The mainstream heavy trucks reduced the price of the entire country's III heavy truck market.

The heavy trucks equipped with the Weichai III engine have seen price reductions. Similarly, State III heavy trucks featuring EGR engines have also lowered their prices. The trend of concessions in the National III heavy truck market seems to have no end. In September, promotional activities and price cuts continued to flood the market. Price reductions ranged from RMB 5,000 to RMB 20,000. Vehicles with the biggest drops were mostly those equipped with Weichai high-pressure common rail engines, such as Shaanxi Auto and Foton, and those using EGR engines like China National Heavy Duty Truck, Dongfeng Liuqi, and Jianghuai Geerfa. According to CNHTC, after installing an EGR engine, the overall vehicle cost only increased by around RMB 10,000. In contrast, high-pressure common rail engines added approximately RMB 24,000 to the cost. This explains why some heavy truck manufacturers have significantly reduced prices for their National III models after switching to EGR engines. High-pressure common rail systems are largely controlled by Bosch and Japanese companies, making it difficult for these engines to cut prices. But why do Shaanxi Auto and Foton's National III models offer discounts of over RMB 10,000? According to a representative from Shaanxi Auto and Futian, the cost is being shared between the manufacturer and Weichai. It’s even rumored that Weichai initiated the price cuts to counter the competitive advantage of EGR engines and gain more market share. As a result, other companies using Weichai III engines, such as SAIC Iveco Hongyan, are expected to follow with similar promotions. Will this lead to a full-blown price war? If a vehicle costs RMB 10,000 and 5,000 units are sold at a loss, the company could lose up to RMB 50 million. Even if the cost is shared between the OEM and suppliers, it’s still a significant amount. Liu Keqiang, marketing manager at Shaanxi Automobile Sales Company, admitted that the promotions are temporary and will continue for a while. However, he emphasized that companies won’t stay in a losing position indefinitely. With technological advancements, supply chain optimizations, and improved management systems, companies can achieve total cost leadership and reduce prices without harming their profits. But if price cuts are made without real cost reductions, and others follow suit, it may eventually escalate into a price war. The question now is whether FAW will take action and whether CNHTC will follow suit—both will be critical in determining if a price war breaks out. Liu Zhenguo, assistant to the general manager of FAW Jiefang Trading General Company, stated that FAW will not chase the price cuts and will continue promoting its products on its own schedule. A representative from CNHTC’s Tianjin branch said, “Even if they lower prices, their prices remain close to those of EGR-based National III trucks.” Therefore, CNHTC is unlikely to join the price battle, though it may introduce some promotional offers. However, during interviews, several company representatives and industry experts expressed concerns that the current situation might persist, potentially triggering a price war in the heavy truck sector. “This is unfair competition,” said Liu Keqiang. “If it continues, it could lead to a vicious cycle and disorder in the industry.” He pointed out that the initial unfairness stems from the government’s lenient regulation of EGR engines. “Strictly implementing national policies would mean that companies using high-pressure common rail engines would suffer losses.” Behind the price war lies a deeper competition between EGR and high-pressure common rail technologies. It tests both the companies’ ability to bear the pressure and the government’s regulatory capability. If corporate profits keep shrinking and sustainable development becomes impossible, the ultimate losers will be consumers, businesses, and the country itself. View related topics: National III standard commercial vehicle companies face new challenges.

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