yeh i cet presentation
TRANSCRIPT
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The Shape of China’s
Truck and Bus Market
Yumin Yeh
Manager
Sustainable Development & Strategic Partnerships
Innovation Center for Energy and Transportation
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The Innovation Center for Energy and Transportation (iCET), registered in Beijing, China and Pasadena, California, is an independent non-profit organization in the areas of low carbon transportation, clean energy and climate policies.
Our Mission - to bridge China with the rest of the world, especially with the US, and provide decision makers at all levels with urgently needed innovative solutions to solve the energy and climate crises.
About iCET
Our Work - identifying and introducing international
best practices, providing expert advice, planning and
coordination, media outreach.
Low Carbon
Transportation Program
Low Carbon Transportation
Fuel Economy Standards and Policies for China
Low Carbon Fuel Standards and Policies
Green Car Guide and Online Rating
Electric Vehicle Research
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Environmentally Friendly
Vehicle Program
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What’s in today’s
presentation?
• China’s overall market shape and unique, key trends in China’s truck and bus market, especially in comparison with the US
• Major findings from the only China Clean Truck and Bus Business Opportunity Guide 2012
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• One of a kind 60-page guide available for
US companies
• Recent data from 2011, especially trucks
• Focused specifically on commercial
vehicles market (others are focused on
passenger vehicles)
• Includes success stories, policy
overview, top manufacturers, top
suppliers and much more
• Maybe next year you will be in the guide!
Total Volume of Commercial Vehicles in China
• China has simply become the biggest single region for
the manufacturing and use of medium and heavy-duty
vehicles in the world, surpassing the volumes built in any
other region.
• China’s commercial vehicle industry has experienced
rapid volume growth since 2001 with an average annual
growth rate of 14.7%.
• Commercial trucks and buses account for roughly half of
China’s transportation energy use, as compared to one-
third of transportation energy use in US.
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• Total sales of commercial vehicles (mini, light, medium,
and heavy-duty trucks and buses) in 2011 were
approximately 6.93 million, although a huge portion of
the overall totals are mini and light trucks.
• Medium and heavy-duty commercial vehicles sales in
2011 (weight classes 3-8 in the US) together total more
than 1.4 million. More than two times the US production.
• Bus sales over 400,000 in 2011. So the bus market still
many times larger than US production, particularly of
urban transit buses.
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Total Volume of Commercial Vehicles in China
Truck Market in 2011
China’s Truck Market Sees a Decline in 2011, but Only
After Years of Sustained Growth
•China’s overall truck market did see an 8.9% decline in
2011, a trend which continued into 2012. This is not entirely
unexpected, as the truck market experiences a down year
roughly every five years, but this was the largest decrease in
almost 20 years.
•An uncertain market indicator that should be kept in mind
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Commercial Vehicle Market
by End Use
Trucks dominate the
China commercial
vehicle market by
volume
Trucks make up
close to 90% of
heavy-duty vehicle
registration by
vehicle end use
type.
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Quick Overview: Fuel Usage
• There is a disparity between how trucks and buses use
fuel
• The majority of all trucks and buses in China are
powered by diesel (97%).
• However, the city bus is an exception: 12% are powered
by CNG, 5% by gasoline.
• This is likely because government subsidies for NEVs
have definitely favored public sector bus fleets versus
any truck fleets. Won’t go into detail here… 10
Truck Weight Classification Standards in China since
2005
•Light-duty Trucks (LDTs): GVW from 3,968 to
13,228 lbs ( ≈ Class 1, 2, 3)
•Medium-duty Trucks (MDTs): GVW from 13,228 to
30,865 lbs ( ≈ Class 3, 4, 5, 6)
•Heavy-duty Trucks (HDTs): GVW is 30,865 lbs or
more ( ≈ Class 7, 8)
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Truck Market by Weight Class
Truck Market by Weight Class
Clearly, LDTs have shown the greatest sales volume
growth in absolute terms.
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Trending toward Heavier
Trucks
But, the trend is going towards HDTs. HDTs have the
highest percentage sales volume growth in the past four
years is almost 81%
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Heavy Truck Market by
End Use
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Truck Type Purpose Major service and
industry
Heavy Cargo
Truck
highway transport and
construction
coal, iron ore and other
extractive industry
Heavy Truck with
Chassis (e.g.,
Dump Truck)
manufacturing,
engineering and
machinery
heavily influenced by
investments in industrial
facilities
Semi-trailer
Tractor or Tractor highway transport
longer distance highway
transport
The Purpose and Industries Served by Different Types of HDTs
Chinese HDTs are generally classified into three end use types
Visuals into China trucks
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• Within the heavy truck market, although all HDT types have
increased in recent years, cargo trucks have jumped ahead
as the fastest growing type of HDT.
• Cargo trucks are used primarily for raw material extractions,
an activity whose demand does not fluctuate as much over
time, as does demand for heavy duty trucks serving industry
segments more dependent on fluctuating investment.
• Cargo trucks have seen a sales volume increase rate of 190%
since 2007, while heavy trucks and semi-trailers in general
have increased at a somewhat more moderate 40-60%.
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Heavy Truck Market by End
Use
Another interesting trend:
Specialty Vehicles on the rise
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The specialty vehicle
market is not large
(roughly 13% in
2010)
But specialty vehicles
captured an
increasing share of
the market in each of
the past several
years.
Specialty Vehicle
Classifications in China
Specialty vehicles range widely, but are usually defined as
tankers, hoists, cranes, street sweepers, etc.
Specialty vehicles are often medium-duty trucks.
Although generally losing market share to heavy duty
vehicles, medium duty truck market share increased in
2011 because of increased sales of MDT specialty vehicles
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Chinese HDT Production and
Export vs. Import
Year
Investment
(billions of
RMB)
Production Export
(units)
Import
(units)
2004 59,028 370,795 3,559 9,593
2005 75,095 239,197 11,510 3,770
2006 93,368 305,396 20,514 5,842
2007 117,464 484,366 55,215 8,347
2008 148,738 541,510 69,877 8,518
2009 194,139 635,739 40,930 7,367
20 Table 4: Chinese HDT Production and Export vs. Import
Key Takeaways: China’s
Truck Market
1) Opportunities in the market remain for HDTs. Although
HDTs saw a decrease in 2011, sales volume of HDTs
reached over 1 million in 2011, up 59.5% year-over-
year from 2007.
2) The HDT market may see increased demand in the
future. Government restrictions on overloading are
expected to force many fleets to move from overloaded
MDTs to HDTs that can carry heavy loads. Probably
more on this in other panels
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3) Although decreased in the last few years, specialty
vehicles are still a growing segment: MDT market share
increased in 2011 because of increased sales of MDT
specialty vehicles such as tankers, hoists, cranes and
street sweepers.
These are all important trends in China’s truck market
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Key Takeaways: China’s
Truck Market
Onto the China Bus Market
Despite a down year for
trucks in 2011, the bus
market in China still grew
by 7%
Bus sales volumes for all
reported years are larger
than the production
volumes, indicating less
risk of over-capacity, unlike
trucks.
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2011 Bus Type Sales
Volume by Length
Bus Size Sales (in
thousands)
Increase rate
from 2010 (%)
Large 73.8 7.26
Medium 69.1 18
Small 322.5 13.4
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Source: iCET, China Association of Auto Manufacturers Annual Report 2012
Percentage of New Energy
Buses in 2011
25 Source: iCET, China Association of Auto Manufacturers Annual Report 2012
Total sales of
buses
Approximate
sales of New
Energy Bus*
Approximate New
Energy Bus as % of
Total market (%)
Large 73,800 3,525 4.77
Medium 69,128 1,794 2.59
Small 322,500 189 0.05
Total 403,400 5,508 1.37
The large bus is a focus of new energy technology
deployment. NEV buses maintain the largest market
share in the large bus category.
Key Takeaways on China’s
Bus Market
1) Bus sales volume did NOT decline in 2011,
while trucks did. One possible reason is that the
bus market is less dependent on macro-economic
growth as compared to trucks.
2) Unlike the truck market, bus sales volumes for
all reported years are larger than the production
volumes, indicating capacity for more production.
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3) The large bus segment is not growing as rapidly
as smaller buses, but it is a focus of new energy
technology deployment and NEV buses maintain
the largest market share in the large bus category.
4) Lastly, large and high-end buses use the most
foreign components. This trend may not continue
in the future as China’s domestic suppliers
become more technologically advanced but this is
a current void in the China market.
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Key Takeaways on China’s
Bus Market
Chinese versus non-Chinese
Commercial Vehicles
Key differences between US and Chinese commercial
vehicles
•Chinese trucks and buses generally have much less
power, travel at lower speeds, and are designed to carry
less weight than those in the EU, Japan and US.
•This is very important when finding synergies between US
and Chinese technologies.
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Type Design
Horsepower
(hp) – China
Design
Horsepower
(hp) - US
HDT 207-433 306-592
MDT 138-217 158-286
City Bus 145 250-400
Joint Venture Bus 364
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Average Truck and Bus Power in China
Chinese versus non-Chinese
Commercial Vehicles
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Average cost of Trucks in China (unit: 10 thousand RMB)
Chinese versus non-Chinese
Commercial Vehicles
Truck and Bus Market
Forecast
We would all love to know…. But it is very difficult to
quantitatively predict the future market for advanced trucks
and buses because of a lack of data and a number of other
unknowns such as government policies, economic
conditions and infrastructure capacity.
1) In fact, the truck market forecast has often been over-
optimistic: Because of the strong and consistent growth in
the last decade, some analysts projected another strong
year for 2011. 2011 was not a growth year for trucks in
China.
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2) Furthermore, the truck market decline may last for only
one year, but may be longer because of the sluggish
economy worldwide. 2012 is an unknown.
But still there has been a general pattern of growth in
China’s truck market history, marked by an occasional
decline every few years that has historically still recovered.
Not all good news so far…
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Truck and Bus Market
Forecast
A recap of good news…
3) HDT segment likely to grow: Despite the challenges
faced in 2011, the HDT segment is likely to keep growing.
This is particularly true for the heavy-duty cargo truck
market, which is the fastest growing HDT truck end use.
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Truck and Bus Market
Forecast
4) Specialty vehicles are still a growing segment: MDT
market share increased in 2011 because of increased
sales of MDT specialty vehicles such as tankers, hoists,
cranes and street sweepers.
5) So if we look into 2015 and beyond, MDT and HDT sales
are expected to continue to increase. One analyst forecasts
that sales will increase by about 5% between now and
2017 (Frost and Sullivan, Business Monitor International).
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Truck and Bus Market
Forecast
6) The bus market continues to grow in 2011 at about the
same pace of about 5-7% per year.
Emphasis: It is very difficult to quantitatively predict
the market for trucks and buses, especially advanced
trucks and buses, in China. There are many different
factors and unknown circumstances. iCET would urge
companies to exercise caution when hearing about certain
market projections.
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Truck and Bus Market
Forecast
Possible Market Drivers
Pointing to Continued Growth
Despite the uncertainty in numbers, there are overall
positive market drivers.
•Road-based transport accounts for about 70% of
transported goods by weight.
•Freight transport by rail has been declining dramatically.
Rail accounted for as much as 70% of total freight traffic
but by 2010 it had dropped to less than 40% (KPMG)
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• Highway cargo volume increased steadily at an average
annual increase rate of more than 15% per year.
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Possible Market Drivers
Pointing to Continued Growth
• Increasing or sustained investment and support for
infrastructure, construction and logistics signals an
intention to continue expanding the use of on-road
vehicles for goods movement and transportation.
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Possible Market Drivers
Pointing to Continued Growth
Many other market drivers
• Policies and tax incentives for NEVs such as the 12th
Five Year Plan and local pilot projects will increase
investment in the entire NEV industry and surrounding
infrastructure, driving market demand in the future,
especially for bus fleets.
• Regulations on “overloading” are increasing the demand
for HDTs,
• Fuel consumption standards for trucks are likely
tightening soon, but are being delayed until 2013 due to
various lobbying efforts.
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Where are new energy
vehicles going?
• This is a huge and unpredictable question
• The price of fuel is expected to continue to increase,
driving the move towards NEVs.
• Some forecasts believe EV adoption in buses is likely to
increase, albeit slowly depending on infrastructure
development
This question will be tackled by many of the other
panels.
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So, what do we do?
• With all this unpredictability in the market forecast, what
can we do?
• Besides tapping into the opportunities such as HDTs and
large buses, we can help stir up demand in the market.
• This is why we are invested in the US China Clean Truck
Summit, gathering all stakeholders because we know
that it is possible to play a part in influencing the future
market through promoting policies, educating the public,
spreading game-changing technologies, and increasing
successful partnerships 41
You can help shape the
China truck and bus market
• As we participate in the summit, let us realize that the
market for clean trucks and buses in both US and China
is built between governments and policies, but also
promoted when we create more and more success
stories in the private sector, people like you and me, and
show others our solutions and technologies, and when
combined together can become game changers.
• Together, we are not only shaped and restricted by the
China truck market, but we can help shape the China
truck market
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