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China’s commercial vehicle market is poised for continued growth throughout 2024-2030, driven by several factors. The strong Chinese economy, with its emphasis on infrastructure development, fuels the demand for trucks and construction vehicles.
E-commerce is another key driver. The booming online retail sector translates to a surge in demand for delivery vehicles of all sizes, from light vans to heavy-duty trucks.
On the flip side, stricter emission regulations are pushing the industry towards cleaner technologies. This presents a significant opportunity for electric and alternative fuel commercial vehicles.
While diesel currently dominates the bus market, expect a rise in electric and hybrid options. Government incentives and growing environmental concerns will push this shift.
Looking at segments, the light truck market is expected to witness the fastest growth due to e-commerce. Here, manufacturers compete fiercely on fuel efficiency and payload capacity.
The heavy-duty truck segment holds its oeight as well. Infrastructure projects and overall industrial activity will keep demand for these workhorses high.
Bus sales might see a slower growth trajectory compared to trucks. However, a focus on urban renewal and public transport could lead to a rise in new bus purchases.
Technology is another area to watch. The potential integration of autonomous driving technology in commercial vehicles could rrevolutionizelogistics and transportation in China.
Chinese manufacturers are not just catering to domestic needs. They are setting up plants overseas, particularly in Latin America, to tap into new markets and reduce export costs.
Overall, the Chinese commercial vehicle market presents a promising picture for the coming decade. Fueled by economic growth, e-commerce, and a growing focus on clean technologies, this market is expected to see significant expansion and innovation.
A Chinese commercial vehicle is any motor vehicle designed and used primarily for transporting goods or passengers for profit or commercial purposes within China. These vehicles are essential for various industries, including logistics, construction, public transportation, and agriculture, facilitating the movement of goods and people across the country’s vast and rapidly growing economy.
There are several types of commercial vehicles commonly seen in China, including trucks (light, medium, and heavy-duty), buses, vans, and specialized vehicles such as dump trucks, tankers, and refrigerated trucks. Each type serves specific purposes, with trucks being the backbone of freight transportation and buses catering to public transit needs.
The benefits of China’s commercial vehicle sector are substantial. These vehicles play a crucial role in driving economic activity by enabling efficient movement of goods and people, thereby supporting businesses and industries across various sectors. Additionally, modern commercial vehicles equipped with advanced technology offer benefits such as improved fuel efficiency, enhanced safety features, and reduced environmental impact through the adoption of electric or alternative fuel vehicles.
However, along with the benefits, there are also inherent risks and challenges associated with the Chinese commercial vehicle industry. Economic fluctuations, changes in government regulations, and geopolitical tensions can impact demand and disrupt supply chains, affecting manufacturers, fleet operators, and related businesses. Moreover, the rapid pace of technological innovation introduces risks such as cybersecurity threats and compatibility issues with existing infrastructure and regulations.
Challenges in the China commercial vehicle market also include addressing environmental concerns such as air pollution and carbon emissions, as the transportation sector is a significant contributor to these issues. Achieving sustainability goals requires investments in cleaner technologies, infrastructure development, and regulatory measures, which can pose financial and logistical challenges for industry stakeholders.
Overall, while the Chinese commercial vehicle industry offers significant opportunities for economic growth and technological advancement, navigating the associated risks and challenges requires strategic planning, innovation, and collaboration among government, industry players, and other stakeholders to ensure sustainable and resilient development.
In 2020, CV sales in China recorded the biggest jump in the last 10 years with an 18% increase Y-o-Y to 5.1M units. It was the first time the annual CV sales in China crossed 5M units. The CAGR of CV sales in China for the last 5 years (2015-2020) is ~8.1%.
China’s Commercial Vehicle Market is estimated at $XX Billion in 2023. It is estimated to grow at XX% CAGR in the period 2024-2030.
Electric commercial vehicles are poised for rapid growth in the China market, driven by government incentives, environmental regulations, and advancements in battery technology, paving the way for a significant shift towards eco-friendly transportation solutions.
The rise of autonomous driving features and connectivity solutions is transforming the commercial vehicle sector in China, enhancing efficiency, safety, and fleet management capabilities, while also fostering innovation and competition among manufacturers.
Last-mile delivery solutions are gaining prominence in response to the booming e-commerce sector in China, fueling demand for light commercial vehicles and electric vans equipped with advanced logistics technologies to meet evolving consumer needs.
Shared mobility services like ride-hailing and micro-mobility are reshaping the commercial vehicle landscape, leading to increased demand for specialized vehicles tailored for shared transportation, and presenting opportunities for market diversification and product innovation.
Infrastructure development initiatives like the Belt and Road project are driving demand for heavy-duty trucks and construction vehicles in China, as the country expands its transportation networks and invests in regional connectivity.
Hydrogen fuel cell technology is emerging as a promising alternative to traditional fossil fuels in China’s commercial vehicle market, supported by government subsidies and investments in hydrogen infrastructure, aiming to reduce carbon emissions and dependency on imported oil.
Digitalization and data-driven solutions are revolutionizing fleet management practices in China, enabling real-time monitoring, predictive maintenance, and optimization of vehicle performance, contributing to operational efficiency and cost savings.
Collaborations between traditional automakers and technology firms are becoming increasingly common in China, leading to the development of next-generation commercial vehicles equipped with advanced features such as artificial intelligence and connectivity.
Environmental sustainability is a key focus for China’s commercial vehicle market, with manufacturers investing in research and development of cleaner propulsion technologies, including electric, hybrid, and hydrogen-powered vehicles, to meet stringent emission standards and consumer preferences.
Overall, the Chinese commercial vehicle market is witnessing a dynamic shift towards electrification, automation, and digitalization, driven by government policies, technological advancements, and changing consumer behaviors, presenting both challenges and opportunities for industry stakeholders to adapt and thrive in the evolving landscape.
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In 2020, truck sales witnessed a steep rise of ~22% Y-o-Y, primarily attributed to Heavy Duty Truck Sales which grew by 38% last year. Truck sales in China are growing at a much faster rate compared to commercial car sales in China.
The below chart shows the volume split of different types of China Commercial Vehicle Market
Trucks accounted for ~91% of the overall CV sales in China i.e., ~4.7M units. Light Trucks alone accounted for ~42% of the overall volume, followed by heavy-duty trucks with ~32%. Buses in China accounted for only about 9%. Out of 437K buses sold in 2020, light buses had the majority share with ~76%.
Foton was the market leader in trucks market in China with approximately 13.5% market share followed by Dongfeng with ~13%. In the bus market, the top 10 players accounted for ~82% of the overall sales, with JMC acquiring the top spot with ~21%. SAIC Maxus and BAIC Foton were positioned at 2nd and 3rd place with 13.6% and 9.7% market share.
In 2020, the export of buses from China fell by almost 35% and the volumes were around 41,400. The total export volume accounted for 9.40% of China’s total sales volume of buses & coaches. The export of mid-sized buses was the segment that was hit severely as the exports fell by almost 50% in this segment.
In the buses segment, diesel-powered buses occupied the lion’s share in the market with over XX% share. GGasoline-poweredbuses were about 19%, followed by electric buses at XX%. Natural gas-powered buses and plug-in hybrid buses had a comparatively low share cumulatively accounting for just 1.5%. In 2020, about 960 Fuel cell buses were sold across the country.
In the buses segment, diesel-powered buses occupied the lion’s share in the market with over XX% share. Gasoline-powered buses were about 19%, followed by electric buses XX%.
The bus market (ICE+ Electric) in China is estimated at $10 Billion per annum. China’s autonomous driving bus route length will reach ~300 km by 2022 making it the longest bus route of its kind in the world. Pioneers in the autonomous bus driving market Ankai autonomous buses have already been put into service in Shenzhen, Wuhan, Tianjin, Hefei, Macau, and Zhangjiajie.
Chinese new energy bus manufacturers are continuously trying to reduce the weight of the buses to enhance the efficiency of the vehicle.
Foton AUV has achieved a significant breakthrough in reducing the weight of its new electric bus BJ6123 city bus which has an aluminium monocoque body structure. Foton has been able to reduce the weight up to 1,000kg ahus increasing the efficiency by 6-9%.
Regional governments in China are shifting their public transport to electrified vehicles thereby driving this segment across the country which is the growth driver. This will see an increase till a substantial portion of the fleet is electric which will be coupled with infrastructure development. The number of fuel cell vehicles in China is expected to reach one million units between 2030 and 2035.
In 2020, the combined sales volume of the top ten players in the commercial vehicle accounted for 79.8% of the industry’s total. The top 5 manufacturers accounted for almost 54% of the overall volume. China’s bus market has 25 players in total, accounting for 0.5 million units in 2020.
In the truck market ,there are about 15-16 major players. The top 10 players account for ~80% of the market. The top 3 players in the truck market were Foton, Dongfeng, and Sinotruck accounting for 35.4% of the overall market in 2020.
