Gas price rise: LNG vehicle advantages weakened, heavy truck companies remain optimistic


After rising natural gas prices, the economics of LNG heavy trucks relative to traditional diesel heavy trucks have weakened. LNG heavy truck manufacturers said that the initial forecast price increase will affect sales by about 10%-20%, and the year-on-year growth rate will slow down. However, as the economics of LNG heavy trucks still exist, and the sales base in previous years was low, LNG heavy trucks are expected to maintain a relatively high growth rate in the next few years as the number of filling stations increases.

Reduced strengths

Due to the short time for price adjustment, LNG heavy truck manufacturers have not yet realized the obvious changes. However, after the price adjustment, the economics of LNG heavy trucks have weakened. The industry initially expects that the price increase will lead to a 10%-20% drop in sales of LNG heavy trucks compared to the price adjustment.

Dongfeng Commercial Vehicles told reporters that rising natural gas prices will definitely weaken the economic impact of LNG heavy trucks. An LNG heavy truck is 80-100,000 yuan more expensive than an ordinary diesel heavy truck. Before the price adjustment, due to the low price of LNG, this overpaid vehicle price can be recovered by the owner in a few years and begin to show a prominent cost advantage. As the price of natural gas rises, this payback period will increase, affecting the behavior of consumers. However, due to the low proportion of LNG heavy trucks in the company's commercial vehicles, no significant impact has yet occurred.

According to a reporter from Shaanxi Auto Group, the largest LNG heavy truck manufacturer in the country, the company’s initial projection of rising natural gas prices will lead to a 10% to 20% decline in sales of LNG heavy trucks. Shaanxi Automobile Group sources predict that the sales volume of LNG heavy trucks this year is expected to be 30,000 vehicles, and the company accounts for about 40% of the sales. According to the industry insiders, based on this calculation, if heavy truck sales volume is 700,000 this year, then the proportion of LNG heavy trucks is about 4.3%, which is lower than the market expected 10%.

Business is still optimistic

However, even if there are natural gas prices, due to the fact that the sales base of LNG heavy trucks in the same period of last year was still very low, the year-on-year sales growth of the LNG heavy trucks remained high. The industry is still optimistic about the sales of the heavy truck industry and LNG heavy trucks.

In 2012, LNG heavy trucks became the most compelling segment of the Chinese heavy truck market. The data shows that in 2011 LNG heavy trucks sold more than 5,000 vehicles. In 2012, LNG heavy trucks sold more than 12,000 vehicles, an increase of nearly 140% year-on-year. In 2012, 634,000 heavy trucks were sold, a year-on-year decrease of 27.63%.

Although the price of natural gas vehicles has risen, Dongfeng Commercial Vehicles believes that at present, natural gas prices still have certain advantages compared with diesel prices, and the LNG heavy truck market is still guaranteed. He believes that the future development of LNG heavy trucks needs to see the construction progress of gas stations, technical progress of LNG gas cylinders, and national efforts to promote LNG heavy trucks. At present, it seems that LNG heavy trucks still have more optimistic development prospects.

The Shaanxi Automobile Group believes that in the future, the sales of LNG heavy trucks will continue to grow at 70%-80% in 2015 and 50%-60% in 2015. Between; eventually stabilized at 30% of the heavy truck market share. Shaanxi Automobile Group's plan is to have 50,000 heavy truck sales in 2015.



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