Over the past decade, China has experienced an infrastructure boom and mushrooming demand for road transportation, leading to rapid growth of the heavy-duty-truck (HDT) market. Sales of HDTs in China grew from 600,000 vehicles in 2015 to a peak of 1.6 million in 2020. Then, in 2022, the HDT market in China went into a slump; a regional economic slowdown, COVID-19 lockdowns, and the fact that many customers prepurchased HDTs in 2020 and 2021 resulted in a sales volume of only 700,000 vehicles in 2022 (Exhibit 1).
This slump is unlikely to be permanent. Given the size and resilience of the country’s economy, we expect the Chinese HDT industry to rebound and retain a significant and stable commercial base. That said, the rapid…