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Vehicle Operation Safety Requirement, namely GB7258, which may be launched in early 2011, rules that heavy trucks over twelve tons must install retarders. The favorable policies may benefit Terca Retarder (002213) which concentrates on manufacturing retarders. China spare parts industry develops rather fast this year, and sales revenues of auto parts amounted to 1.03 billion Yuan in the first eight months, and the net profits were 82.3 billion Yuan, up 81.5%.
Retarder industry in China lays behind western countries. European countries and the US have regulated that retarders must be installed in buses and trucks. However, similar regulations emerged in 2002 to demand installation of these facilities in commercial vehicles. And Vehicle Operation Safety Requirement, launched in May this year, rules that vans over nine meters or no less than twelve tons and any carriers with danderous goods must be equipped with retarders.
This is undoubtedly good news for retarder manufacturers, especially for Terca, the leading China retarder manufacturer with 30%-40% market shares.
It is predicted that the market size for retarders will amount to 550,000 sets to 730,000 sets, eight to eleven times bigger than the markets size this year.