Will 2018 Mark the Beginning of an Overall Downturn for China’s CV Market?

While not impacting each commercial vehicle segment every year, structural changes within China’s commercial vehicle market are expected to exert downward pressure through 2022, according to the most recent China Commercial Vehicle Outlook, jointly published quarterly by ACT and China’s State Information Center (SIC).

The Outlook includes an overview of the China economy and a review and forecast of China’s heavy and medium-duty truck and bus markets, as well as analysis of OEM market shares within China.

“2018 is the start of a continuously down market through 2022, with many forces acting to provide downward pressure,” said Robert Perkins, Senior Global Business Consultant at ACT Research. He continued, “That said, the downward pressure won’t apply to all subgroups every year. For example, dump truck demand is expected to be up substantially in 2018, due to the NSIII vehicle replacement requirements.”

With increased operating costs due to rising fuel and equipment costs, and freight rates dropping due to overcapacity, we expect structural changes to continue to pressure the Chinese commercial vehicle market. “Domestic sales of heavy duty trucks and tractors were up nearly 14% year-over-year in Q1’18, while China’s domestic medium duty truck market shrank by 14% when compared to the same quarter in 2017,” noted Perkins. He added, “China’s bus segment saw a 20% year-over-year uptick in Q1, due primarily to the sale of new energy vehicles.”

According to Perkins, “ACT Research anticipates that, in the next five years, policies regarding commercial vehicles in China will focus on being green and being safe.” He cautioned, “While this will promote product updates and technology shifts, they should not cause the large market fluctuations akin to what was experienced in 2016 and 2017.”

SIC is affiliated with the National Development and Reform Commission of China and is engaged in research on the macro-economy, key industries and information technology.

ACT is the worldwide leading publisher of new and used commercial vehicle industry data, market analysis and forecasting services for the North American market, as well as the U.S. tractor-trailer market and the China CV market.

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