For the first time in eight years, negative growth, 2005 can be described as a "turning point" in the heavy truck market. Some old brands such as FAW, Beiqi Foton, etc. cannot be exceptional
On January 23, 2006, Beiqi Foton Motor Co., Ltd. issued an announcement stating that due to the huge decline in sales of its heavy trucks, the company suffered a loss in 2005, and its accumulated net profit for 2005 increased substantially compared with the same period of last year. The decline rate was more than 50. %.
Happy days are too short! For today's heavy-duty vehicle manufacturers, this feeling is particularly strong.
From the "blowout" growth of the heavy-duty vehicle market in the previous year to last year's "cold spring" - the first negative growth in eight years. In only one year, heavy-duty vehicle manufacturers in China have experienced a reversal of the road and experienced great joy and sadness.
“We were busy in 2004 and recruited employees every three times. Like us, more than 20 domestic heavy-duty vehicle manufacturers were responding to this booming market. Heavy-duty truck sales reached more than 370,000 units a year...†For Dong Zhu, who once worked for a large-scale heavy-duty vehicle company, this happy memory further exacerbated the pain he was currently facing: In 2005, the demand for domestic heavy-duty vehicles fell drastically, and sales of various companies fell almost monthly. China's heavy-duty vehicle market has entered a "low adjustment period!"
Heavy trucks are short in spring
Although "there are no red flowers and leaves do not grow green every year", the heavy-duty truck market will be cold and heavy for a short period of one year, still leaving many companies and employees at a loss.
What are the reasons for the decline in heavy truck market in 2005?
Undoubtedly, "the impact of the country's macro-controls and policies and regulations" is the main reason for creating this cold spell. Wang Xianghui, a senior analyst at the zero division strategy consulting firm's automotive division, said that the country's macroeconomic control, tightened investment, and reduced engineering projects have caused a reduction in the number of heavy trucks.
In the first half of 2005, the country’s relevant automobile policies and regulations were promulgated frequently, such as the Regulations on the Recall of Defective Automobile Products, the Implementation Measures for Automobile Brand Sales Management, and the Regulations on the Management of Toll Roads, which limited the development of heavy-duty vehicle manufacturers. In just half a year, China’s promulgated policies and regulations relating to the automotive industry totaled about sixteen. These policies and regulations that have been implemented or will be implemented have forced auto manufacturers to follow suit, adjust their strategies, and adapt to new rules.
In order to make rational use of limited resources and maximize production efficiency, the state has vigorously advocated the construction of a conservation-oriented society in the “Eleventh Five-Year Plan†and has imposed restrictions on the development of high-energy-consuming and inefficient industries, and ordered a group of high-energy-consumption Inefficient or redundant construction projects were stopped for rectification. This policy has impeded the development of industries such as steel and coal, which are closely related to heavy vehicles, and has seriously affected the growth of the volume of social freight. Many heavy trucks are in a state of “no livelihoodâ€.
The rise in oil prices has led to a marked reduction in consumer spending on heavy-duty vehicles. The rise in raw material prices has led to an increase in the price of heavy-duty trucks (Europe II environmental protection markup, ABS brake system price increase, and multi-axis price increase), resulting in increased purchase costs. These factors have also directly affected China’s mid- and heavy-duty truck market in 2005. .
Quality "falling back"
2005 can be described as an "inflection point" for the heavy truck market. In a “war chaosâ€, the sales pattern of the heavy-duty truck market has also unconsciously changed, and quietly, Dongfeng Motor has actually won the top spot.
In the view of the industry, the competitive landscape of the domestic heavy-duty vehicle market in 2004 can be described as a combination of six males. After the heavy-duty vehicle market entered the adjustment period in 2005, competition in the industry has intensified, and the market competition pattern has also changed. More than 20 heavy-duty truck companies have shifted their sales seats in an instant. Dongfeng Motor first jumped onto the "top spot" in sales of heavy-duty vehicles. FAW Liberation ranked second, and heavy trucks ranked third. Shaanxi Auto, Futian, and Hongyan are ranked four to six. The original “2+4†quickly formed a “3+3†competitive pattern. It is worth mentioning that, in 2005, Hubei Sanhuan, Jianghuai Gefa, Sichuan Yinhe, Shanghai Huizhong, Anhui Hualing and Nanxi Lingye, etc., have all experienced rapid growth in heavy truck development.
"Some old-brand heavy truck companies (such as FAW, Beiqi Foton, etc.) have experienced different degrees of decline last year, mainly due to 'falling their heads' in terms of quality." According to Wang Cong, due to the short supply of products in previous years, these production The factory had many problems in quality control, including quality control of suppliers and remodeling plants. As a result, the quality of some products fluctuate greatly, resulting in a gradual loss of product reputation.
The main reason for the decline of FAW's liberation is that there are certain defects in the design of AWE's heavy trucks, such as the engine power and the small displacement, which are directly related to the other. The other reason is that FAW's liberation is in a stage of strategic transformation and elephant turning; The decline of Beiqi Foton shows that when the market is weak, only the cost-effective products can be recognized by the market based on quality-based heavy truck products. If anyone ignores the quality of products, they will be punished by the market.
Do a good job of management to deal with the "cold stream"
However, according to industry experts, the heavy-duty market will not make long-term stays. In other words, the downturn in China's heavy-duty truck market is only a phased period, leading to some factors that will reduce the sales volume of the heavy-duty truck market will be gradually eliminated in the next year or two, and the industry is expected to rebound.
Experts also asserted that in the next few years, the products of China's heavy-duty vehicle market will enter the “quality luxury†era. The “heavy fuel consumption, high power, heavy-duty, multi-axis†and other heavy-duty trucks that meet the policy requirements and market requirements will be sought after by the market. Judging from the sales situation in 2005, under the influence of both policies and oil prices, the trend of heavy-duty trucks moving toward large tonnage is very clear. Both the vehicle and semi-trailer tractors have smaller tonnage, and the year-on-year decline in tonnage is higher. The bigger, the higher the year-on-year increase. Moreover, the new "Automobile Industry Development Policy" focuses more on energy conservation. Therefore, high-end heavy-duty trucks with low fuel consumption, large tonnage, high power, and suitable for specialized transportation will be the focus of development in the next few years.
Before June 2003, domestic heavy-duty truck products were basically in the "common and practical" stage (users only paid attention to the fact that they were durable, they did not pay attention to the appearance and interior, etc.). From the second half of 2003 to the end of 2004, they entered the "comfort type". At the stage (users began to pay attention to appearance, interior, comfort, etc.), after entering the year 2005, domestic heavy-duty truck products have clearly entered the "quality luxury" stage (users began to pay attention to grades, quality, reliability, new technologies, etc.). In the second half of last year, major manufacturers successively launched their own high-end products, among which Dongfeng Liuzhou Automobile launched “Ba Longâ€, FAW liberation launched “Aoweiâ€, Jinan CNHTC launched “HOWOâ€, and Shaanxi Zhongqi launched “DeLongâ€. Auman launched the "Intercontinental Edition" series, Chongqing Hongyan launched "big Kang" and so on! These products have been significantly improved in quality, configuration, and grade compared with previous products.
From the aspect of products, China’s demand for high-end heavy trucks will appear within the next 3 to 5 years. Compared with foreign countries, the current heavy-duty truck market in China is only equivalent to the primary stage in foreign countries, and the improvement of the technological level is the bottleneck for the entire Chinese commercial vehicle sector to break through. At present, most users are still in the primary consumption state of “price-determined purchaseâ€, and they cannot accept high-end products that are expensive. With the continuous improvement of the technological level, the continuous maturity of consumers and the improvement of living standards, the intensive demand for the heavy truck market in China in the next three to five years will surely be strong.
However, in the face of this difficult period, Wang Shui-bian suggested that automobile manufacturers should actively take countermeasures, conscientiously do a good job of internal management, minimize operating costs, resolve the operational risks brought about by the decline in production and sales, and strengthen internal personnel. The improvement of training and personnel quality, especially the training and promotion of personnel skills in sales and service systems, has become the key for heavy truck companies to enhance their market competitiveness in this period; steadily and standardly promote the research and production of new products, and discover in advance. And to solve possible problems in quality, process, design, etc. to ensure that new products are put into one-off success; and for the continuously declining market, heavy-duty truck manufacturers are making great efforts in service brands, focusing on strengthening service networks and system building, and strengthening service brand building. Meanwhile, The timely introduction of new products and the implementation of "quality warfare" and other positive measures can be said to be the main measures for manufacturers to deal with market difficulties.
In general, "the prospects for the heavy-duty truck market are promising and have great potential." It is expected that in 2006, the market will grow steadily, achieving a total production and sales volume of 270,000 vehicles. The heavy truck cold current will end at the end of 2007, and the new growth cycle of the heavy truck market may be after 2008. It is reported that the market capacity is at least 500,000 units or more. By then, China's heavy truck market will usher in a new spring.
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