China Commercial Vehicle Demand Remains Subdued

China’s heavy and medium truck and tractor markets remained soft in Q4’15.

Total heavy duty sales, according to ACT Research, declined more than 13% y/y in 2015’s final quarter, though that number also represented a 24% q/q rebound from weak third quarter volumes. For full year 2015, heavy duty vehicle sales in China fell 26% from 2014 levels.

The pace of growth of China’s economy slowed to 6.8% on a year-over-year basis in Q4’15, down slightly from the 6.9% pace recorded in the previous quarter. For perspective, full-year real GDP growth in 2015 was 6.9%, down from the 7.4% recorded in 2014; 2013’s economic growth was 7.7%.

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. According to Jim Meil, ACT’s Principal Industry Analyst, “Recent developments and achievements demonstrate that China continues to evolve, faces necessary changes, and earns recognition for its prominence in the global economy, as the country’s leaders continue to grapple with the challenges of recalibrating economic growth targets and implementing appropriate policies.”

“Heavy and medium truck and tractor markets may show temporary signs of improvement, but will remain subdued for the foreseeable future, until changes in both the country’s economy and the evolution of its transportation industry have stabilized,” said Robert Perkins, Senior Global Business Consultant at ACT. Perkins added, “The country’s transportation industry is undergoing several changes that will impact vehicle demand, including rapidly improving vehicle quality, significant logistics efficiency improvement, and higher capacity vehicles.”

Category: General Update