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Failing to continue the rebound in August, China Heavy Duty Truck sales of heavy-duty trucks fell 22.20% month-on-month in September, lower than market expectations. Despite the increased volatility in the heavy truck market, the company will continue to benefit from the short-term advantages brought by EGR technology in the future.
China National Heavy Duty Truck Co., Ltd. released its sales report on October 15. The company produced and sold heavy trucks in the third quarter of 2008 to 17,910 units and 16,902 units respectively. In the first nine months of 2008, it produced and sold 67,524 units and 69,419 units, which was accumulated from January to August. Production and sales volume increased by 12.94% and 29.58% respectively year-on-year. The announcement also stated that the actual controller of the company, China Heavy-Duty Truck Group Co., Ltd. (hereinafter referred to as “Group Companyâ€), reported to the China Association of Automobile Manufacturers that its third-quarter production was 23,139 units, and the cumulative production from January to September 2008 was 93,151 units. , an increase of 19.89% year-on-year; the Group's sales in the third quarter was 24,380 units; cumulative sales from January to September 2008 were 94,415 units, an increase of 20.52% over the same period last year.
The company’s September production and sales volume fell 12.89% and 22.20% respectively from the previous month in August, failing to extend the rebound in August, indicating that the impact of the country’s three emission standards switching still exists, and the company’s “electronically controlled inline pump + EGR technology†despite With its price/performance advantage, it has taken a short lead in the competition with the high pressure common rail technology route, but the expectation of economic slowdown has suppressed the demand for heavy truck products that are attributed to the production materials.
In the short term, with the advent of the National III standard, the domestic heavy-duty truck industry has completely ended the sales of the National Standard II vehicle, which will have a greater impact on sales of the domestic auto industry, including Sinotruk. At the same time, as an important factor that has spurred the upgrading and upgrading of heavy trucks since 2006, the weighting and charging policy will be greatly reduced as the number of implementing provinces increases. As of the end of 2007, there were 20 provinces in China that implemented weight-based tolls, accounting for 64.5% of the provinces. Therefore, despite the continuation of the rapid growth trend in 2007, the sales of heavy trucks in the first half of 2008 increased by more than 50% year-on-year, but it is foreseeable that as the three national standards are introduced, the sales growth of the heavy truck industry will slow down significantly in the second half of the year. The production and sales data for the third quarter of the automobile has fully confirmed the above judgment.
However, compared to other competitors in the industry, CNHTC's advantage lies in its “electronically controlled inline pump + EGR†technology. The company currently produces both models equipped with EGR technology and also models equipped with high-pressure common rail systems, both of which can meet the national III emission standards, while the EGR models have better fuel economy and better oil compatibility than the EGR models. The good features, especially the average price advantage of 1-2 million per vehicle, have promoted the EGR technology to achieve a temporary lead in the current national three-way dispute. More than 70% of the vehicles sold by Sinotruk in the third quarter are equipped with EGR models. Currently, only China National Heavy Duty Truck Co., Ltd. has EGR technology and energy production in China, and competitors such as Weichai Power have achieved the fastest production volume of EGR models at the end of the year. Therefore, despite short-term sales still fluctuate, China Heavy Duty Truck will no doubt continue to rely on EGR technology to take the lead in the competition and further expand its market share in the second half of the year.
Of course, the development trend of the card industry in the medium to long-term is mainly due to factors such as the modernization of logistics, the increase in the mileage of expressways and the growth of investment in fixed assets, including the toll-by-weight policy for roads and other factors. The implementation of the National III emission standards will only affect the domestic short-term heavy truck consumption, and it will not be enough to change the general trend of domestic truck consumption to heavy-duty. China National Heavy Duty Truck Group's current three-nation transfer can further consolidate its leading position in the heavy-duty truck industry. The company continues to innovate in response to changes in the truck market structure, and has strong ability to resist fluctuations and risks in the industry. Long-term development is worth watching.
The semi-annual report shows that the company achieved operating income of RMB 1,296,319,800 in January-June 2008, an increase of 52.00% year-on-year; net profit of RMB 438,800,200, an increase of 30.59% year-on-year; and earnings per share of RMB 1.06 in the interim period.
View related topics: China National Heavy Duty Truck Breaks Monthly Sales Record for National Heavy Truck Industry 
Below market expectations China Heavy Truck sales fell 22.2% in September