The recently concluded Central Economic Work Conference has brought a sense of hope to the Chinese people, as it emphasized that the government will allocate more financial resources to improve people's livelihood and promote social harmony. However, commercial vehicle manufacturers are facing a more challenging outlook. The conference highlighted the need to prevent economic growth from becoming overheated, avoid a structural rise in prices leading to inflation, and shift monetary policy from "sound" to "tight." These measures may signal a downturn for the commercial vehicle sector.
FAW Trade Corporation’s marketing department predicts a 5% to 10% decline in the total truck market next year. Wang Wenbing, deputy general manager of Yutong Bus, is also cautious about the bus industry’s growth prospects. Deng Ping, CEO of Chongqing Hengtong Bus Co., Ltd., believes that with the changing macroeconomic environment, the survival of the fittest will become more intense in the coming year.
Major players like China National Heavy Duty Truck, Dongfeng Liuzhou Automobile, and Shaanxi Zhongqi are closely analyzing the conference outcomes and preparing for potential market shifts. A similar scenario occurred two years ago, when the heavy truck market faced a sharp decline after macro-control measures were introduced. In 2004, high fixed asset investment and excessive credit expansion led to an overheated economy. By mid-2005, the government imposed strict controls, causing a drastic drop in investment and a nearly 40% decline in the truck market—the first negative growth in eight years.
Industry experts note that the medium-heavy truck market closely follows national economic trends and aligns with China’s five-year development plans. Historical data shows that every major macro-control period—such as in 1979, 1985, 1989, 1999, and 2005—has had a tightening effect on the truck market. This time, the regulatory intensity is even greater.
For the first time in a decade, China has adopted a tight monetary policy. The central bank has raised interest rates five times this year, with a sixth hike expected soon. The deposit reserve ratio was increased to 14.5%, the 10th time this year, reaching a 20-year high. Globally, such a level is rare.
Analysts at FAW Trading’s marketing department believe that while infrastructure investment remains strong and demand for large-scale projects persists, new projects under the new macroeconomic policies are likely to face reductions, significantly impacting truck demand. Additionally, tighter consumer credit policies have already affected the market. About 40–50% of truck buyers use loans, especially in regions like Tangshan, Shaanxi, and Inner Mongolia. With higher interest rates, loan approvals have become harder, and this will inevitably reduce demand, with significant consequences for the market.
Although passenger cars are less affected by falling fixed investment, Deng Ping warns that the overall tightening of capital supply will still impact the passenger car industry. He recalls that the macro-controls in 1995 and 2005 greatly influenced the sector. Many small bus companies disappeared after previous rounds of regulation, and a similar cleanup could happen again. While this is tough for smaller firms, it presents opportunities for larger ones.
Some industry insiders also believe that due to China’s large trade surplus, export policies may be adjusted next year, possibly including the removal of export tax rebates. Although Chinese commercial vehicles have competitive pricing globally, changes in export policies and faster RMB appreciation could hinder their overseas expansion.
Moreover, Deng Ping points out that this round of macro-control might negatively affect bus companies expanding their operations. Those increasing production capacity or building new factories may face severe financial pressure under the new economic policies. Some ongoing projects could be delayed or even abandoned.
Chang An Car,Intelligent Electric Chang An Car,Chang'An Cs75 Plus,Chang'An Automatic 1.5T
Xi'an Luguang Xincheng Trading Co., Ltd , https://www.lgxc-autosales.com