The China Association of Automobile Manufacturers recently announced the sales of heavy trucks in the first three quarters of this year. In September 2022, my country sold 52,000 heavy trucks, and from January to September this year, a total of 523,000 were sold. Sinotruk's heavy-duty truck market share continued to lead, with sales of 13,000 heavy-duty trucks in September and a cumulative sale of 126,000 in the first three quarters, with a market share of 24%, continuing to lead the industry.

Sinotruk's dominant position continues to stabilize

From the September data, Sinotruk continued to maintain its leading edge in the competition pattern of the domestic heavy truck market. Data shows that in the third quarter of 2022, Sinotruk's sales exceeded 10,000 for three consecutive months, and this year for the first time in three consecutive months, it won the monthly sales champion, and its dominant position is more stable. In the first three quarters of this year, Sinotruk sold 126,000 heavy trucks, with a cumulative market share of 24%, ranking first in the industry.

At the end of August, Sinotruk (3808.HK) announced its results for the first half of the year, achieving an operating income of 29.03 billion yuan and a net profit attributable to the parent of 1.28 billion yuan. Against the background of the overall downturn in the industry, the company achieved a contrarian move, and achieved "double first" sales and market share of heavy trucks for the first time in the past ten years, reflecting the company's development resilience. At the same time, the company's average bicycle price and operating profit have rebounded significantly.

Sinotruk also has optimistic expectations for the future development of the market. The company said in the semi-annual report that with the stabilization of the economic situation to the good, freight demand steady growth; infrastructure investment advanced release, water conservancy projects and transportation infrastructure investment accelerated landing, will drive the medium and long-distance bulk raw material transportation market demand, stimulate the demand for engineering heavy trucks. 

The decline in heavy truck sales narrowed, and road freight support policies were frequently issued

From the perspective of the overall situation of the industry, in September this year, although the domestic heavy truck sales data did not stop the pace of year-on-year decline, but in August and September, the heavy truck sales have achieved a month-on-month growth for two consecutive months, with the month-on-month growth rate of 2% and 12.1% respectively.

In addition, the year-on-year decline in heavy truck sales in the past two months has narrowed significantly compared with the first half of the year. In the first nine months of this year, the decline was the highest at 77.3% in April. The decline has narrowed to 10% and 12.5% in August and September. Industry insiders said that the recent year-on-year decline in heavy truck sales has narrowed. On the one hand, the sales volume in the same period last year was relatively low, and on the other hand, the dealers' inventory was further digested after a few months, showing signs of sales recovery in the market. With the effective implementation of the favorable policies for road freight recently introduced by the state, the sales volume of heavy trucks is expected to continue to improve in the fourth quarter.

On September 28, the Ministry of Transport and the Ministry of Finance issued a document, requiring the fourth quarter of this year, on the basis of the implementation of the existing tolls of trucks. To reduce the burden of highway transportation practitioners and optimize the logistics business environment is obvious. On September 29, the Ministry of Transport and the National Development and Reform Commission jointly issued a notice on the phased reduction of cargo port charges, requiring a government-set 20 percent reduction in the fourth quarter of this year, which may boost the commercial vehicle market in the fourth quarter of this year.

At the same time, local governments have intensively introduced support policies for the road freight industry. For example, Hubei Province recently issued the "Implementation Plan for Rewards and Subsidy Policies to Support the Development of the Road Freight Transport Industry", giving a maximum reward of 1 million yuan to the top enterprises in the province in terms of road freight turnover. Chengdu City recently issued the "Ten Measures to Support the Development of the Road Freight Industry", providing cash rewards to eligible freight logistics companies and introducing measures to reduce the fuel cost of trucks.

In addition, the national economic growth policy is expected to drive the recovery of infrastructure and logistics and promote the recovery of the heavy truck industry. CITIC Securities said that in the context of the downward pressure on domestic macroeconomic growth, the central and local governments at all levels have issued a number of policies to stabilize growth. These policies will have a positive impact on the demand for heavy trucks by stimulating infrastructure and logistics.