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Behind The Commercial Vehicle Market LNG From The Gloom And Doom

In recent years, the rapid development of the domestic natural gas industry and to promote the supply of natural gas, compared with the fuel economy of the vehicle has a higher liquefied natural gas commercial vehicle sales gradually rise. However, from the beginning of the second half of 2014, international crude oil prices continued to fall in influence, LNG commercial vehicles began to decline, but fell sharply in the first half of this year.

So, LNG why commercial vehicles by the gloom and doom? Is temporary cold, or really implies LNG vehicle market downtown is only short-lived?

Surprisingly Decline


Beginning in 2009, LNG commercial vehicles began to exhibit more significant growth, and the explosive growth in 2012, the real cause of the widespread concern of the industry.


Data show that in 2012, in the domestic heavy truck sales up sharply decrease of 28% in the background, natural gas truck to buck the trend growth, the annual sales of nearly 20,000, an increase of 140%, showing a very strong momentum, Shaanxi Auto is With more than 7,000 natural gas heavy truck product sales squeezed into the first echelon; and then the natural gas buses is also extremely popular, annual total sales of 33,500, an increase of up to 77.98%, is 15 times the industry average increase of total sales increased from 7.78% in 2011 rose to 13.15 percent; that time, 50 passenger car production enterprises, has 31 companies involved in natural gas buses.


To 2013, international oil prices fluctuated, although natural gas prices had a negative factor, but in our country under the automobile sales hit a new high, driven by sales of the overall recovery in the commercial vehicle market, LNG commercial vehicle sales still remain hot.


Data show that in 2013, total gas sales of heavy trucks reached 30,000, an increase of nearly 80 percent, or alarming, Shaanxi Auto, liberation, heavy truck, Truck, North Ben heavy truck, JAC heavy truck, Foton Auman, Valin Singapore, Malaysia and SAIC Iveco Hongyan and other mainstream car prices of natural gas products have substantial growth, including a gas Shaanxi Auto heavy truck sales reached 11,000; at the same time, passenger car sales of gas in 2013 has realized approximately 44,000 vehicles, an increase of more than 50 percent, becoming the best growth in the bus industry segments.


However, entering 2014, had also been in the industry generally optimistic about the LNG commercial vehicle market began insufficient. Although sales in the first half is pretty good, but the second half is worse, the growth rate is slowing down. At that time views of industry experts also were divided, optimists believe the LNG commercial vehicles in 2015 (especially natural gas heavy truck) will once again usher in the upgrade, and favorable policies to promote the discharge yellow car out of the trend growth, but the fact is proved the pessimists right.


According to statistics, in the first half of this year, China's natural gas heavy truck sales of only 8,469, compared to last year fell nearly 33 percent; natural gas buses will remain upward trend, sales of 5296, increased by 30.6% over last year, of which natural gas buses sales accounted for 82.8%. According to the industry body expects 2015 car ownership in China LNG to 205,000, the growth rate fell 20.82 percent.


Visible, LNG commercial vehicle market in overall decline among, there have been more obvious polarization, then such a "rainbow night" situation how come?


Tripartite bad


LNG commercial vehicle market by the gloom and doom, can generally be analyzed from the environment, economy and policy guidance in three areas.


First of all, the first half of this year, the downward pressure on domestic macroeconomic situation facing further increase throughout the commercial areas are bleak. China Automobile Industry Association data show that China's commercial vehicle production of 1,767,200 in the first half, down 14.86 percent year on year growth rate fell 13.7 percentage points; sales of 1,754,700, down 14.41 percent year on year growth rate fell 10.8 percentage points. Among them, the heavy truck and bus market, especially the two seriously injured, under the so-called nest without eggs will survive, LNG models naturally escape.


Second, although LNG vehicles with outstanding environmental benefits, but most users is the value of the use of the process of economic return and buy. Natural gas heavy trucks, for example, their car costs 80,000 ~ 100,000 yuan higher than conventional diesel vehicles, in the conventional oil and gas price difference between the larger, the process of using the average energy savings per kilometer fuel costs 1 yuan, a year to recover more out of the car, fees, then it considerable savings; natural gas buses and buses longer cost recovery period, but the basic level can be spread over a year and a half. In general, when the car with gas prices of about 75% in fuel prices, the cost is roughly equal to two, which means that only when both spread over 25% of consumers would choose the gas model ʱ??


However, the second half of 2014, with the rise of natural gas prices have also float around the price of natural gas vehicles, rises ranging from 0.5 yuan / cubic meter to 0.8 yuan / cubic meter, at the same time, the international crude oil prices decline from the original hundreds of dollars / barrel down to $ four dozen today / barrel, domestic gasoline and diesel prices also lower, so that the gap between the cost of LNG using ordinary gasoline and diesel commercial vehicles and getting smaller and smaller, economy Advantages further reduced.


In addition, LNG commercial a few years ago still belongs to new products, car prices are vigorously promotion, low down payment or no down payment and other promotional activities continued, now with the end of the promotional period, users are no longer able to before discount LNG price to buy cars, but also caused a slowdown in sales to some extent.


Moreover, policy-oriented changes brought about changes in the pattern of the industry chain. With today's hot new energy vehicles, as in previous years, LNG sales of commercial vehicles rose steadily, to a large extent with the government continuing favorable policies are inseparable.


April 2007, the National Development and Reform Commission issued the "energy development" Eleventh Five-Year "plan" put forward in city buses, taxis and other industries to promote gas vehicles; in August the same year introduced the "natural gas utilization policy" explicitly natural gas vehicles as a priority class gas fields; in 2011 the National Energy Board issued "LNG vehicle filling stations technical specifications" regulate the construction of liquefied natural gas refueling stations, unified technical requirements, the Ministry of Transport of the same year also launched a special fund to support energy conservation projects; 2012 re-release of the National Development and Reform Commission, "natural gas utilization policy of" giving priority to natural gas vehicles, and later the "energy-saving and new energy automotive industry development plan", "energy saving" second five "plan" and "Natural Gas Development "Twelve Five" plan, "are constantly injected to support the development of natural gas vehicles and power policy.


However, by December 2014, the State Administration of Quality Supervision of Special Equipment Safety Supervision Bureau issued a "guidance Safety Management (draft)" "further strengthen motor vehicle" oil to gas, made it clear that is not allowed to continue in with a motor vehicle "oil to gas," the country can not re-introduction of non-compliance with laws and regulations in the use of motor vehicles "Oil to Gas" requirement. This is not only the needs of the entire LNG automotive market caused a serious blow to the market for LNG gas supply chain downstream end also brings restrictions.


At the same time, policies on natural gas price adjustment is also used gas to end the industrial chain to increase the pressure. In March this year, the National Development and Reform Commission issued the "National Development and Reform Commission on non-residents to rationalize gas prices notice" requires all incremental gas reduction and increase the stock of gas prices. According to statistics, in 2015 the stock portion of the gas is about 120 billion cubic meters, the incremental part of about 60 billion cubic meters of gas. According to both the proportion of natural gas prices as a whole will face rising trend.


Recently there have been media reports, it has been voted the country's total gas supply LNG plant more than 70% of the oil inside has issued a document requiring the country to non-residents on the adjusted gas prices around the LNG plant with the highest gas prices, price point or in 8 months. Industry experts have said that the oil supply of the raw gas once prices, LNG producers cost pressures will surge, its prices will rise, low affordability of the user may gradually fade out the market, the domestic market will face downstream LNG a "shuffle." When oil prices fall, the gas price increase is certainly a longer-term bearish.


Polarization behind


Sales data look before we can find, natural gas long-distance passenger vehicles is not optimistic, the real growth is stimulating natural gas buses.


On the one hand, since the haze since the invasion of the vast land, air pollution control has been gradually incorporated into the local government's performance evaluation scope, the State Council "on accelerating the construction of ecological civilization Opinions" clear requirements, adherence to environmental quality and the bottom line, the atmosphere, environmental quality of water, soil and other "only better, not worse," as local levels of government environmental responsibility red, natural gas buses also became one of the many choices of urban pollution. In the first half of this year, Hangzhou, Nanning, Sichuan, the new natural gas buses were at more than 100, Dalian and Guangzhou, more than 300, Beijing is at the beginning of the Foton signed up 1,909 orders.


On the other hand, most of the city bus company is state-owned enterprise, has been due to "policy-related losses" and enjoy state financial subsidies, and from 2013 to 2015, the central government has allocated five billion yuan, 9.8 billion yuan and 11.5 billion yuan of special funds, focusing on Beijing, Tianjin and surrounding areas, as well as Jiangsu, Zhejiang, Anhui, Shanghai and other places for air pollution control, natural gas buses also enjoy a special fund of the column, so the "oil and gas parity" changes to natural gas buses the market is not much impact.


In addition, bus companies generally have strong vehicle inspection and maintenance capabilities for the normal operation of natural gas buses provided a guarantee, and its mileage is not long, fixed line, compared to natural gas trucks and coaches in the use of more convenient.


In the long term, the current international oil prices remain at a relatively low range, limited market good news Iran nuclear talks have success means more room for further decline in oil prices, coupled with domestic feedstock gas price increase soon, LNG vehicle ownership increase in volume in the second half of this year Speed ​​is probably more difficult to rebound. At the same time, a weak real economy, the domestic manufacturing industry has also been suppressed, iron and steel, building materials and other industries obvious contradiction between supply and demand, the industry thinly traded stock, plus freight logistics enterprises generally falling profits, LNG commercial vehicle market will be more uncomfortable.


Together with the LNG vehicle into the trough, as well as relying on the downstream business in this market to survive. Statistics Fifth China International Natural Gas Technology Equipment Exhibition held in March this year released show that in 2015 the average investment in natural gas vehicles compared to last year fell 55 percent in some areas, even investment dropped by nearly 80 percent. Currently, the majority of the LNG plant to maintain only a low capacity, the average operating rate of about 39%, also presents oversupply, some of the new device also come on stream in the second half, in the alternative energy pressure, LNG market outlook more depressed natural gas automotive industry as a whole have entered the winter.


Another point worth noting is that because large gas field in western China and eastern much use of imported natural gas, resulting in LNG terminal retail price from west to east, LNG and gas station construction vehicles using more concentrated in the west, which shows economic factors in Canada gas station construction accounted for a large component. In the filling station construction, land use government to impose high fees, so companies involved in the construction of natural gas filling stations were not enthusiastic, the number of natural gas filling stations less restricts the development of natural gas vehicle industry. Today, lack of demand, the feed gas price increases will be a long bearish LNG market, will inevitably lead to a further slowdown in the construction of filling stations, LNG trucks and buses difficult to improve ease of use, these commercial vehicles sales and LNG is not busy forming a vicious circle ʱ??


Overall, the changes in the industry in the external environment will cause more long-term commercial vehicle market LNG adverse effects, if there are no new local government subsidies or support policies, it is hard to say when they can recover. However, there are business models for LNG market is still full of confidence, such as Singapore, Malaysia Valin, chairman of Ambrose as in recent years, business meeting, says, "not because of a temporary downturn in demand for natural gas trucks do not Valin gas projects We will continue to push ahead. "

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