Blog: Glenn BrooksSmall car fever grips the US and Chinese markets

Glenn Brooks | 20 May 2011

Where once it used to be astonishing to see such an enormous number each month, suddenly noticing that only 91,152 combined units of the Wuling Sunshine, Hong Tu and Rong Guang found buyers in April is worth examining. This little van is popular amongst the Chinese for its ability to serve as both a family's ride and a small business work vehicle, as SGMW's executive VP Matt Tsien notes from the floor of the Liuzhou plant in the clip below.

The (Changan) Chana Star/CM8 series remains the closest competitor (27,582 sales in April) for the Sunshine et al but it too suffered a sales dip in April, while the overall passenger vehicle market rose by 3% year on year. With only 103,459 sales for the year to date, the Dongfeng Xiaokang, number three in this segment, trails the big two by 58,411 and 300,639 registrations respectively.

So what's causing the Chinese to look beyond former favourites? Competition, and rising incomes. With 551,490 sales and market share of 13% in April, the VW brand remains way ahead of its nearest rivals, General Motors, and third placed Wuling (SAIC owns the majority stake in Wuling but GM insists that it can count in its own 44% minority holding to declare itself China's largest vehicle manufacturer). Much of VW's 25% rise over the first four months of 2011 comes down to its uncanny ability to track the local market's trends: suddenly, the lower medium segment is white-hot and Volkswagen has a number of cars to offer buyers.

It isn't just the Shanghai VW Lavida and FAW VW Jetta that are selling up a storm: the Shanghai VW Polo (Europe's previous generation model), while in the supermini class below the lower medium models, just scraped into the top ten last month. Urban professionals are entering the market at a greatly accelerating rate and cars like the Polo and its larger brothers are much in demand, especially with the cachet of the Volkswagen brand.

The lower medium segment is where the Hyundai Elantra, China's second best seller in April, and the increasingly popular (old shape) Ford Focus also dwell. And let's not forget GM's still rising star, the little Buick Excelle sedan and hatchback which has thus far found over 124,000 sales in 2011.

Considering what's presently going on in the US market - the Chevy Cruze has been gathering steam all year, just as it continues to do in China, while Ford is really starting to ramp up Focus production at the Wayne plant in Michigan - the desires of vehicle buyers in the world's two largest national markets have suddenly converged. Well, that's setting aside the shrinking if still enormous main segments that separate them, of course, namely giant pick-ups and micro-minivans.


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