Weichai Power's sales performance of downstream customers is strong. It is expected that the Company's business climate in the first quarter will continue to increase, exceeding market expectations. The company's main supporting customers, strategic partners Foton Motors and Shaanxi Automobile's shareholding sales and sales are both prosperous and will directly drive sales of Weichai engines. The company's sales of automotive engines in January accounted for 68% of sales in the third quarter of 2009 and 70% in the fourth quarter. The company’s engine sales in the first quarter significantly exceeded that in the third and fourth quarters of 2009.
Relative to the increase in fixed asset investment, the growth rate of industrial added value is a better predictor of company sales. First, the main source of profit for the company is the engine products for the heavy trucks for logistics transportation. Secondly, we believe that the sustained economic recovery and growth will bring about an increase in economic activity. With the increase in economic activity, the demand for logistics and transportation will increase, which will be reflected in the increase in the growth rate of freight turnover, and when the existing capacity cannot be met. After the increase in freight turnover, the demand for logistics transportation heavy trucks increased.
The current freight price index maintained a high level, verifying the prosperity of the logistics and transportation market.
The recovery of overseas markets will create double benefits for Weichai. First, the recovery of overseas markets will drive the recovery of domestic exports, thereby increasing the demand for heavy trucks for port logistics and transportation; secondly, directly increasing the volume of heavy truck exports.
It is difficult for potential competitors to put pressure on Weichai in the medium term. The production and matching of heavy-duty truck engines have a high technological content. Due to the scale and brand advantages, the industry status of Weichai is difficult to shake. In addition, Weichai will also establish its dominant position in the general powertrain field by means of radiating small-displacement engines.
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