The Chinese market for new cars grew 15.5% to 3,936,527 units in the first seven months of 2008 as Wuling’s Light/Sunshine/City Breeze held its position as China’s top selling car line with sales of 336,632 units in July, up 22.1% year on year.
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The market remained buoyant in July 2008, with 469,732 new vehicles sold, up 6.2% year on year, UK analysts Jato Dynamics said on Tuesday.
Growth was, however, “noticeably lower” than the 18.7% reported in June 2008 indicating that, despite continued optimism in the region, China is not immune from the effects of increased fuel prices and global economic uncertainty.
Jato spokesman Nasir Shah said: “China’s growth remains impressive given the situation in the rest of the world, but a sudden fuel hike in July and a slight slowdown in the country’s economy has impacted on car sales.
“The staggering growth we saw this time last year has been tempered somewhat by caution as some Chinese consumers delay purchasing new cars until the fuel prices stabilise.
“Certain sectors continue to see incredible growth however, particularly the upper-medium and SUV segments, which are favoured by the image-conscious middle-classes.”
Brand performance
Volkswagen, which has been operating in China since 1985, was the country’s top-selling car brand so far in 2008, growing 13.8% year on year. It now sells more cars in China than it does in its home-market.
Wuling was second, growing 22.1%, while Japanese brands Honda and Toyota were in third and fourth place. Toyota performed particularly well in July, growing 42.7%.
Shah said: “There is fierce competition among manufacturers in China because the reward for success is so significant. A shrewd marketing initiative, or a popular new model can change the fortunes of a brand virtually overnight, such is the dynamism of the market right now.”
Local brand Jiangnan saw sales rise by 1016% YTD, thanks to huge demand for its Alto model, which can lay claim to being the world’s cheapest car, selling for a mere US$3,785.32.
Daihatsu has also posted significant growth in 2008, with sales of new vehicles rising 567% YTD. Skoda, which reported strong sales of its Octavia model, grew 485% in July compared to the same period in 2007. Foton (200%), New Dadi (177%), Mercedes-Benz (97.1%), Chrysler (57.8%) and Dongfeng (57.7%), also reported strong growth in the same period.
Top models
Small micro-van-based passenger vehicles remain an important product type in China. Two such vehicles, the Wuling Light/Sunshine/City Breeze and the Chana Green Star led the market in the first seven months of 2008. The remaining cars in the top 10 were the Toyota Corolla, Volkswagen Santana, VW Jetta, Hyundai Elantra, Buick Excelle, Honda Accord, Toyota Camry and Chery QQ.
New introductions performing well included the FAW Vita, Chery A1, Kia Sportage, Nissan Qashqai/Dualis (sold as the Xiaoke), Toyota Yaris, Mazda 2, JAC Binyue, Chrysler Sebring, Volkswagen Lavida, BYD F6, Great Wall Peri and Chery Riich R2.
Other models recording significantly increased sales include the Jiangnan Alto, VW Magotan (Passat in other markets), Skoda Octavia, Geely Vision and Toyota Corolla.
Segment trends
China’s growing middle-classes have traditionally favoured larger cars over smaller-displacement vehicles. This trend has continued as the lower medium segment remained the largest, with the Toyota Corolla, Nissan Tiida (Versa) and Ford Focus all proving popular.
Second was the upper-medium segment, beginning to look like it may one day threaten the top spot with an increase in sales of 26.4% YTD. Growth in this segment was led by the Volkswagen Santana and Jetta, Hyundai Elantra, Buick Excelle and VW Passat.
Levels of growth in upper-medium segment were bettered only by SUVs, which experienced an increase in sales of 44.2% YTD, indicating the increased spending power of China’s rapidly expanding middle-classes and the social status attached to car-ownership in the region.
The mini van segment was the third largest with an 18.6% share YTD. The segment was led by the Wuling Light/Sunshine/City Breeze, Chana Green Star, Hafei Zhongyi/Minyi, Nissan Livina (soon to be built in Brazil as well) and Buick GL8.
The small car segment, led by the Chevrolet Aveo, FAW N3, Volkswagen Polo, Honda City and Geely KingKong commanded a 12.7% market share YTD, slightly higher than a year earlier.
The executive and mini segments made up the majority of the rest of the market, but were both losing market share. Meanwhile, the sports segment remained very small, despite the introduction of coupé models from Geely and Brilliance and the start of local manufacture of the MG TF convertible.
Brand Performance
| Make | Jul YtD_08 | Jul YtD_07 | % Change YtD |
| VOLKSWAGEN | 503,769 | 442,567 | +13.8% |
| WULING | 336,632 | 275,771 | +22.1% |
| TOYOTA | 327,536 | 229,546 | +42.7% |
| HONDA | 270,502 | 220,001 | +23.0% |
| CHERY | 231,308 | 232,784 | -0.6% |
| NISSAN | 191,820 | 153,866 | +24.7% |
| HYUNDAI | 186,476 | 136,358 | +36.8% |
| CHANA | 182,880 | 187,249 | -2.3% |
| BUICK | 169,306 | 180,883 | -6.4% |
| FAW | 140,111 | 123,132 | +13.8% |
Top Models
| Make & Model | Jul YtD_08 | Jul YtD_07 | % Change YtD |
| WULING LIGHT/SUNSHINE/CITY BREEZE | 336,632 | 275,771 | +22.1% |
| CHANA GREEN STAR | 154,018 | 147,880 | +4.2% |
| TOYOTA COROLLA | 130,113 | 48,092 | +170.6% |
| VOLKSWAGEN SANTANA | 129,355 | 129,292 | +0.0% |
| VOLKSWAGEN JETTA | 126,996 | 100,494 | +26.4% |
| HYUNDAI ELANTRA | 119,792 | 64,818 | +84.8% |
| BUICK EXCELLE | 104,548 | 104,369 | +0.2% |
| HONDA ACCORD | 90,668 | 71,869 | +26.2% |
| TOYOTA CAMRY | 88,440 | 94,157 | -6.1% |
| CHERY QQ | 85,471 | 78,123 | +9.4% |
Segment Trends
| JATO regional segment | Market Share Jul YtD_08 | Jul YtD_08 | Jul YtD_07 | % Change YtD |
| PR Mini | 4.3% | 169,609 | 155,404 | +9.1% |
| PR Small | 12.7% | 499,652 | 430,036 | +16.2% |
| PR Lower Medium | 25.5% | 1,002,636 | 906,735 | +10.6% |
| PR Upper Medium | 22.5% | 885,263 | 700,383 | +26.4% |
| PR Executive | 9.5% | 374,877 | 365,722 | +2.5% |
| PR Luxury | 0.3% | 9,894 | 16,730 | -40.9% |
| PR Mini Van | 18.6% | 730,570 | 648,985 | +12.6% |
| PR SUV | 6.7% | 262,593 | 182,094 | +44.2% |
| PR Sports | 0.0% | 1,433 | 1,312 | +9.2% |
| Other | 0.0% | 0 | 188 | -100.0% |
| Grand Total | 100% | 3,936,527 | 3,407,589 | +15.5% |
