05-03-2007 The
following seven predictions are for the China buses market in 2007: Sales
volume of buses will continue increasing There
is still much work to be done in replacing ageing buses fleets in cities across
China. In 2007 China will roll out the State III emissions standard for its public
transportation system, which will lead to large scale buses replacements. As a
result, the sales volume of buses is expected to increase dramatically in 2007
as cities race to upgrade their ageing fleets to newer buses that meet the required
emissions level. China
buses exports expected to break new records During
January and September 2006, the number of fully-assembled buses exported from
China was 9,589 vehicles, an increase of 110% over the same period of last year.
The expected figure for total exports of China's buses in 2006 is 15,000 vehicles,
doubling the figure of 2005 and comprising 10% of the entire sales volume of buses
in 2006. At this rate of growth, exports of buses in 2007 are expected to reach
30,000 vehicles, comprising more than 20% of the entire sales volume of buses
on the Chinese market. Mid-size
buses still major focus of passenger vehicle industry Facing
intense competition from railways, mid-to short journey highway buses have became
the focus of the passenger transportation industry once again. Along with continued
highway construction and development, more and more bus routes are appearing and
driving up demand for mid-size buses. In 2006, the expected sales volume of China's
mid-size buses will reach 40,000 vehicles. Although
the above mentioned factors will play important roles in the growth rate of this
market segment in 2007, increases in sales volume of mid-size buses will not be
very dramatic since the average annual sales number of China's mid-size buses
is already quite large. In 2007 the expected sales volume of China's mid-size
buses will reach nearly 45,000 vehicles. New
chance for development of buses on rural markets There
are two reasons for the predicted increase in development of rural markets in
China for buses. First,
demand for new buses is expected to increase dramatically. On the one hand, the
construction of rural highways has developed extremely well, which increases the
development space on rural markets for buses. On the other hand, the transportation
system in rural areas has been gradually improving throughout China. The development
of an efficient transportation system in rural areas will drive up demand for
new buses. Second,
the adjustment of sales tax for mid- to light buses is helping China buses industry
regain its confidence on rural markets. The "Information on Policies for
Sales Tax" issued by the government clearly states that the Chinese government
will no longer levy sales tax on business buses with a body length of no more
than seven meters and have seats between 10 to 23. This policy is expected to
have a tremendous impact on bus sales in 2007, especially on rural markets. Jumbo-size
passenger buses will lead to adjustment of product structure With
the constant adjustment of product structure in the bus industry, an increase
in the number of jumbo-size buses is expected. Although the sales volume of jumbo-size
buses is not as large as other segments of the bus industry, these model buses
have a great deal of development space in the bus industry. New design concepts
that meet the varying needs of jumbo-size buses customers will help maintain the
sustainable development of this market segment. In 2007 the expected sales volume
of jumbo-size buses will reach more than 1,500 vehicles. State
III emissions standard will foster car industry to remove inventory The
State III emissions standard will be implemented across China on July 1, 2007.
This is also the date that manufactures must clear out all inventories of vehicles
that only meet the State II emissions standard. China buses companies in China
generally produce vehicles according to order forms, therefore, excess inventories
of buses is generally not large and the average monthly inventory for the entire
industry is no more than 10,000 vehicles. Limited
financial ability will impact the development of passenger car market Although
the factors listed above will foster rapid growth of the bus market in China,
the financial ability of the bus industry and its customers will be greatly impacted
by macro-adjustment policies. During
the second half of 2006, China's central bank raised interest rates leading to
obvious difficulty in financing buses by customers. This is expected to have some
impact this coming year on this market. Pressures brought on by increased development
of railways is also expected to have detrimental effect on the growth of this
market, but how much is yet to be seen. The growth rate of China's bus market
is expected to range from 12% to 15% in 2007.
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