the prices of developed country products to meet the needs of developing countries in the world.

The export of commercial vehicles in China has grown rapidly over the past three years. See Table 4 for details. It is worth noting that the domestic bus exports have seen an increase in volume, indicating that the profitability of export companies has further increased. In the first three quarters of 2006, the number of passenger car exports was 18,400, an increase of 1.1 times year-on-year; foreign exchange earned 372 million U.S. dollars, an increase of 1.4 times year-on-year. The main reasons for the growth of passenger car exports are the following:

1. The influence of Chinese passenger cars on the world bus market is getting bigger and bigger (the cost-effectiveness of the products is obvious, the distance from foreign outstanding brands is getting smaller and smaller, and bus companies show greater and greater strength);

2. The bus companies' initiative has been continuously enhanced (market development has progressed significantly, brand promotion has been strengthened, technology has been continuously improved, and more and more attention has been paid to world hot spots such as environmental protection, energy conservation, humanization, etc.);

3. The trust level of foreign users is getting higher and higher (China's passenger car market share in the Cuban market, the Middle East market, and the Asian market is getting higher and higher, and more and more foreign dealers are willing to operate Chinese passenger car products).

Hotspot: Recovery of heavy trucks

Judging from the situation of China’s macroeconomic regulation and control, the past several macroeconomic adjustments and adjustments generally lasted 2-3 years. This time began in April 2004. Our judgment is likely to end in the second half of 2007, which lays a foundation for the increase in the demand for heavy trucks. A relaxed environment.

In June 2004, a large-scale super-violence operation was launched nationwide, which led to a surge in demand for the heavy truck market. However, since 2005, the law enforcement standards in some localities across the country have been tightened and tightened. This has led to an increase in the uncertainty of transport operators and a wait-and-see attitude among users, leading to a significant decline in sales of heavy trucks in 2005. Of course, this decline is a deviation from normal levels. In 2006, the heavy-duty truck market experienced a recovery.

At present, weight-based tolls have been imposed in 32.26% of the country. With weight-based tolls nationwide, demand for heavy trucks will increase steadily. In addition, under the influence of policies and oil prices, the trend of heavy trucks moving toward large tonnage is very clear. Therefore, we believe that heavy trucks will continue to recover in 2007, with growth rates of 15-20%.

Hot spot: Rapid growth of diesel light passengers

Judging from the dieselization rate of vehicles, the dieselization rate of light passengers in foreign countries has reached 80%, while that of China is only about 30%. With the soaring fuel prices, the economic efficiency of diesel vehicles has been recognized by more users. At present, the new common-rail diesel engine is 20% more powerful than the original diesel engine, and the fuel consumption is reduced by 20-30%. As China's diesel engine technology is increased through technology introduction or other methods, the output of high-efficiency and energy-saving light diesel passenger cars is steadily increasing. Diesel light passenger vehicles have become a new growth point for the passenger car market.

From January to September 2006, the sales of diesel light passengers reached 82,050 vehicles, an increase of 31.8% over the same period of last year, which was far higher than the industry average. It is expected that with the continuous rise of domestic and international oil prices, the market share of diesel-based light passengers will gradually expand. Judging from the growth in the past, the annual growth rate of diesel light passenger sales in 2007 will be around 30%. With the implementation of State III standards, the demand for light diesel engines that meet the standards will increase rapidly.