China Commercial Vehicle Demand Remains Subdued

China’s heavy and medium truck and tractor markets remained soft in Q1’15.

Total sales (domestic and export) were just over 135,000 heavy trucks and tractors in Q1’15, compared to approximately 162,000 units sold in Q4’14, a decline of more than 33% y/y and 16% q/q.

According to ACT Research, which compiled the data, the pace of growth of China’s economy slowed to 7.0% on a year-over year basis in Q1’15, following an unchanged 7.3% y/y in Q4’14.

For perspective, full-year real GDP growth in 2014 was 7.4%, while 2013’s economic growth was 7.7%. In 2010, the country’s economy was growing at a 10.4% y/y pace, but China’s real GDP has been trending downward from double-digit levels and is now settling into a new normal in the single-digit range.

“Heavy and medium truck and tractor markets will remain subdued before shifting to a slow growth path later in the year 2015,” said Robert Perkins, Senior Global Business Consultant at ACT. Concerning the macroeconomy, Perkins said, “Consumption and exports will have a positive impact, but will not likely compensate for the impact resulting from the downturn in real estate and manufacturing investment. However, newly approved infrastructure projects will support truck demand in the second half of 2015; national government funding commitment for these projects will be key due to high local government debt and regulatory revisions requiring a positive payback for projects.”

Category: Featured, General Update