Commercial Vehicle Industry in the First Half of the Year: Stable Operation Becomes the New Normal

In the first half of 2024, the domestic commercial vehicle market in China has shown steady progress.

According to data released by the China Association of Automobile Manufacturers (hereinafter referred to as "CAAM"), from January to June, the production and sales of commercial vehicles in China completed 2.005 million and 2.068 million vehicles respectively, with year-on-year increases of 2% and 4.9% respectively. Among them, the production and sales of trucks and buses have increased to varying degrees. In the vehicle segment market, new energy commercial vehicles, natural gas vehicles, and the export market continue to perform strongly, becoming an important force driving structural growth in the industry.

Industry insiders believe that in the first half of this year, China's commercial vehicle industry has shown a recovery growth trend. With the continuous optimization of the domestic economic environment and the pull of a new round of policy dividends, it is expected that the commercial vehicle market will continue to maintain a normalized and stable operation in the second half of the year.

Slight Growth in Truck and Bus Sales

Growth Momentum Still Insufficient

Overall, the commercial vehicle market has been relatively stable in the first half of this year. Looking at the main categories, both the production and sales of trucks and buses have shown a slight growth trend.

Specifically, from January to June, the production and sales of trucks completed 1.764 million and 1.824 million respectively, with year-on-year increases of 1.4% and 4.4% respectively. Compared with the same period last year, except for a slight decline in the production of mini-trucks, the production and sales of the other three major types of trucks have increased to varying degrees. Among them, the heavy truck market's cumulative sales from January to June reached 504,500, a year-on-year increase of 3%, an increase of 16,000 compared to the same period last year; the light truck market's cumulative sales from January to June reached 971,000, a year-on-year increase of 4.21%, overall performance better than the same period last year; the medium truck market's cumulative sales from January to June reached 70,200, a year-on-year increase of 20.62%, which is the highest growth rate in the truck market.

Affected by policy drivers, strong recovery of the tourism market, and rapid growth in overseas markets, the performance of the bus market in the first half of the year was quite eye-catching. From January to June, the production and sales of buses completed 241,000 and 244,000 respectively, with year-on-year increases of 6.4% and 9.3% respectively. Compared with the same period last year, the production and sales of the three types of buses all increased to varying degrees, with large and medium-sized buses showing more significant growth rates. Among them, the cumulative sales of large buses from January to June reached 31,700, a year-on-year increase of 36.79%; the sales of medium-sized buses reached 18,900, a year-on-year increase of 32.89%; the sales of light buses reached 191,100, a year-on-year increase of 4.81%.

Regarding the performance of the commercial vehicle market in the first half of the year, **Deputy Secretary-General of the China Association of Automobile Manufacturers, Chen Shihua** said that although sales have increased steadily, the current commercial vehicle market still faces great pressure, mainly manifested as insufficient market growth momentum and prominent inventory backlog issues. Looking forward to the second half of the year, with the implementation of favorable policies such as trade-in, it will effectively stimulate the vitality of the automotive market consumption and provide strong support for the steady growth of the commercial vehicle industry.

**Secretary-General of the Commercial Vehicle Committee of the China Automobile Circulation Association, Zhong Weiping** said that after three years of cyclical adjustment, the commercial vehicle market in 2024 will tend to be stable and is expected to achieve a growth of about 5%. **Senior Economist of the National Information Center, Xu Changming** predicts that this year's domestic commercial vehicle market will continue to maintain a low-level recovery trend, showing a "moderate" growth, and the total annual increase is expected to be maintained between 4% and 5%.

For the market trend in the second half of the year, mainstream commercial vehicle companies generally hold an optimistic expectation. At the recent 2024 Mid-Year Business Meeting, Foton Motor said that at present, China's macroeconomy has entered a key stage of high-quality development transformation, and the economic growth rate is facing structural adjustments, with the growth rate of infrastructure investment slowing down and the real estate industry continuing to rebound, these external factors will undoubtedly have a certain impact on the cyclical recovery of the commercial vehicle market. However, it can be foreseen that the commercial vehicle market in 2024 will continue to maintain a positive trend of recovery growth.

Heavy Truck Market Demand is Weak

Three Sub-segments Lead the Increase

Although the heavy truck market achieved a slight year-on-year increase in the first half of this year, it showed a "high opening and low walking" trend, and the total sales volume was at a lower level in recent years.

Overall, after the heavy truck market achieved an "opening red" in January, sales took a sharp turn in February, with a month-on-month decrease of 40% and a year-on-year decrease of 25%; entering the sales peak season in March, although heavy truck sales have picked up, the overall performance is still not good, and it has not been able to get rid of the predicament of year-on-year decline. Entering the second quarter, the heavy truck market has shown insufficient momentum, with a month-on-month decrease of 25% in April, a month-on-month decrease of 8% and a year-on-year decrease of 2% in May, and the market in June still has not been able to get out of the trough, with both year-on-year and month-on-month sales declines.

In the view of **Commercial Vehicle Industry Expert Ren Shifa**, the heavy truck market in the first half of the year can be described as "weak demand and gradually showing fatigue", especially the "three consecutive declines" in sales in the second quarter, which fully demonstrates that the driving force of heavy truck market demand is seriously insufficient. The main causes behind this phenomenon can be attributed to several aspects: First, the pace of macroeconomic and consumer recovery is still slow, fixed asset investment has not shown signs of recovery, and the progress of new infrastructure construction is not as expected. In addition, the domestic highway freight market continues to be sluggish, with a shortage of goods, more vehicles and less goods, and a surplus of transportation capacity, which still poses a serious problem, leading to a further narrowing of user car purchase demand; second, the serious backlog of inventory in the industry has had a significant impact on the sales of heavy trucks in the first half of the year.

However, it is gratifying that despite the overall market's lack of prosperity, the performance of natural gas heavy trucks, new energy heavy trucks, and the export market is still eye-catching. Especially in the natural gas heavy truck market, as the price difference between oil and gas further widens, the sales volume of natural gas heavy trucks has reached new highs, and the market share has been greatly improved. Public data from the industry shows that in the first half of this year, the cumulative sales volume of natural gas heavy trucks has broken through the 110,000 mark, a year-on-year increase of 10%, and the terminal market share is close to 40%, fully proving that natural gas heavy trucks have become the key force in driving the growth of heavy truck sales.

For the trend of the heavy truck market in the second half of the year, the industry generally holds an expectation of stability and improvement. This judgment is mainly based on two factors: