Stringent requirements are causing truck production to slide, but DEF solutions to grow
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As of January 1st 2015 National IV regulations for diesel engines came into effect and sales of National III standard units were no longer allowed. As a result of the new regulations truck production slid in 2014.
Data from Auto Stats shows truck sales fell 8.9% in 2014 to 3.18m units, with light truck sales falling by 240,000 units, or 12.9%, to 1.66m last year. Meanwhile, factory costs are soaring as manufacturers are under pressure to create cost-effective clean technologies.
As e-commerce rises the strain on the nation's logistics networks is increasing, meaning existing truck owners are finding solutions to becoming National IV compliant. In particular, the use of urea or diesel exhaust fluid (DEF) solutions is becoming more and more widespread.
According to Auto Stats, the cost of urea mix for a heavy truck with a retro-fitted DEF solution to make a round trip from Beijing to Shanghai is less than 600 yuan ($97). As fuel costs remain low, using urea is an attractive option for many operators.
Despite the apparent cost savings, less than 2% of the nation's gas stations stock the relevant fluid. Wang Zhonghua, head of a Wuhan based logistics company, claimed he spent more than 30m yuan ($4.8m) on National IV standard trucks which were fitted with the systems but found it hard to restock when travelling in China's inland provinces.