Soochow: Heavy truck exports maintained high growth in September; bullish on the sector's full-year performance driven by National IV policy stimulus.

Soochow released a research report stating that heavy truck exports maintained high year-on-year growth in September, while wholesale and terminal sales declined year-on-year. According to the firm's estimates, the industry's total inventory coefficient in September was 1.6, at a reasonable level. The firm expects heavy truck wholesale sales of approximately 1.253 million units in 2026, up 9.5% year-on-year. It is bullish on the sector's full-year performance driven by National IV policy stimulus. Soochow's main views are as follows: Industry Total Exports maintained high year-on-year growth in September, while wholesale and terminal sales declined year-on-year. 1) Production: September heavy truck production was 98,000 units, -3.2% year-on-year and +13.3% month-on-month; 2) Wholesale: September heavy truck wholesale sales were 99,000 units, -6.5% year-on-year and +14.7% month-on-month, slightly below expectations; 3) Insurance registrations: September heavy truck terminal sales were 66,000 units, -21.1% year-on-year and +16.4% month-on-month, slightly below expectations. The year-on-year decline was mainly due to the dual factors of weakening effects of the trade-in policy and demand being pulled forward by the heavy truck AEBS regulation switch in mid-July; the month-on-month increase was mainly due to July and August being the off-season for heavy truck sales; 4) Exports: September heavy truck export sales were 41,000 units, +29.4% year-on-year and +7.0% month-on-month, basically in line with expectations, with exports to Africa continuing to improve and export growth in Southeast Asia recovering somewhat; 5) Inventory: September industry-wide inventory was -8,300 units, of which corporate inventory was -700 units and channel inventory was -7,600 units. According to the firm's estimates, the industry's total inventory coefficient in September was 1.6, at a reasonable level. Industry Structure By application, construction vehicles outperformed logistics vehicles year-on-year in September but underperformed month-on-month. September construction vehicle terminal sales were 8,500 units, -1.7% year-on-year and +3.7% month-on-month; logistics vehicle sales were 57,100 units, -23.4% year-on-year and +18.5% month-on-month. In September, construction vehicles/logistics vehicles accounted for 13.0%/87.0% respectively, with the construction vehicle share +2.6/-1.6 pct year-on-year/month-on-month. In terms of natural gas heavy trucks, September natural gas heavy truck sales were 7,300 units, -69.0% year-on-year and +13.0% month-on-month; the natural gas heavy truck penetration rate was 11.1%, -17.12/-0.33 pct year-on-year/month-on-month. In September, the natural gas heavy truck penetration rate among tractors was 17.78%, -27.44/-1.42 pct year-on-year/month-on-month. Sinotruk's leading advantage remains stable. Complete Vehicle Landscape 1) Terminal: In September 2026, the domestic terminal sales market shares of FAW Jiefang/Dongfeng/Sinotruk/Shacman/Foton were 19.7%/15.0%/18.2%/8.4%/12.8% respectively, -1.0/-4.9/+1.1/-2.9/+0.3 pct versus full-year 2025, and +1.3/-0.7/-1.5/+0.1/-0.8 pct month-on-month versus August. 2) Exports: In September 2026, the export market shares of FAW Jiefang/Dongfeng/Sinotruk/Shacman/Foton were 20.0%/6.2%/47.6%/15.7%/6.4% respectively, +2.3/-2.5/+2.6/-1.2/-1.4 pct versus full-year 2025, and +3.5/+1.3/-3.7/+0.6/-1.4 pct month-on-month versus August. Sinotruk's leading advantage remains stable core view. September landscape: Xichai/Sinotruk led in share, Weichai's share declined year-on-year. Engine Landscape Xichai/Sinotruk led in share, Weichai's share declined year-on-year. 1) Overall: On a terminal basis, in September the market shares of Weichai/Cummins/Xichai/Sinotruk/Yuchai were 12.6%/12.9%/15.1%/13.8%/8.4% respectively, -6.6/+3.7/+0.6/+4.6/-4.3 pct versus full-year 2025, and +1.0/-1.9/+1.6/-1.1/-0.5 pct month-on-month versus August; 2) Weichai: September Weichai terminal supporting volume was 8,300 units, -48.8% year-on-year and +26.3% month-on-month. The significant year-on-year decline was mainly due to the continued decline in natural gas heavy truck penetration and rising new energy penetration. By OEM, in September Weichai's supporting rates at Shacman/Sinotruk/FAW Jiefang were 59.8%/23.5%/12.1% respectively, +11.2/+0.2/+0.7 pct month-on-month versus August, and +5.9/-21.0/-8.6 pct versus full-year 2025. By fuel type, in September Weichai's diesel/natural gas engine market shares were 11.10%/56.48% respectively, +2.36/+4.72 pct versus full-year 2025, and +0.62/+6.49 pct month-on-month versus August. Risk warning: Recovery of the domestic heavy truck industry falls short of expectations; natural gas prices rise more than expected.