Feature Summary of School Bus Market in the First Half of 2013

Date:2013-07-26 Source:www.chinaspv.com

Month	January	February	March	April	May	June
Year-on year growth %	-12.0%	-25.19%	-15.0%	10.82%	18.8%	16.7%

 

1. Reason analysis of negative growth in the first three months. Big decline of school bus sales volume from Jan. to Mar. of 2013 is unexpected due to the high expectation of school bus market performance. However, market is ruthless as well as cruel. As far as I’m concerned, the main reasons are as followed:

A. On account that the first three months of 2013 is the alternate period of old and new standards with huge variation, local governments differs from each other in the implementation of school bus policy. Thus, progress of school bus markets in different places varies from each other. Based on market research, demanding for school bus in economically undeveloped places but with relative large number of students such as Guangxi and Hunan must be boosting. Furthermore, the investment and focus of school bus market was less in the previous periods which acts as the motivating factor of the boosting demanding. However, governments of economically developed places such as Jiangsu, Zhejiang and Shanghai proceeded to invest and purchase school buses. As a result, school bus markets there are relatively saturated. That’s why school bus markets in Guangxi and Hunan appeared to be boosting in the first quarter of 2013. Nevertheless, school bus markets in economically developed regions are a bit of slack season.

B. One reason is the Spring Festival. Seasonal feature of school bus purchasing is obvious. The Spring Festival of 2013 falls on the beginning of February. In the late January, most of the schools started to be in winter holidays, which is not the period of new semesters. Therefore, schools usually do not prefer to purchase school buses at this time. That’s the seasonal law of school bus purchasing.

C. All the new governments of different places began their transition in March of 2013. Since school bus purchasing is a measure of public welfare and livelihood to a large extent, governments have to offer financial subsidy to this purchasing. During the transition time of governments, school bus purchasing is usually faced with financial reusing problems. Simultaneously, schools always look forward to financial subsidy from governments. Hence, schools prefer to wait until getting more support from new governments.

D. More enterprises enter school bus market, which will lead a severe competition. In the beginning of 2012, there were less than 20 bus enterprises into school bus market, which increases to over 30 in this year. The scale of school bus market remains the same even with more competitors. In the first three month of 2013, the market contracted. As a consequence, it will get more competitive as well as the monopoly will get reduced.

E. Despite that the sales volume of 2012 in the school bus market is almost 30,000, operational mode of school buses in various places varies, including deficit, benefit or even condition. School bus is operated by government, individuals or the third party, which can lead the irregular market and waste of resource. Thus, sales of school bus in the first two months are influenced.

F. Since the end of 2012, school bus has become the main factor of bus market increase. Based on the date of sales, bus sales have remained the same for several months with contracting growth and demanding. Though lots of people stand for the increase of school bus, many experts say that the school bus market is not that positive which in turn influences the expectation of school bus buyers.

G. With low entering requirements of school bus market and huge following investment, investment risk of school bus will increase. Experts say that if we insist the development path at present, 80% of enterprises will compete with each other for 20% of the market share. So, how can the monopoly avoid reduction?

H. Since 2013, central government launched Eight Rules, especially restricting vehicle purchasing with public funds. Due to the situation of depending on government subsidy purchasing school buses, school bus market in the first quarter of 2013 gets influenced to some degree.

2. Reason analysis of consecutive positive growth of April and May

A. It is a result of short holidays of Labor Day and Dragon Boat Festival. According to market research, many schools usually organize students and faculty for an outing using their own school buses, which is convenient and can save expensive rent of the vehicle. Thus, many schools will purchase school buses in April which can boost the sales of April (its growth is nearly 40% year on year).

B. Purchasing sum of money. Lots of school buses are purchased by govern\[t fi nance. Applying funds of government in 2013 need to be approved after NPC & CPPCC in locals, which means the fund offered by government for purchasing school buses will be set in March. Hence, April is the suitable month for implementing purchasing, increasing sales volume of school bus in April.

C. The enticing benefit of rent market. April and May are busy season of travel and renting by groups or departments. In 2013, central government launched Eight Rules, which restrict public consumption. Some governmental departments and group rent vehicles for travel to cover themselves. And rent companies do not hold vehicles in usual and enterprise vehicles are busy. Since school bus is not busy unless for delivering students to school and home, renting companies rent the buses and schools can earn some rent. Hence, schools will purchase school buses for the reason mentioned above.

D. Benefit of travel market. Operational vehicles in travel companies of many regions (such as Jiangsu and Zhejiang) need to be qualified by national regulations to get the travel operation license. School buses do not have to meet the requirement of national rules of high-end buses, and purchasing of school buses does not have any limits. In the busy season, travel companies think of school buses and school also wants the rent. Thus, double-win situation is formed, which can be enticing for schools to purchase more school buses for extra benefits.

Feature Ⅱ Sales concentration of top 15 enterprises obviously increases their link relative ratio and the monopoly contracts than the same time of last year. Yutong is on the top of these top 15 enterprises. The model with highest sales is 6-7 meters. Proportion of 7-8 meters reduces the most than the same time of last year. The biggest increase of proportion appears in the 5-6 meters. And847oduct chain of school bus is obviously extended.

Based on the collective data of Chinese 50 mainstream bus enterprises, total sales volume of school buses from January to June of 2013 is 12,914 units, increasing nearly 16.7% than 11,065 of last year. Taking up 94.09% of the whole school bus market, sales volume of top 15 enterprises is 12,255 units, increasing nearly 6.37% than 88.57% of last year. All of these means the enhancing concentration of top 15 school bus enterprises in sales. Sales of top 15 enterprises are as follows:

 

 

1. School bus sales volume of over 1,000 from January to June are Yutong Bus, Changan Bus, Quick Bus, Zhongtong Bus and Dongfeng Touring Bus, in which sales of Yutong Bus is 2,677 taking up 20.7% market share. Despite of the top one within enterprises, Yutong Bus still reduces 9.75% than 30.45% of the same period of last year.

2. The sales order of top 15m enterprises in length is 6-7m (28.07%), 5-6m (21.3%), 7-8m (20.6%) and 11-12m (only 1.15%). However the minimum sales of 11-12m fill the vacancy of year-on-year condition.
3. The proportion of 7-8m reduces most compared with the same period of last year and the 5-6m increases most.

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