Commercial vehicle exports continue to fall and passenger trucks are in the doldrums
Due to the lack of official export data for the first quarter, industry insiders suggest that commercial vehicle exports from January to March may not have performed well. According to Fu Peizhao, Deputy Secretary General of the China Import and Export Chamber of Commerce, overseas sales of Chinese commercial vehicles started to decline in October 2008, with a sharper drop in November and December. Based on this trend, the outlook for the first quarter remains bleak, and commercial vehicles are no exception.
The overseas market for commercial vehicles has been chilly this year, much like an unseasonably cold spring. Many bus manufacturers have reported declining export figures. Zhu Yuanbing, head of Yutong Bus's overseas operations, explained that since most of China’s export markets are emerging economies, they have been hit hard by the financial crisis, especially those dependent on oil. These countries now face reduced purchasing power due to limited access to international financing, even if demand still exists.
Yutong’s overseas orders dropped in January and February, with a downward trend beginning in the second half of 2008. Zhu said the company is maintaining its 2009 export plan at the same level as last year, adjusting only if the market improves later in the year. Similarly, Shaolin Coach Group also faced challenges due to currency devaluations in Central Asia, Southeast Asia, and Russia. For example, Kazakhstan’s currency lost 30% of its value, while Russia’s fell by 50%, making it harder for Chinese buses to compete in these regions.
Tang Yanbin, from Shaolin Coach Group, noted that while some countries still have demand, their order sizes have shrunk significantly. Previously, customers would place larger orders considering production and transport cycles, but now, orders are typically under 10 units. In January and February, the company sold just over 20 units, far below its annual target of 1,000. Sun Dongli, from the China Overseas Marketing Planning Department, confirmed that the current situation is worse than expected, with no orders in February after some partial shipments to the U.S. in January.
However, Dajinlong had a positive surprise when it secured a large order from Senegal for 406 buses, with 402 assembled locally through CKD (completely knocked down) parts. The contract was valued at over 160 million RMB and is expected to be completed within eight months. Meanwhile, Daikin Dragon saw modest growth in overseas sales, though it faced challenges in Russia and Ukraine. Han Jinhong, from Daikin Dragon, noted that sales seasons vary by region—Europe peaks in March to June, Africa and the Middle East have no clear season, and Southeast Asia sees activity near year-end.
In the truck segment, while the decline in exports has been less severe compared to passenger cars, the overall outlook remains uncertain. Shaanxi Auto reported overseas sales of 4,000 to 5,000 units between January and March, but due to payment risks, the company now requires full payment or deposits of over 50% for non-exclusive agents. South America and the Middle East have been hit hardest, while Africa has seen some demand driven by Chinese investments. A major deal with Algeria involves 3,200 heavy trucks, with the first 500 delivered in late 2008 and the rest scheduled for delivery by mid-2009.
Sinotruk also expressed concerns about the first-quarter performance, noting weak markets in Southeast Asia and Eastern Europe. To offset losses, the company has focused more on the domestic market, benefiting from infrastructure projects and post-disaster reconstruction in Sichuan. Meanwhile, Anhui Hualing Automobile Group faced delays in Russian shipments due to policy changes, and exports to Thailand were mostly carried over from 2008.
Dongfeng Commercial Vehicles continues to focus on markets like Vietnam, Algeria, and South America, despite currency fluctuations. Hu Dan, from Dongfeng, emphasized the need to build local offices and improve after-sales logistics. The company aims to export 9,000 units this year, excluding subsidiaries.
Many companies hope the government will introduce policies to support exports, such as improved international credit guarantees and higher tax rebates. Zhu Yuanbing highlighted the difficulty in securing export credits, with approval rates often lower than requested. Tang Yanbin also called for subsidies and preferential policies to ease the burden.
Experts remain divided on the best path forward. Xu Changming from the National Information Center argued that the issue isn’t funding but rather declining global demand, the impact of the renminbi’s appreciation, and rising trade barriers. Fu Peizhao added that while the government can offer some support, the main challenge lies in improving market conditions. He pointed to growing opportunities in South America, where trade with Chile and Peru has increased, and where China’s vehicles can benefit from free trade agreements and mutual recognition of certifications.
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