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Domestic commercial vehicles rush to increase prices to cope with rising costs
With rising raw material costs, the automotive industry has quietly adjusted its strategies. According to exclusive reports from the Shanghai Securities News, domestic light and heavy trucks have already seen price increases due to higher production costs. However, despite these hikes, manufacturers are still struggling with supply chain bottlenecks, which have made it difficult to meet growing demand.
Interestingly, for the first time in over a decade, some original equipment manufacturers (OEMs) have started asking their suppliers to purchase goods directly, signaling a shift in supplier relationships. A senior executive from a self-owned commercial vehicle company told the Shanghai Securities News, “Since 2008, commercial vehicles have consistently been on the rise. Major brands like Foton Motors and Jinbei Automobile have raised prices multiple times.â€
According to information obtained from distribution channels, FAW Group’s light truck series saw price increases ranging from 1,000 to 2,500 yuan, while Jianghuai Automobile’s light trucks rose by 2,000 to 4,000 yuan. Even the smallest price adjustments were as high as 700 to 800 yuan.
Li Mengxi, an analyst at Guojin Securities, revealed that heavy truck prices have also increased significantly, with some models going up by 4,000 to 10,000 yuan. The average selling price of a domestic heavy truck is around 300,000 yuan, with a 2% to 3% increase overall. Some sources even reported that certain heavy trucks have risen by nearly 60,000 yuan.
While dealers have canceled discounts, leading to higher retail prices, a top commercial vehicle company denied this claim, stating, “There has indeed been a price increase compared to previous sales prices.†When asked whether the price hikes were coordinated, most companies confirmed that the moves were driven by internal cost pressures rather than external coordination.
Yi Changfeng, an analyst at Changjiang Securities, explained that the sharp increase in raw material prices—especially steel and rubber parts—has directly impacted production costs. “This year’s surge in iron ore prices has led to higher steel costs, and rising oil prices have pushed up the cost of rubber components,†he said.
Despite the price increases, commercial vehicle manufacturers say they can only offset part of the cost pressure. The rest must be absorbed through internal efficiency improvements and better management practices.
Compared to passenger car manufacturers, commercial vehicle companies are more confident in raising prices. Yi Junfeng noted that the Chinese commercial vehicle market is dominated by a few key players. In the heavy truck segment, Sinotruk and Weichai hold significant market shares, while FAW Group, Foton, and JAC lead in the light truck sector. This stable market structure gives them more pricing power without fearing major loss of market share.
From a market perspective, the price increases haven’t had a negative impact so far. Due to supply chain issues, commercial vehicles remain in short supply. As one senior executive put it, “Car buyers no longer focus on price cuts or discounts—they just want to buy quickly. Because of spare parts shortages, our production can’t keep up with demand.â€
To address the situation, OEMs have even sent purchasing teams to suppliers to build stronger relationships and secure supplies. “For the first time in a decade, we’ve had to ask suppliers to provide parts. We’re actively working with them to ensure smooth production,†the executive added.