China-based OEM, CIMC Vehicles Group, has reported a 20 per cent increase in revenue year-on-year for the third quarter of 2021.
Net profit for the reported period was approx. €106.6 million.
CIMC Vehicles sold a total of 163,300 units/sets of semi-trailers, truck bodies for specialty vehicles and truck bodies for van-type light trucks worldwide, an increase of 21 per cent year-on-year.
CIMC Vehicles’ total assets amounted to approx. €3.1 million in the first three quarters of 2021, an increase of 16.5 per cent as compared to the end of 2020.
Currently, the three major businesses of CIMC Vehicles are semi-trailers, truck bodies for specialty vehicles, and truck bodies for van-type light trucks. In the first three quarters of 2021, these three businesses in China achieved steady growth in revenue.
Regarding the semi-trailer business, China’s semi-trailer industry enters a period of major changes, with accelerated restructuring in the industry, stricter implementation of the national standards for the second-generation semi-trailers, and improved quality and capacity of logistics transportation of the semi-trailers.
Influenced by the factors such as macroeconomic downturn, rising global commodity prices and declining demand for tractors, the market demand for semi-trailers surged following a drop in Q3 2021. During the first three quarters of 2021, as product replacement and upgrading continued to stimulate demand, the sales and revenue of CIMC Vehicles’ semi-trailer business in China increased significantly by 26.5 per cent and 22.7 per cent year-on-year, respectively.
Regarding the business of truck bodies for specialty vehicles, with the implementation of China’s stage 6 vehicle emission standards, the short-term homogeneous competition in the industry was intensified and the market demand for heavy trucks in China slowed down in Q3 2021. The Group actively developed the market, strengthened R&D on new energy specialty vehicles, and pursued the strategy of joint development with tractor manufacturers. In the first three quarters of 2021, the concrete mixers and urban dump trucks that have been the focus of CIMC Vehicles’ operational efforts moved up another notch in their leading position, and the sales and revenue of truck bodies for specialty vehicles increased by 17.5 per cent and 16.5 per cent year-on-year, respectively.
Regarding the business of truck bodies for van-type light trucks (the TB business), as the growth of the market demand for van-type light trucks in China accelerated, CIMC Vehicles released the ‘TB’ brand in a forward-looking manner to focus on manufacture and sales of refrigerated and dry truck bodies of the TB business.
In terms of refrigerated truck bodies, the Chinese government has made it clear that the planning of cold chain logistics should be sped up to further promote the standardisation of cold chain equipment and the development of new types of cold chain storage facilities, which stimulated the accelerated development of cold chain logistics. In the first three quarters of 2021, the sales of refrigerated trucks in China increased significantly year-on-year, and the revenue and sales of refrigerated truck bodies of CIMC Vehicles continued to increase. In terms of dry van truck bodies, as the Chinese government issued the Notice on Further Strengthening the Production and Registration Management of Light Cargo Vehicles and Mini Passenger Vehicles, the compliance management of light trucks was continuously strengthened. CIMC Vehicles actively developed the business of dry truck bodies for urban logistics distribution and promoted the transformation and upgrading of urban logistics distribution through the Sophisticated Manufacturing System.
In the future, as the Chinese government advocates green, low-carbon transportation modes and strengthens the construction of green infrastructure, CIMC Vehicles will actively develop and promote new-energy, intelligent, digital and lightweight green products to enhance the core competitiveness of its sustainable development and inject vitality into the development of sustainable transportation.
CIMC Vehicles also commented on optimisation in layout of localised production lines and significant recovery in overseas markets.
In addition to the steady expansion of the domestic market, CIMC Vehicles’ overseas markets recovered significantly. Benefiting from the recovery of the global economy, the demand for semi-trailers in overseas markets continued to be released. The Covid-19 pandemic reshaped consumption habits and orders surged in the overseas semi-trailer markets.
CIMC Vehicles further deepened its business philosophy of ‘Intercontinental Operation, Local Manufacturing’, offered convenience to clients by strengthening local manufacturing and local procurement, and actively improved its global supply chain management and global logistics distribution system. Such measures have created long-term development opportunities for CIMC Vehicles in the international economic cycle.
In the first three quarters of 2021, the revenue of CIMC Vehicles’ semi-trailer business in the North America market increased by 8.6 per cent year-on-year. While gradually reducing the impact of globalisation headwinds on the company, CIMC Vehicles’ sales of refrigerated semi-trailers in North America increased significantly by 178.5 per cent year-on-year, benefitting from the optimisation of localised production lines in North America and the rapid surge in market demand.
Moreover, CIMC Vehicles seized the opportunity of the rapid rebound of the Europe semi-trailer market to further enhance the production line and capacity layout of sophisticated manufacturing. In the first three quarters of 2021, the sales and revenue from the Europe semi-trailer market increased significantly by 40.9 per cent and 36.4 per cent year-on-year.
Economic advantages of scale have also been highlighted by CIMC Vehicles’ Sophisticated Manufacturing System.
According to the data, CIMC Vehicles has been exploring the construction of the ‘Sophisticated Manufacturing System’ since 2014, and so far, the Group has globally established 13 ‘Light Tower’ Plants for the production of semi-trailers, six ‘Light Tower’ plants for the production of truck bodies of specialty vehicles and two ‘Light Tower’ plants for the production of truck bodies for refrigerated trucks.
‘Light Tower’ plants of CIMC Vehicles constantly convey the green concept of ‘saving energy and reducing pollution’ through its products from design concept to manufacturing process, and continuously implement intelligent construction and the “hitting peak emissions and achieving carbon neutrality” work strategy of the PRC government, taking lead in the green and sustainable development of the semi-trailer and specialty vehicle industry.
CIMC Vehicles stated that the Group will actively allocate the raised funds to enhance innovation-driven development and achieve digital transformation in the future, preparing a good mechanism for further research and development of intelligent interconnected semi-trailer products and a new generation of new energy refrigerated distribution vehicles. The Group aims to fully realise ‘Sophisticated Manufacturing System’ and ‘management of new infrastructure’ by 2025, opening a new chapter in China’s intelligent manufacturing and high-end manufacturing.