Heavy Truck Sales will Reach a New Peak Stimulated by Policy Adjustment

As is expected by investment corporations, there is a peak for parts of the heavy truck market during the last two months of 2016.

Firstly, there will be two important policy changes in the second half of the year. One is that five ministries will jointly issue a document to administrate the illegal modifying and oversized and overloaded behaviors of trucks; and the other is that PRC’s Ministry of Transport, Ministry of Industry and Information Technology, the Ministry of Public Security, SAIC and AQSIQ released Opinions for further administration of Illegal Modified and Oversized and Overloaded Trucks in August, which contained 4 aspects, 18 executing details and 3 specific projects.

The 3 specific projects include: a one-year special actions for illegal modified trucks controlling to strictly crack down illegal acts from the production process of vehicles through strengthening the regulation of vehicle production, sales, modifying, registration and inspection and usage by Ministry of Industry and Information Technology and related ministries; a one-year renovation for illegal oversized and overloaded behaviors of truck and to comprehensively promote law enforcement of railway police, to unified standards for illegal behaviors based on the changed judging criterion of oversize and overload, to combat with illegal behaviors on the roads by Ministry of Transport and the Ministry of Public Security; a two-year joint law enforcement of car transporter and to carry out the renovation in stages.

Investment corporations believe this policy regulation will laid an influence on heavy trucks far more than market expectations. There are several differences compared with the past law adjustment: First, it unified the judging criterion of trucks’ carrying capacity, thus unified the vehicle management with production standards, and Ministry of Transport and the Ministry of Public Security are to implement the laws collectively, which made a clear attribution of liability; Secondly, the five ministries have asked for a law implementation for the whole country to assure strict regulation in every regions; thirdly, the five ministries are to regulate the processes of production, modifying, registration, inspection and loading to perfect the cooperation scheme.

According to China Association of Automotive Manufacturers, sales of heavy trucks in China during January to September of 2016 was 490 thousand, 20% increased year-on-year. Sales in September was 52 thousand and was 26% increased from a year earlier. It is expected that the wait-and-see attitude of consumers will reduce and sales of heavy trucks is expected to reach a new peak in the fourth quarter. As is predicted, heavy truck sales in 2017 will achieve a new peak and recovery of auto industry will be faster, with a replacement demand for delivery vehicles as a main growth impetus.