The Chinese vehicle market might not be surging but sales of crossovers and SUVs certainly are, registrations rising by 54% (YoY) in March. So which OEMs are winning the sales war, and which makers of once-popular sedans are hurting for their lack of in-demand products?
Retail sales of SUVs were up by more than a third in 2014 to 3.82 million and have more than doubled since since 2012, according to CPCA (the China Passenger Car Association). It should therefore surprise no-one that the biggest trend at this week’s Shanghai motor show – apart from a sudden vogue for orange upholstery in all manner of concept cars – was the appearance of ever more crossovers and SUVs. They came in sizes S to XXL, and here’s an interesting development: foreign brands are not the ones setting the pace.
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Last year, the Haval H6 was the Chinese market’s number one SUV, with 315,881 sold. It also held the title in 2013, with 217,889 registrations. That sort of year-on-year rise echoes the sales performances of most other crossovers and SUVs but Great Wall’s SUV brand keeps on hitting the sweet spot with consumers. A lot of that is down to price, with the H6 not only undercutting Shanghai Volkswagen‘s rival Tiguan but comprehensively outselling it.
The H6 was the fourth best selling passenger vehicle in China during March, and the smaller Haval H2 was the number two SUV. In overall sales, nothing could touch SGMW’s Hongguang, as per usual, but look how the H6 has now moved ahead of the VW Santana for year-to-date sales:
- Wuling Hongguang minivan: 67,350 sales in March; 189,432 YtD
- Volkswagen Lavida sedan: 41,732; 143,132
- Volkswagen Santana sedan: 31,686; 86,570
- Haval H6 SUV: 31,446; 87,749
- Haval H2 SUV: 15,975; 41,743
- Volkswagen Tiguan: 15,520; 67,228 (the market’s third best selling SUV)
Little wonder then that just about every Chinese car maker is moving fast to add more crossovers and SUVs. Great Wall revealed four prototypes of future 4x4s as well as one production model at Auto Shanghai and even with these coming on stream, there is still room for more – in a range that comprises the H2 to H9, an H1 is missing, as are an H3 and an H4. That’s not including crossover derivatives which might ape the H6 Coupe and H7 Coupe, two models currently under development. According to Great Wall, sales volume for its specialist SUV brand was 162,200 in Q1, up by 99% compared to the same period of last year.
It’s astonishing how little is written about Haval outside China but the brand is quietly expanding all the time. Its next foreign adventure will be tackling the notoriously tough Australian market, where the locals will be enticed to supposedly ‘Have It All’ as the tagline goes. That’s meant to mean strong styling, apparent excellent reliability and high standard equipment levels; all for not a huge amount of money. It will likely take Great Wall a long time to conquer the Middle East, Africa and Australia. When it does start to be taken seriously in these places, the parallels with Toyota’s solid foundations built on the Land Cruiser series will be obvious.
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By GlobalDataLed by Haval, Chinese manufacturers took 56% of the home market’s SUV sales in Q1 of this year. This is due to a number of factors. These include the choking traffic in big cities where, just as in Europe and the US, people like to sit up higher than in a sedan or hatchback; strong competition that has seen prices dipping; the low cost of petrol allowing many to have put fuel economy to one side as their top priority; and the rise of the millenials with their willingness to consider certain well equipped models from a couple of the country’s indigenous brands.
So where is all this heading? Plug-in hybrids are being seen more and more, even if their overall numbers remain modest. The move of this technology into SUVs will soon be the next big thing, as the Communist Party has mandated a fleet average of 5l/100km by 2020. That’s 47mpg in US terms or 56 miles per UK gallon.
Local manufacturers built 14,328 and sold 14,122 PHEVs in March, according to CAAM (China Association of Automobile Manufacturers). In comparison with the same month last year, production and registrations shot up by 280% and 300% respectively. EVs (passenger vehicles and LCVs combined) totalled 9,390, which represents a 350% improvement, and locally made hybrids’ sales rose by 190% to 4,732 units. What will these numbers be this time next year? That trend is only going one way, and it will keep surging.
China’s light vehicle market was up 9% (YoY) to 5.31 million units in March, and apart from the more than 50% surge in SUV sales and a double-digit rise for minivans, there’s one other equally important fact to remember. Registrations of sedans fell. That’s chilling news for Volkswagen, the leading brand. Not only is the Tiguan old and long overdue for replacement, but still we see no entry in the booming B-SUV segment – where are the production versions of the 3.9m-long Taigun and 4.2m long T-ROC concepts? And Toyota needs to examine why three months into 2015, its best selling SUV, the RAV4, already lags the Haval H6 by 70,000 vehicles.
The last major Chinese motor show of 2015 happens in November. By the time Auto Guangzhou takes place, the brands making up the major volume in the local market are likely to have shifted in order compared to 2014. Even more than in the US and Europe, the pecking order will continue to change, thanks to the relative strength and weakness of manufacturers’ SUV model ranges. And the days of sedans such as the VW Sagitar (-16% in March), Ford Focus (-40%), Buick Excelle GT (-9%) and Chevrolet Cruze (-7%) as big sellers might be already a thing of the past.
