Interpreting heavy truck sales in February: will the market boom or decline in March, the peak season?

According to the preliminary data obtained by the First Commercial Vehicle Network, in February 2024, the sales of heavy trucks in China were around 53,000 units (including exports and new energy vehicles), a decrease of 45% compared to January 2024, and a 31% decrease compared to the same period last year, reducing by approximately 24,000 units. The sales volume of 53,000 units in February is only higher than that of February 2020 in the past eight years. From January to February 2024, the cumulative sales of various types of heavy trucks in China were approximately 150,000 units, an increase of 19% compared to the same period last year, with a net increase of 24,000 units. According to the analysis of the First Commercial Vehicle Network, the heavy truck market in February 2024 has several characteristics worth noting: firstly, due to the Chinese New Year falling in February, both terminal sales and invoiced sales were "bleak." Typically, the terminal demand during the Chinese New Year is low, as logistics companies and truck owners take a break to celebrate the holiday until around the fifteenth day of the first lunar month before returning to work and making purchasing decisions based on the supply of goods. After the fifteenth day of the lunar month this year, it was already late February, coupled with the slower resumption of manufacturing activities after the holiday and the shortage of transportation goods, leading to mediocre industry sales. Feedback from the market indicates that terminal market demand and orders have gradually recovered since the seventh day of the first lunar month, but it is not significant. It is predicted that terminal sales in February will be below 30,000 units, showing a certain decrease compared to January, possibly marking the lowest monthly sales of the year. Looking at the supply and demand situation in the transportation of goods, the logistics industry in February still faces an overall shortage of goods, which will slow down the recovery of purchasing demand in the heavy truck industry. Secondly, the inventory in the heavy truck industry continues to increase. At the beginning of 2024, various truck companies competed for sales in January, resulting in a sharp increase in sales to nearly 96,900 units, almost doubling year-on-year. However, the actual terminal sales in January were only 34,000, leading to an increase in industry inventory. In February, invoiced sales continued to be higher than actual terminal sales, further increasing industry inventory. Thirdly, overseas sales have decreased year-on-year. It is estimated that China's heavy truck exports in February 2024 will decrease by 20%. The terminal market performance in February was bleak, with invoiced sales higher than actual sales, leading to a further increase in industry inventory. The "key" to solving all problems seems to lie in March. Will the market be better in March? Will the market rise or fall during the "peak season" in March? According to the analysis of the First Commercial Vehicle Network, based on the current industry trends in March, it is inevitable that there will be a certain degree of year-on-year decline in heavy truck sales. Firstly, affected by the complex macroeconomic environment, the domestic road freight market remains sluggish. Since the beginning of 2024, issues such as a shortage of goods, excess number of trucks, surplus capacity, and low freight rates have been plaguing the logistics industry. Even with the arrival of the peak season in March, these problems are unlikely to be fundamentally resolved. Furthermore, high industry inventory will affect new car sales in March. Secondly, the sales volume in the same period last year was high, reaching its peak of 115,000 units in December 2023. This poses a significant challenge for the heavy truck market in March to achieve the same level of sales or growth. Despite the likelihood of a year-on-year decline in total sales volume in March, it is almost certain that LNG trucks will be in high demand after the Chinese New Year, with the domestic gasification rate of heavy trucks expected to quickly rise to 30-40%. The First Commercial Vehicle Network previously analyzed that the peak season after this year's Chinese New Year would be for LNG trucks, not diesel trucks. The shortage of goods, low freight rates, and excess truck capacity in the logistics industry will continue for a considerable period into 2024, coupled with the continuous decline in LNG prices since February. By the end of February, LNG prices in many regions had dropped to over 4 RMB per kilogram, a much faster decline than the same period last year. Therefore, it is almost certain that natural gas heavy trucks will widely replace diesel heavy trucks after March, as the sales volume of LNG heavy trucks was only around 10,000 units in the same period last year and is expected to double or even triple year-on-year in the peak season of 2024. The domestic gasification rate of heavy trucks will quickly rise to 30-40% or even higher.