SHANGHAI -- Pickup sales, which have been a bright spot over the past two years, are losing steam as deregulatory moves Beijing initiated three years ago on their use in urban areas fades.
With overall new-vehicle deliveries stuck in a downturn, more than ever the government needs to push provincial governments to allow pickups to operate in cities.
Most Chinese cities are densely populated and plagued by air pollution. Pickups, often equipped with diesel engines, have been blamed for exacerbating traffic congestion and air pollution, and have long been categorized as commercial vehicles and barred from cities.
The situation started to change in 2016 after Beijing selected some inland provinces and regions for a pilot program to allow pickups in cities with the goal of boosting local economies.
Of the 31 provinces and regions in mainland China, only six -- Henan, Hebei, Liaoning, Yunnan, Hubei and Xinjiang -- had loosened restrictions on use of pickups in varying degrees by the end of 2018.
Yet deregulation has been effective in unleashing pent-up demand for pickups. China pickup sales posted double-digit growth over the past two years.
Another shift is unfolding in China -- pickups are increasingly being used to carry people instead of cargo. As a result, consumers are buying more gasoline-powered trucks instead of diesel pickups.
In response to changing consumer needs, General Motors and Ford Motor Co. now sell imported gasoline pickups in China, such as the Chevrolet Colorado and Silverado, and the Ford F-150 Raptor.
The trend has kept growing this year. In the first half, sales of gasoline pickups surged 32 percent to top 68,000, while deliveries of diesel pickups fell 13 percent to roughly 160,000, according to the China Association of Automobile Manufacturers.
After most cities in coastal China adopted new State 6 vehicle emissions rules, which are similar to Euro 6 rules, on July 1, many domestic Chinese pickup makers have upgraded trucks to allow the vehicles to drive in those cities.
Two domestic automakers -- Great Wall Motor Co. and SAIC Motor Corp. – this year launched new-generation pickups equipped with turbocharged gasoline engines and eight-speed automatic transmissions.
While pickup manufacturers introduce improved products, the deregulation process surrounding their use is stalled.
In June, Shandong in east China became the only province this year to deregulate pickups.
Without more deregulation, pickup deliveries in China have turned south, sliding 1 percent to some 246,000 in the first seven months, according to cnpickups, a Beijing website covering the domestic pickup industry.
Robust pickup sales are badly needed to prop up the Chinese auto market where new-vehicle sales declined for the 13th straight month in July and slumped 11 percent to 14.1 million through the month.
The days when pickups were diesel-guzzling polluters are history.
Most domestic provinces and regions still maintain a decades-old ban on the use of pickups in their cities. Beijing needs to nudge more of them to loosen the grip.