Both in the field of commercial vehicles and passenger vehicles, they cannot do without the role of the transmission shaft, which refers to a tubular shaft or a solid shaft with a universal joint and is composed of a shaft tube, a telescopic sleeve, and a universal joint. The transmission shaft can cooperate with various accessories on the car to maintain high-speed rotation for a long time to ensure the high-speed and safe driving of the car.
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Transmission Shafts of Commercial Vehicle: Multiple Factors Ensure Heavy Trucks Market Boom
Firstly, driven by the policy of eliminating the national triple truck. On January 4, 2019, the Ministry of Ecology and Environment with other eleven departments jointly released a diesel engine remediation plan that proposed that by the end of 2020, more than 1 million medium and heavy diesel trucks will be phased out at the national level III and below. As of the end of 2018, the number of triple trucks in China was 1.55 million, of which nearly 85% were heavy trucks with vehicles ages five years and older, whose demand for renewal of the vehicles themselves was strong. Secondly, affected by the epidemic this year, the domestic and international trade situation has declined significantly, and the economies of various countries have been hit so hard that infrastructure is once again an excellent means to boost the economy and increase employment in this emergency, which will further drive the demand for heavy trucks. Finally, due to the continuous deepening of overload management, the capacity of each commercial vehicle unit has declined. While there is the fact that logistics demand becomes greatly increasing, whose proportion is mainly occupied by heavy trucks, accounting for 60-70%. We believe that the demand for commercial vehicles including heavy trucks will continue to increase.
Passenger Car Drive Shafts: Benefit from Increased Penetration of Electric Vehicles
Environmental protection is an eternal topic around the world. In the automotive industry, the electrification of automobiles has become the trend of the times all people regard. Sales volume of new energy vehicles in China in 2018 reached 12.15 million, which is expected to grow to 7 million by 2025, with a CAGR of 34.2%, and the sales volume in Europe in 2018 reached 407,000, which is expected to grow to 2025 3.905 million units, which can be seen that the penetration rate of electric vehicles worldwide continues to rise.
The profit of the transmission shaft in the field of passenger cars is much higher than that in the field of commercial vehicles. Electric vehicles have higher torque requirements on the transmission shaft. The higher the torque requirements on the transmission shaft, the higher the unit price of the product, and the higher the gross profit.
The domestic constant velocity shaft market is mainly occupied by joint ventures or foreign-funded enterprises, mainly dominated by SDS, a joint venture between GKN and Holyy Auto, which market share is about 45%, and most of the remaining share is occupied by some joint ventures with NTN of Japan, Wanxiang Qianchao, and other companies with smaller shares dominate.
Yuandong is the absolute leader of domestic non-constant velocity shafts, with a comprehensive market share of 40%-50%, of which light truck market share is 46% and heavy truck market share is 45%. In recent years, the gross profit and net profit of Yuandong have maintained a high level, where the overall gross profit is 31%, of which the gross profit of heavy-duty series products is 38%.
Yuandong has successively put into operation 2 million sets of constant velocity shafts in 2019, which can be applied in both new energy passenger cars and fuel vehicles. It is foreseen that those products will benefit from the development of electric vehicles and create higher gross profit since electric vehicles have higher torque requirements on the transmission shaft.
As the technology cores are overseas, of joint ventures and foreign-funded enterprises, and many domestic companies have diversified businesses, whose focus is not on the transmission shaft market. Yuandong relies on the double-tube drive of constant velocity shafts and non-constant velocity shafts, as well as its local advantages, to obtain more market share, which is expected to break the pattern of the constant velocity shaft industry and becomes a pioneer in the entire transmission shaft field.
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