Analysis & Prediction of Bus Market in 2009 & 2010 (Second Part II)

www.chinabuses.org: Currently, the chanciness of domestic bus export exist broadly, illustrating that bud builders are not sure about overseas so they can neither exploit the market nor handle it. In the financial crisis, there are even more uncertainties in bus export, so bus builders will encounter more difficulties.

There are two countries changed a lot in China bus export markets, one is Iran, sales volumes of the first ten months to Iran were just above 300 units, down 95% year on year; and another is Russia, the figure were only 60, down 97%. Both of the two countries were used to rather important overseas markets for Chinese bus builders. And at least the following obstacles have to be step over:

The first, as required by Iranian government, local dealers must get formal import license from Department of Commerce of Iran. And this can be easily used as means of trade barrier.

The second, the import approve standards must be carried out strictly. Iranian Industry Standards Organization has to examine and verify whether import commodities are in line with current standards and regulations, and some mandatory standards will expire until Match 20, 2010. The big glissade is related with the provision.

The third, high tariff. Iran has increased import tariff for auto and spare parts to prevent foreign vehicles to enter Iran, and this makes China export to Iran even harder. Since Iran is not member of WTO, high duty policy has been taken by Iran to limit auto importing for many years.

And Russia is similar to Iran in these aspects.

In a word, the tough international environment affected China bus export a lot last year.

　
g. Sales and quality of public transport buses decreased, affecting profits of domestic bus industry.

Sales volumes of public transport bus in December, 2009 decreased 3.2%, the eleventh consecutive month since last year, indicating that bus industry are affected by financial crisis, and this is also the main reason for the overall decrease of domestic bus industry last year.

At the same time, sales volumes of large city buses decreased 4%, while medium buses increased 0.60%, and light buses increased by 5%. So proportion of medium and light buses is increasing, which was a great feature in the bus industry last year. And the buses have three characteristics, these are cheap, low in technology as well as competition. So we can say that operation quality of bus industry this year decreased and these are also main reasons for decreasing profits of many domestic bus builders.

h. People pay more attention to safety of buses.

　　
Safety became more and more important for the burning buses in Chengdu in 2009.

i. New energy buses highlights bus markets in 2009.

The Auto Industry Rejuvenation Plan was passed in Jan. 2009 to encourage development of new energy industry. And many domestic cities started new energy vehicle purchase jobs, for example, one hundred new energy city buses were bought form Foton AUV, and another 800 buses were signed with Foton. And according to Shanghai Planning Commission, there will be about 60,000 new energy vehicles till 2010.

j. Positive changes in competition landscape.

Major Chinese bus builders encountered decreasing in 2009, and concentration ratio of China bus industry improve in a whole. Currently, concentration ratio by Yutong Bus, King Long, Gloden Dragen and Higer was raised to 45.4% from 45.2% the previous year. And it is more and more clear that resources are concentrating to superior enterprises, and this is good to China bus industry in a long run.