China's Heavy-duty Truck Exports Welcome Breakthrough Opportunities! Which Regional Markets Will Be Targeted?

In today's era of increasingly close global trade, China's heavy-duty truck industry is standing at the threshold of a new development opportunity

01 Domestic heavy-duty truck exports welcome golden development period, new markets are brewing

Since 2021, China's heavy truck export business has skyrocketed. According to data from the China Association of Automobile Manufacturers, our heavy truck exports from 2021 to 2023 were 114000, 174000, and 276000 respectively. Over the past three years, the cumulative increase has been 215000 vehicles, with a staggering compound annual growth rate of 65.4%!

The export has made a significant contribution to the overall sales growth of heavy trucks in China. Taking 2023 as an example, our export and wholesale volume of heavy trucks will be 276000 and 635000 respectively, representing a year-on-year increase of 58.6% and 27.6%. The growth of exports directly drives the overall sales increase. Specifically, the wholesale sales of heavy trucks increased by 239000 units in 2023, with domestic sales growing by 137000 units and exports growing by 102000 units.

North American market: The scale is stable at around 300000 vehicles, and the demand for scrapping and renewal is also the main focus. The market here has been monopolized by four major European and American brands, Daimler, Parker, Volvo, and Navistar. Chinese brands also sell less than 1000 vehicles here, making it difficult to break through the North American market.

From the perspective of export regions, the CIS, Africa, and Southeast Asia are our main markets. In 2023, our heavy truck export volume reached 297000 units, with sales from the Commonwealth of Independent States, Africa, and Asia accounting for 45.7%, 21.6%, and 14.4%, respectively. Especially in Russia, as the main market of the CIS, the export volume reached 113000 vehicles in 2023, accounting for 83% of the CIS sales.

If we look at the growth rate, the performance of the CIS and Middle East markets is particularly outstanding. In 2023, the export sales of these two regions increased by 245% and 159% year-on-year, with compound annual growth rates reaching 149% and 120% respectively.

Finally, when it comes to the country flow of exports, Russia is undoubtedly our most important export destination. Starting from 2022, Russia has become the largest market for our heavy-duty truck exports, accounting for 18.4% and 37.9% of the total export volume in 2022 and 2023, respectively.

As for the export growth in 2023, the CIS market is the biggest driving force. In 2023, our heavy truck exports increased by 132000 units, with the CIS, Africa, and Middle East markets contributing 96000, 14000, and 14000 units respectively, accounting for 94% of the increase. Especially the Commonwealth of Independent States contributed 72% of the increase. Although the Asian market is large in scale, its growth is relatively stable.

Overall, in the past three years, the Commonwealth of Independent States, Africa, and Asia have been the top three markets for the growth of our heavy-duty truck exports, contributing 56%, 12%, and 11% of the increase, respectively.

02 Overseas is expected to create a new Chinese heavy-duty truck market

From the perspective of the overseas heavy-duty truck market, the total scale of the overseas market is currently about 1.54 million heavy-duty trucks, and the market that our Chinese brand can reach is about 560000 vehicles. Assuming the market size remains unchanged and our market share increases in the next 3 to 5 years, we expect the export volume to reach 400000 vehicles. According to the data from the China Association of Automobile Manufacturers, our heavy-duty truck export volume in 2023 is 276000 units, which means that there is still 45.7% growth potential for domestic heavy-duty truck exports in the coming years.

From the perspective of output value, the total output value of the global heavy-duty truck market is 1.58 trillion yuan, of which the overseas market accounts for 1.26 trillion yuan. Excluding the markets of Europe, America, Japan, South Korea, and South Asia, the overseas market output value that can be reached is approximately 0.41 trillion yuan.

Next, let's take a closer look at the specific situation in each region:

European market: The market size is between 300000 and 350000 vehicles, mainly driven by the demand for scrapping and renewal. European brands occupy 95% of the market share here, and the market structure is quite stable. In 2023, the sales of domestic heavy-duty truck brands exported to Europe will still be less than 1000 units, making it quite difficult to make a breakthrough here.

CIS market: The market size is between 150000 and 200000 vehicles, and data shows a trend of expansion. Nowadays, Chinese brands have taken a dominant position here and are gradually replacing local and European brands. According to authoritative data, the market share of Chinese brands has reached 62.6% in the first quarter of 2024.

Asian market: The East Asian market has a scale of about 110000 vehicles, mainly consisting of Japanese and Korean brands. The Southeast Asian market has a scale of about 90000 to 100000 vehicles, and Chinese brands are most likely to achieve sustained breakthroughs here. By 2023, 43000 heavy trucks have been exported domestically.

Latin American market: The market size is over 140000 vehicles, mainly dominated by European and American brands. Although Chinese brands continue to increase their market share in non Brazilian markets such as Mexico, they are still monopolized by European and American brands in large markets like Brazil.

Overall, although Chinese heavy-duty truck brands face fierce competition and breakthrough difficulties in some regions, they have good growth potential and market share globally, especially in the CIS and Southeast Asian markets.

03 Who is the biggest beneficiary of the wave of heavy truck exports?

Since China's heavy truck exports have grown rapidly in recent years and the export situation is quite good, which companies are the biggest beneficiaries?

From the perspective of competitive landscape, the domestic export market share is relatively concentrated. Among them, China National Heavy Duty Truck Group is at the forefront of heavy truck exports.

According to data from the China Association of Automobile Manufacturers, from 2022 to 2023, 210000 and 276000 domestic heavy-duty trucks were exported respectively. Among these export volumes,Sinotruk Group and the other four major enterprises Shcaman Heavy Duty Truck Group/FAW Jiefang/Dongfeng Motor Corporation/Beiqi Foton together account for 94.0% and 93.6% of the market share, respectively. Especially China National Heavy Duty Truck Group, with a market share of 43.7% in heavy truck exports in 2023, far ahead of other car companies.

Specifically in terms of export advantages,Sinotruk Group (Sinotruk) stands out in terms of vehicle exports. In 2023, domestic heavy-duty truck exports reached 75000 units, of which China National Heavy Duty Truck Group accounted for 59000 units, with a market share of 78.9%, firmly ranking first in the industry.

In addition, Sinotruk Group has a high market share in the export of semi-trailer tractors, with 59000 units exported, accounting for 43.5%.

However, in the export of heavy-duty truck chassis,Shcaman Heavy Duty Truck Group exported 34000 vehicles, with a market share of 52.5%.

In the future, the market share of Chinese heavy-duty truck exports overseas may further expand, accelerating the opening of a new round of growth space for performance growth.