According to the firm, YtD light vehicles sales saw growth of 8%.

Whilst the passenger vehicle market in September achieved year‐on‐year (YoY) growth of 7.6%, marking the third consecutive month of single‐digit growth, the light commercial vehicle market continued to deteriorate, with sales falling by 11% on last year to 380k units. This marked the first double‐digit decline since February 2013, with YTD sales dropping by 2.7% YoY to 3.7 million units.

LMCA said that the truck segment (which includes light trucks, pickups and mini trucks) has suffered since the state‐imposed IV emissions standards were introduced in 2013. Prior to July, when these emissions standards were still in the planning stages, the truck market experienced modest growth. Thereafter, the market developed steadily for several months. However, despite doubts over the severity of the standards and whether they would, in fact, be implemented as publicized, they transpired to be far stricter than they had been previously.

It added that the high cost of the SCR engines used in IV vehicles has pushed up the purchase price of such vehicles by around 50%, which is a significant factor for customers whose main purchasing condition is price sensitivity. As a result, the market has fallen sharply, particularly in the Light Truck segment. In September, sales of Light Trucks declined by 38%

YoY, only a slight increase from August, while this lower YoY growth can be traced backed to February 2013.

The emissions standards upgrades not only set a higher barrier for consumers, but also put considerable stress on local OEMs.

Beiqi Foton, the market leader in the Light Truck segment, saw monthly and YTD sales fall by 40% and 22%, respectively. Jianghuai followed, reporting both monthly and YTD sales drops of 58% and 18% in YoY terms.

Moreover, the emissions standards triggered a number of manufacturers of low‐end Light Trucks to shift production to low‐speed trucks given that these vehicles will not be affected by the emissions standards changes until 2017. Consequently, the light truck market is likely to be impacted by the low‐speed Truck segment in the short term.

On a more positive note, LMCA says that stricter emissions standards have prompted vehicle upgrades, while boosting the development of the medium‐high level vehicle market; this, in turn, has benefited several foreign and JV manufacturers. Jiangling Motors (JMC) is a notable example of one such company; its sales in September reached 9,802 units, up 28% on last year, with YTD sales increasing by 37% YoY, and Light Trucks achieving 79,577 units, the same level as that attained during the whole of last year. These successful results suggest that JMC will exceed Nanjin Yuejin’s performance and squeeze into the top five brands, only just behind the fourth‐ranked brand, Dongfeng. Simultaneously, local OEMs such as Beiqi Foton, Jianghuai and FAW have been heavily promoting their high‐end products, which bodes well for future product upgrades in general.

The weather has also affected the market of late; notably, the smog in northern China, which has presented the government with a considerable challenge when it comes to solving the environmental issues that the country faces.

LMCA concluded: ‘We believe that the policy of scrapping yellow‐label vehicles will provide a major stimulus to the market over the next few years. More significantly, given that light trucks have specific uses in the commercial field, they are unlikely to be replaced by vehicles from other segments; ultimately, demand for light trucks will remain solid in the long term. After a subdued period, we expect the light truck market to recover in the second half of 2015, or, at worst, in 2016.’