Analysis of the Depressed Situation in the Car Engine Market in 2012

by myc1x1n84 on 2012-02-18 17:17:24

In 2011, China's automobile industry entered the adjustment year after the withdrawal of relevant preferential policies. The overall production and sales volumes reached 18.4189 million units and 18.5051 million units respectively, with a year-on-year increase of 0.84% and 2.45% respectively, marking the lowest point in 13 years. In contrast to the sluggish performance of whole vehicles, the engine market performed even less satisfactorily.

In 2011, the 56 automotive engine companies included in the statistical scope cumulatively produced 16.7191 million engines and sold 16.9714 million engines, representing a decrease of 1.21% and 0.26% respectively compared to 2010. This growth rate was 2.05 and 2.71 percentage points lower than the overall automobile production and sales growth rate respectively.

From another set of data, the year-on-year growth rates of automotive engine production and sales calculated in kilowatts were -3.64% and -3.39% respectively in 2011, which were 2.43 and 3.13 percentage points lower respectively than the growth rates calculated by unit numbers. Although there was a situation in the passenger car market where SUVs and MPVs were selling well while multi-purpose passenger cars were difficult to sell, it can be considered that after balancing the commercial vehicle market, the lackluster performance of the truck market, especially the heavy-duty truck market, was the reason for the lower market growth rate when calculated in kilowatts (i.e., engine power). If the passenger car market was not balanced, this disparity would have been even greater.

Diesel engines showed a "heavy" decline and "light" prosperity pattern. Divided by fuel type, diesel engines completed production and sales of 3.5896 million units and 3.7529 million units respectively throughout 2011, decreasing by 9.11% and 5.89% year-on-year respectively, which was a significant drop of 34.14 and 36.25 percentage points respectively compared to the growth rates of the same period last year. From the overall performance of diesel engine enterprises, among the 23 diesel engine enterprises included in the statistics for 2011, there were 6 enterprises whose cumulative production exceeded 200,000 units (one less than the previous year), 13 enterprises whose cumulative production exceeded 100,000 units (two more than the previous year), and 15 enterprises whose cumulative production exceeded 50,000 units (one more than the previous year). In terms of cumulative production volume ranking, Guangxi Yuchai, FAW Group, Anhui Quanchai, Weichai Holding, Dongfeng Motor Corporation, Kunming Yunnei, and Jiangling Holdings ranked in the top 7 positions. Among these, Anhui Quanchai, Kunming Yunnei, and Jiangling Holdings, which mainly produce light diesel engines, improved their rankings, while Weichai, which mainly produces heavy diesel engines, dropped one position.

Among the changes outside the top 7, China National Heavy Duty Truck Group, which was previously consistently ranked in the top 7, fell to 12th place in 2011; while several enterprises outside the top 7 such as Beijing福田Automotive, Weichai Power Yangchai, Great Wall Motors, and Qingling Group, which mainly produce light diesel engines, all performed notably well. Among the top 7 enterprises, the production concentration of the top 5 manufacturers was 56.02%, down 3.43 percentage points from the previous year; the production concentration of the top 7 manufacturers was 67.46%, down 3.59 percentage points from the previous year; if we include Dongfeng Chaoyang Diesel and Shandong Huayuan Leydong in the statistics, the production concentration of the top 9 manufacturers could reach 77.16%, down 3.71 percentage points from the previous year.

With the total number of diesel engine manufacturing enterprises not increasing but instead decreasing, the continuous two-year decline in production concentration at three levels has fully demonstrated the market structural change of heavy (type) decline and light (type) prosperity. Specifically, although Guangxi Yuchai declined again on the basis of the previous year’s drop, it still topped the list with a total output of 612,000 units. Among the enterprises with larger production volumes (annual output exceeding 50,000 units), Beijing福田Automotive (annual growth rate of 79.55%), Qingling (36.44%), Great Wall Motors (23.99%), and Weichai Power Yangchai (13.21%) performed well; whereas China National Heavy Duty Truck Group (-43.11%), FAW Group (-24.54%), and Dongfeng Chaoyang Diesel (-21.06%) experienced significant negative growth.

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