Buoyed by nearly $1.3 trillion of stimulus money, the Chinese economy is starting to recover, and recover quickly, from the global recession. GDP for the country jumped 7.9% year over year, far outpacing what analysts expected.
And truck sales are along for the ride. A new report by ACT Research in combination with China’s State Information Center indicates second quarter medium- and heavy-duty truck sales climbing 67% in 2009 over the second quarter of 2008.
“A lot of it had to do with China having a massive stimulus program, much like ours, but much larger,” said Ken Vieth Jr., ACT partner and senior analyst. Vieth added that the dump truck market is doing particularly well and recent reports indicate a rise in retail sales in China as well.
In the second quarter of 2008, China implemented more stringent emissions requirements, spurring a pre-buy in the first half of the year, Vieth said. In the second quarter of 2008, China saw sales of 288,100 vehicles before the economy’s troubles worsened. In the third quarter, the number dropped to 140,000 and even further to 113,000 in the fourth quarter before rebounding slightly in the first quarter of this year to 143,000.
Still, with sales of 239,000 in the second quarter, it appears the market is booming.
“China has become the colossal commercial vehicle market today,” Vieth said. “China has slowly worked its way into a 600-lb. gorilla. There used to be three 600-lb. gorillas, North America, Europe and Japan. Now China is bigger than them all.”
The report does suggest that sales have not fully rebounded due in part to slow export business.
“Policy makers in China have used significant capital infusions for infrastructure investment to spur economic growth despite the declines in export business,” Vieth said. “With exports expected to turn upward in the fourth quarter, we project the CV market to see steady growth over the five-year forecast horizon.”
The report, “China Commercial Vehicle Demand Outlook,” is published quarterly. For a full report, contact ACT at www.actresearch.net.