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The distribution of China's internal combustion engine industry is roughly: commercial vehicles use diesel engines, passenger cars use gasoline engines, with few exceptions. Last year, the output of diesel passenger cars in China was 44,757 units, accounting for only 2.18 percent of diesel vehicles; and the output of gasoline commercial vehicles was 486,546 vehicles, accounting for only 19.45% of the total output of commercial vehicles.
From January to June this year, the commercial vehicle market continued its good growth last year, with a total production of 1.573 million units, a year-on-year increase of 18.48%, which is higher than the growth of passenger vehicles, while sales of commercial vehicles increased even more, reaching 21.98%. The market for diesel engines, which are the main driving force for commercial vehicles, has also risen, and some structural changes have taken place.
Policy promotes diesel engine market upgrade
In recent years, driven by the rapid economic development in China, the macro environment of commercial vehicles in China has undergone tremendous changes.
First of all, China's road construction has undergone changes that have turned upside down, and highway mileage has increased significantly. By the end of the “Eleventh Five-Year Planâ€, the mileage of highways in 2010 will reach 65,000 kilometers. The inter-city logistics vehicle environment has been fundamentally changed; the “village-village-passing†project has enabled more than 80% of rural villages in China to be covered with asphalt roads, and the rural automobile use environment has been greatly improved.
Second, China's economic growth is an important pillar of investment, of which the basic construction of the pulling role, and the basic construction has greatly increased the demand for commercial vehicles, especially the demand for high-power cars.
Once again, the introduction of relevant national policies has changed the demand structure of commercial vehicles. “Super limits†and weight-based charges have allowed the rapid development of high-power heavy-duty vehicles, including semi-trailer tractors and heavy-duty trucks. It affects the sales of commercial vehicles, the layout of enterprises, the layout of models, and the after-sales service.
The changes in the commercial vehicle market will inevitably affect the production of automotive diesel engines. Comparing the 2003 and 2007 diesel engine industries that have just taken off in China’s auto market, we can clearly see the change in the industry structure in just four years.
In a short period of four years, the top four companies in the production and sales of vehicle diesel engines have not changed. They are FAW Group, Dongfeng Motor, Yuchai Group and Kunming Yunnei; in 2003, the production and sales scale of these four companies were all over 100,000 units. 2007 Their production and sales scale was more than 200,000 units a year and they have reached a new height.
The difference is that the ranking of the top four has changed, Yuchai Group has firmly occupied the leading position, with the other three companies opened a distance, production and sales exceeded 500,000 units, become overlords, and Dongfeng Motor, FAW Group Weichai Power Co., Ltd. in Kunming and later in the cloud became the second group.
The top five companies in production and sales in 2003, the market shares of FAW Group, Dongfeng Motor, Yunnei Power (Kunming Yunnei and Chengdu Yunnei), China National Heavy Duty Truck Group and Yuchai Group were 76.4%, and the market share of these companies in 2007 78.8%, the degree of concentration in the diesel engine market has improved.
Heavy market battles
Heavy-duty diesel engines are referred to as heavy machinery (mainly referring to displacement>7L, power>175kW). Production companies include Weichai Power, Hangfa and Zhangqiu Engine Works under China National Heavy Duty Truck, Yuchai, Xichai of FAW Group, Dachai, and Dongfeng Cummins. In addition to Shangchai and Dachai, the production of heavy machine plates has grown rapidly.
Thanks to the gradual delisting of quasi-heavy trucks and the rapid development of heavy-duty heavy trucks, the Steyr Series (Winchwood, Hangfa, and Cheungqiu) products have beaten FAW Group and Dongfeng Motor's traditional heavy machine products to become the market's protagonists. From 2003 to 2007, the growth rate of this series of diesel engines was as high as 380% or more, and its market share increased significantly. In 2007, it reached more than 50%, which was significantly higher than in 2003. Weichai Power is among the top five in terms of production and sales.
The development strategy of Yuchai and Dongfeng Cummins in the heavy machine market has achieved initial success and market share has increased. However, there is still a considerable gap compared with Weichai and CNHTC.
The growth rate of Chongqing Cummins is as high as 686%, but the company’s production capacity is small and it is a small player in the market.
Shangchai's products are basically medium and heavy machines, but this listed company has performed at a mediocre level in recent years. Vehicles have not grown, but have seen negative growth. Production and sales have also dropped from 11th to 15th.
Dalberg also has some heavy machinery products, and its performance in the heavy machinery market is also unsatisfactory. At present, the heavy machinery of FAW Group is mainly produced in Xichai. After joint ventures between Dichai and Deutz, the company focused on mid-machines and light machines, and sales of heavy machinery continued to grow negatively.
Judging from the heavy machine market, mainstream heavy-duty truck companies have re-arranged and self-built engine plants have become a trend. For example: FAW Group has Xichai and Dachai, China National Heavy Duty Truck has Hangfa and Zhangqiu factories, Shaanxi Automobile has Weichai Power and Xi'an Cummins, SAIC Iveco Hongyan have SAIC Fiat Hongyan and Shangchai, GAC has GAC Hino, and North China Benz has Hebei North China Diesel Engine (Deutz).
At the same time, engine companies that are attached to OEMs are also gradually increasing their external supporting ratios. For example, the proportion of Xichai’s supply to the outside of the Group is getting higher and higher, and it is expected to reach 50%; the proportion of Hangfa’s exports is less than 30%, and the relocation has expanded. After production capacity, the proportion of foreign sales will expand accordingly; Dongfeng Cummins also sells half of its products to the Group's foreign markets. For independent engine companies, the future market situation will undoubtedly become severe.
Due to factors such as sales channels, maintenance and user awareness, there will be no major changes in the pattern of heavy machine companies in the short term. Weichai Diesel and Chongqing Heavy Industries Co., Ltd. dominate half of the market, and Yuchai, Dongfeng Cummins, and Xichai are striving to expand their market share. Share of the platform.
From the mid-to-long term perspective, with the addition of Xi'an Cummins, SAIC Fiat Red Rock and GAC Hino, the competition in the heavy machinery market has become more intense.
In the past two years, there has been no increase in the number of engine companies in the country and the number of joint venture companies has risen. However, only Cummins has stood in the footsteps of the joint venture. After years of market development, it has gradually gained market recognition.
For foreign engines to enter China, it takes five years from the start of negotiations, the signing of a cooperation agreement, the start of production to being accepted by the domestic market, and it takes about ten years from localization to the start of price reduction and improvement of after-sales service construction. The time difference left time for domestic enterprises to prepare.
Domestic companies can compete with low prices, flexible marketing, services that are close to demand, and the advantages of sales and service networks that have formed over the years, while joint ventures rely on leading technologies, long reliability and maintenance intervals, and capital advantages. competition.
Judging from the heavy machine products, the market share of low-power heavy machines continues to decline, mainly due to the expansion of the capacity of the heavy-duty truck market, the rapid adjustment of product structure, heavy-duty trucks increasingly need high-power diesel engines to match, and low-power models gradually can not meet the heavy-duty Power demand.
At present, the diesel engine with a displacement of about 8 to 9L and a power of 147 to 280kW is the main engine in the domestic heavy machinery market, such as Xichai's CA6DL; Yuchai's YC6112 and YC6L; Shangchai's D6114; Weichai and Hangfa's WD615; Dongfeng Cummins 6C and so on. These models can be matched with 10-15t heavy trucks, which better meet the requirements of the heavy trucks for power level and torque level. At the same time, they are also very suitable for the market price positioning of heavy trucks in terms of cost and sales price.
The combined effect of the two factors has promoted the rapid development of these models.
Such models will also reach the peak of consumption in the next three to five years, and will show a downward trend afterwards.
The market share is not high, but the major development trend in the future is the heavy-duty diesel engine with a power of more than 10L, especially the large-tonnage heavy-duty truck supporting model with a capacity of over 15 tons. For example, Weichai WD618 model, Hang Fat Steyr WD615, Dongfeng Cummins L series, Yuchai YC6M series and so on.
In addition, there are new markets such as Xi'an Cummins ISM11, SAIC Fiat Red Rock, GAC Hino, etc. These models will become the main models of the market in three to five years.