Analysis on New Energy Bus Market in the first half of 2011 (I)

www.chinabuses.org: Apparently sales growth trend slows down and it increases the most in January and decreases the most in February. Large new energy buses grow the fastest as mainstay of the development.

According to the statistics of Industry Research Center of Chinabuses.org, total sales of new energy buses in the first half of 2011 were 2998 units (including hybrid buses, pure electric buses and fuel cell buses), accounting for over 80% of total sales of new energy commercial vehicles, 21.7% more than that of the first half of 2010, and growth amplitude of the first half of 2010 approached 200% (comparing to that of the first half of 2009), apparently growth slows down. From monthly sales trend we can see that the sales of new energy buses are high in January and April, over 700 units per month, and low sales in other months, less than 500 units per month.

Table 1: Monthly Sales Table of New Energy Buses in the first half of 2011

Chart 1: Monthly Sales Chart of New Energy Buses in the first half of 2011

We can see from above table and chart that:

Comparing the first half of 2011 with the first half of 2010, monthly sales wax and wane with overall growth amplitude 21.7%, and it increases the most in January and decreases the most in February. Large and medium buses as leading role in commercialization are mainly due to frequent start and stop and low requirement for speed of urban public buses and government institutions as major buyers to initiate the industrialization with policy support. Energy and environment protection problems make new energy buses the hope of vehicles development in the future and new energy buses are spotlight of vehicle manufacturing in new energy field in China.

Table 2: Sales Table of New Energy Buses from 2007 to 2011

Chart 2: Sales Chart of New Energy Buses from 2007 to 2011

We can see from above table and chart that:

1. Sales growth amplitude of new energy buses reaches 21.7%, while overall growth amplitude of new energy buses market in the first half of 2010 approaches 220%, decreasing almost 200%.

2. Sales of large buses grow the fastest among new energy buses, with growth amplitude 27.6% and sales volume, 2100 units, is the largest, which means over-ten-meter large new energy buses are what the market requires most.

3. In new energy buses sales structure, sales of light buses are much less than that of medium buses, not to mention large buses.

Therefore the conclusion is that:

In the first half of 2011, sales growth trend of new energy buses slows down and large new energy buses have the largest market shares and grow the fastest, as the backbone to promote the growth of new energy buses industry.

Analysis on reasons:

1. Development of new energy buses market is supported by national policies. From the beginning to expansion, market demands rise from 558 units in the first half of 2007 to 2998 units in the first half of 2011. In recent years government enhances the promotion of new energy buses and encourages the development of relevant industries.

2. The government defines the subsidy standard for new energy buses: basic price difference between new energy buses and traditional buses plus scale effect and technology development. Large buses exceed medium and light buses in price difference and technologies, so they may get more subsidies.

3. Unit price of large new energy bus is higher with more profits, which is the reason why enterprises are willing to produce large buses.

4. New energy buses are mainly used as public buses in large and medium-sized cities. In public buses market, eleven-to-twelve-meter buses market is the most successful segment market in the first half of 2011, and large new energy buses are in the greatest demand.

5. Monetary tightening is one of the main reasons for market decline. Most of buses manufacturers and customers are SMBs which are influenced the most by monetary tightening. Both bus industry and customers are lack of money and new energy buses are relatively valuable, so the result is obvious.

6. There are no major events for the promotion of new energy buses in 2011 (Shanghai World Expo and the 16th Asian Games in 2010), impacting on the sales of new energy buses in the first half of 2011, which is also an important external factor for the slowdown.

7. Many transport companies are caught in some unexpected troubles with new energy buses, such as inconvenient maintenance, high maintenance expenses and lacking of charging stations, discouraging them for more new energy buses in 2011.

8. Many local governments implement local protection policy to boycott off-site brands for state subsidy, influencing the promotion and development of new energy buses in the first half of 2011 to some extent.