Date
17 October 2017
Due to tighter emission requirement, replacement needs of trucks are expected to hit a record high in 2017-2018. Photo: Askci.com
Due to tighter emission requirement, replacement needs of trucks are expected to hit a record high in 2017-2018. Photo: Askci.com

How a toll road rule spurs demand for trucks

Following a sustained period of slow demand, sales of trucks in China have begun to pick up since February and maintained a year-on-year growth track over the past eight months, thanks to the implementation of a tighter toll road rule.

Sales of heavy-duty trucks in particular surged over 30 percent in November.

From late September, authorities have stepped up efforts to combat overloading, a common practice of truck drivers to save time and money.

They now have to pay a fine if the total weight of their truck and goods exceeds the approved ceiling, according to China Securities Journal.

Excessive loading often causes damage to road surface and increases the risk of traffic accident.

Logistics firms are thus forced to buy more trucks to meet orders.

An increase in freight rate amid stronger coal transportation demand and a lower base of comparison last year also contributed to the strong truck sales expansion.

Not only truck makers are cheered by the strong truck sales; toll road firms also stand to gain from the rise in truck traffic.

With tighter emission standards, replacement needs of trucks are expected to hit a record high in 2017-2018, the Journal said.

Reflecting the improving market outlook, leading truck maker Sinotruk (03808.HK) has seen its shares gain more than 80 percent since the beginning of the year. 

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CG

EJ Insight writer

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