Sales of School Bus Slows Down in the Second Half of 2013

www.chinaspv.com:Since 2012, bus has kept thriving at a good growth rate within this sustained downturn of commercial vehicle industry. According to the latest data released by CAAM, bus continues production and sale growth rate exceeding the industry in the first half of 2013. However, based on careful analysis on market segments, the bus will be severe in the second half of 2013 unless there is favorable promotion.

Remain strong in the first half

Based on data released in July 10th by CAAM, in the first half, automobile production and sales in China both exceed 10 million vehicles at a growth rate of over 10%.

Production and sale of commercial vehicle recovers in the first half from the depressed state for previous two years. The production and sales are respectively 2.0872 million vehicles and 2.1171 million vehicles, increasing 8.2% and 6.7% respectively. The growth year on year of 2012 keeps negative. In 2013, production and sale year on year increase 14.8% and 14.9% respectively. Furthermore, incomplete vehicle of bus also increases at a certain rate.

The three largest market segments acting as main reason of bus increase in the first half are public transit bus, school bus and export. Mr. Hu, one official of Higer, said that their public transit market especially their new-energy bus was of good market performance in the first six months. Meng Zhenhai, deputy general manager of Changan Bus, as well said that their public transit bus sales increased almost 31% in the first half.

The data shows that accumulative sales volume of school bus in the first five months of 2013 is 11,908 with a year-on-year increase of 18.8%. In accordance with customs data collected by CAAM, from Jan. to May, exporting volume of bus is 61,800, increasing 48.1% compared with the same period of last year. It’s high above 11.1%, the exporting growth of vehicle.

In the first five months of 2013, sales volume of new-energy bus including hybrid and electric bus is 3,138, which increases 53.22% year on year.

School bus slackens, and new-energy market is of sudden change

Despite the year-on-year growth of 18.8%, the school bus market in the first half seems more reasonable. Some official of Zhongtong Bus sales company said, “Since the first half is the slack season, there is no denying that the sales volume does not increase at a huge rate. However, school bus market indeed shows some indication of slowing down. National standard for school bus becomes stricter, which will increase manufacturing cost and price increase, and slows down the market acceptance. Furthermore, due to emerging social hotspots, attention of both society and government to school bus reduces. Thus, school bus is not the first problem to be resolved any more.” School bus increase will slow down further unless new good policy comes out.

Additionally, at the end of May, it is released by government departments that promotional subsidy for hybrid bus in non-demonstration cities will be terminated. As the main force of new-energy sales, this change to hybrid bus causes a storm in new-energy bus market since June. Salesman of Yutong new-energy vehicles said, “After the subsidy is terminated in the June, we haven’t received any orders of new-energy vehicles.” Li Dusheng, director of Zhongtong Bus Brand Culture Department, also said that Zhongtong still got no orders of new-energy bus since the subsidy was terminated.

Due to the lack of powerful motivating policy after terminating relative subsidy, new-energy bus market is now facing the challenges.

Public Transit and export hold hardly up the whole market

On account of the trend in the second half, public transit and export are expected to be the two market segments which likely hold the market. These two market segments are still in certain pressure.

Increase of public transit market benefits from urbanization, integration of urban and rural passenger transport, and good policy including rapid development of public transit and dealing with pollution. Its subsidy and policy preferences are far beyond other bus market segment. Mr. Hu said that public transit market especially new-energy bus in the first half was of good performance and conventional public transit market was on the usual increase. Therefore, every side of public transit is basically good. Lin Xi (alias), the official of Changan bus marketing department, also said that bus of 6 to 10.5 meters was of good increase.

Meanwhile, the economic background is the unavoidable adverse factor of public transit market. Public transit industry banks much on government finance especially local finance. Since 2013, various local finances in China is under huge pressure. Owing to slowing down of economic increase, growth of public transit market must be influenced. Lin Xi said, “At present, demanding for bus would slow down instead of increasing, but at a steady growth rate of 25%.”

Exporting growth of 48.1% of bus in the first half is pretty impressive, which often appears in the downturn of domestic market. Simultaneously, there are no striking negative factors for exporting market in the second half so far. Nevertheless, some analysis points out that downturn of international market together with appreciation of RMB influenced our automobile export a lot.

As for the bus market in the second half, new-energy bus is the most unpredictable, which depends on timely supporting policy by governments and slowing down of school bus. What’s more, how the National IV emission policy would be implemented would influence every market segment of bus.
 

China Special Vehicle Adivsor

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