According to the latest data from the first commercial vehicle network, China's heavy truck market sold about 0.059 million vehicles (wholesale caliber, including exports and new energy vehicles) in July 2024, a 17% decrease from June and a 4% decrease from the same period last year; a drop of about 2,000 vehicles.

Will the heavy truck market turn from bad to good with the sale of 0.059 million units in July?

According to the latest data from the first commercial vehicle network, China's heavy truck market sold about 0.059 million vehicles (wholesale caliber, including exports and new energy vehicles) in July 2024, a 17% decrease from June and a 4% decrease from the same period last year; a drop of about 2,000 vehicles.

With 0.059 million vehicles sold, it is only higher than sales in July 2022 (0.0452 million vehicles) in the past eight years, and lower than sales in other years in July. Cumulatively, from January to July 2024, China's heavy truck market sold about 0.5635 million vehicles of various types, an increase of 2% year-on-year, and a net increase of nearly 0.014 million vehicles. The cumulative growth rate further narrowed compared to January to June.

According to the analysis of the first commercial vehicle network, the heavy truck industry in July has several points worth noting. Firstly, the domestic terminal sales are higher than the wholesale sales. In July, due to the high channel inventory in the first half of the year, all automakers are doing work to reduce inventory and burden, resulting in relatively low domestic wholesale sales. According to the first commercial vehicle network's forecast, the domestic heavy truck terminal sales in July are expected to increase by about 5% year-on-year, a 4% decrease from the previous month, indicating that the new vehicle purchase demand of the highway freight industry has basically bottomed out.

Secondly, in July, in the low-cost and low-yield market environment, the prosperity of the freight industry was low, and the overall terminal demand was weak, but gas heavy trucks bucked the trend, rising nearly 70% year-on-year and nearly 10% month-on-month.

Thirdly, as one of the "three pillars" of China's heavy truck market, sales of new energy heavy trucks continued to maintain a good momentum in July, with expected terminal sales exceeding 5,300 units, up about 1.2 times year-on-year. Let's take a look at export. Following the first year-on-year decline in heavy truck exports in June this year, heavy truck exports in July are expected to drop slightly by about 7%. However, the performance of non-Russian regions is relatively strong as a whole, supporting export market to maintain above 0.023 million vehicles from June to July.

Sino truck sold 0.016 million units, jiefang up 43%, Dongfeng/XCMG grew against the trend

What is the "report card" of the top ten companies in the heavy truck industry in July this year?

According to the first commercial vehicle network data, in the July market "qualifying race", three companies sold more than 10,000 units, with China National Heavy Duty Truck Group (03808) taking the crown with 0.016 million units. The other two companies selling more than 10,000 units were Jiefang (0.012 million units) and Shaanqi (0.01 million units); the companies that grew against the trend were Jiefang (43%), Dongfeng (4%), and XCMG (25%) . Looking at the cumulative figures, the five companies that achieved year-on-year growth in market share from January to July included Sinotruk, Jiefang, Dongfeng, XCMG, and Beiben.

Specifically, China National Heavy Duty Truck Group sold about 0.016 million heavy trucks in July, maintaining the first place in the industry. Its cumulative sales from January to July were about 0.1554 million units, a year-on-year increase of 4%, and its market share increased by 0.3 percentage points to 27.6%.

Jiefang sold about 0.012 million heavy trucks in July this year, a year-on-year increase of 43%. From January to July, Jiefang's cumulative sales of heavy trucks were about 0.1181 million units, a year-on-year increase of 8%, and its market share increased by 1 percentage point to about 21%.

Dongfeng (including Dongfeng Commercial Vehicle, Dongfeng Liuqi Passenger Car, Dongfeng Huashen, etc.) sold about 0.0085 million heavy-duty vehicles in July, up 4% year-on-year. From January to July this year, Dongfeng sold approximately 0.0925 million heavy-duty vehicles, a year-on-year increase of 6%, and its market share was about 16.4%, maintaining one of the top three in the industry and increasing its market share by 0.6 points.

Shaanxi Automobile Group (including Shaanxi Heavy Duty Truck, Shaanxi Commercial Vehicle, etc.) sold about 0.01 million heavy trucks in July. From January to July, sales of various heavy-duty vehicles were approximately 0.0905 million units, a year-on-year increase of 2%, and its market share was 16.1%. Foton Motor (including Foton Daimler) sold about 0.005 million heavy trucks in July, with cumulative sales of various heavy trucks from January to July being about 0.0432 million units and its market share was around 7.7%.

In the third echelon of the heavy truck industry, Dayun Heavy Truck sold 2268 vehicles in July, ranking sixth in the industry. From January to July this year, Dayun Heavy Truck sold about 0.0158 million units, a year-on-year increase of 4%, ranking sixth in the industry, and its market share was 2.8%. XCMG Heavy Truck sold about 1500 vehicles in July, a year-on-year increase of 25% against the trend. Its cumulative sales from January to July were about 0.0112 million units, a year-on-year increase of 9%, ranking seventh in the industry, and its market share was 2%, up 0.1 percentage points.

In July of this year, Jianghuai Automobile sold about 900 heavy trucks, with a cumulative sales of 0.0084 million vehicles from January to July, ranking eighth in the industry in cumulative sales, with a market share of about 1.5%. Beiben Heavy Truck sold 598 heavy trucks in July, with a cumulative sales of 0.0066 million vehicles from January to July, an increase of 9% year-on-year. It ranked ninth in cumulative sales in the industry, with a market share of about 1.2%, an increase of 0.1 percentage point. SAIC Hongyan sold about 450 heavy trucks in July, and the cumulative sales of heavy trucks from January to July this year are approximately 0.005 million, a year-on-year increase of 1%, with a market share of about 0.9%.

Closing remarks: What about the future?

In July, under the attention of the public, the commercial vehicle old for new policy finally came. On July 31, the Ministry of Transportation and the Ministry of Finance issued a "Notice on the Implementation of Scrap and Renewal of Old Operating Trucks", providing subsidies for scrapped and renewed operating trucks. According to the policy, a scrapped National III operating diesel heavy truck that has been used for 10-11 years can receive a subsidy of 0.045 million. If the owner purchases a National VI operating diesel heavy truck (for 4-axes and above models) again, they can receive an additional subsidy of 0.065 million yuan, with a total subsidy of 0.11 million yuan for scrapped and new purchased truck. If the owner purchases a new energy heavy truck (for 4-axes and above models), they can receive a subsidy of 0.095 million yuan, and the total subsidy for the scrapped and new purchased truck is 0.14 million yuan.

However, it is worth noting that natural gas heavy trucks are not included in the scope of subsidies this time. The "Notice" mentioned that "the subsidy for scrapping and purchasing National VI emission standard operating diesel trucks = the subsidy for scrapping old operating diesel trucks in advance + the subsidy for purchasing National VI emission standard operating diesel trucks", and "the subsidy for scrapping and purchasing new energy vehicles = the subsidy for scrapping old operating diesel trucks in advance + the subsidy for purchasing new energy operating trucks". Obviously, "National VI emission standard operating gas trucks" is not included, that is to say, the new purchased National VI natural gas trucks cannot enjoy the subsidy.

First Commercial Vehicle Network analysis believes that after the subsidy details come out, there will be several phenomena in the next few months: first, vehicle owners scrap old vehicles and purchase National VI operating diesel trucks or new energy vehicles. Second, only to scrap, not to buy again, which is equivalent to the clearance of surplus or invalid capacity in the freight market. Third, after the vehicle owner scrapes the old vehicle and receives the subsidy, they can buy a second-hand diesel or natural gas truck (unable to enjoy the new purchase subsidy, but the benefit is that the second-hand car is cheaper and do not need to consider monthly loan payments).

From the perspective of new vehicle purchases, the period from September to December 2024 will be the time for policy concentration (August itself is a market off-season, and it is also a promotion period and landing period. The market's response to policies will not be so fast). The most benefited product varieties are undoubtedly diesel heavy trucks and new energy heavy trucks. The new energy heavy trucks are expected to hit the target of annual sales of 0.06 million. However, since most of the National III trucks are in remote areas, inside factories or used for short-distance transportation, and there are still many vehicles parked in parking lots across the country for long-term parking. In addition, gas vehicles are not included in the scope of subsidies. Therefore, the "new car market boom" is not likely to happen. (At most, it is a "small outbreak" with a few tens of thousands of policy increments), and the industry should not be too optimistic.