The minicar segment in Europe grows 5% in the first half of 2016, which is lower than the overall market at +8,8%. The two Italian segment leaders benefit from the impressive rebound of the Italian car market, the fastest growing major market in the EU. The Fiat Panda is more dependent on its home market than its sibling Fiat 500, and therefore is able to hold on to the segment lead, which it already claimed in the first quarter. The help Fiat hold a 28,5% share of the segment. The Volkswagen Up! remains a distant third with less than half the volume of the leader with sales down 5%, while the Renault Twingo reclaims its fourth place after having dropped to sixth in the first quarter. The rear-engined, rear-wheel drive Twingo lost a lot of ground in Q1 and has recovered only half of that in Q2, but should be able to hold on to its position for the rest of the year, with not a lot of new or updated models arriving in showrooms the coming months. The Toyota Aygo stays well clear of its PSA siblings Peugeot 108 and Citroën C1, while the Smart Fortwo is the biggest winner in the top-10 with an increase of 26%. It even outsold the 108 in Q2 and looks set to leapfrog the French minicar to steal 8th place. That’s still a long way from the fifth place it held in 2013 and before, but bear in mind there were fewer rivals back then, and the Forfour surely cannibalizes some Fortwo sales as well.
Archives for August 2016
The Chinese car market is one of the most diverse, with over 400 different locally produced passenger cars from over 70 domestic and foreign brands, which increases to more than 1.000 models including imported vehicles, minivans, pickups and commercial vehicles. In June just 2 new models were introduced, but July marks a return to the familiar launch cadence with no less than 7 new models, including an all-new brand, the second new brand in 2016 and the third in the past 12 months, after Qiteng in January and Enranger last July. This month marks the addition of 3 domestic SUVs, 2 sedans and one MPV. We’ve already discussed the overall July 2016 sales figures for China, below we’ll introduce those newly introduced models for this month.
The highly anticipated resurrection of the Borgward brand has materialized with sales of the BX7 SUV starting in China this July. For those who haven’t heard of Borgward before: this is a former German luxury brand that ceased operations in the 1960s. It’s most famous model is the Isabella, which was produced from 1954 till the end of the company. In 2005 Christian Borgward, the grandson of the original founder started making plans to restore the brand to its former glory. Fast forward a decade and although Christian is the president of the company, its owner is 100% Chinese: Beiqi Foton Motor, a subsidiary of BAIC (Beijing Automotive Industry Corporation), one of China’s largest automotive manufacturers. Surprisingly, Foton Motor is the commercial vehicle division of BAIC, making anything from heavy trucks, light trucks, pickups, SUVs, vans and MPVs to pickups. Unsurprisingly, Borgward tries to capitalize on its heritage, not bothered by the fact that it’s largely unknown to its prospective buyers, especially those in China, but the brand expects its image to benefit from the emphasis on its German roots, in a similar way Qoros also tried to flaunt its German design and technology. [Read more…]
Chinese car sales are back in their traditional fashion: up with booming figures, as 1,55 million locally produced cars were sold in July, an increase of 28,7% over July 2015, although it has to be noted this was an exceptionally low month with sales down 5% over July 2014, because the domestic stock market collapsed just over a year ago. Still, we’re talking about the best July ever recorded, and by a large margin. This is also supported by the Seasonally Adjusted Annualized Selling Rate, which stands at 22,2 million units, the highest of the past four months. Year-to-date, Chinese car buyers have taken delivery of over 12,1 million locally produced cars, an increase of 13% over the first seven months of last year. As we’re used to by now, sales of SUVs and crossovers fueled the market, up 47% to 580.700 units, followed by MPV sales at +39% to 153.600. Even sedan sales showed impressive growth in July, naturally slower than the overall market, but a 20% improvement is the best we’ve seen in months, which translates into 824.900 sales. After enjoying record shares of over 43% in January and February, the local brands have seen their share slowly decline to 37,5% in July. Year-to-date, 40% of the cars sold in China wore a badge from a domestic brand, still two points above the full-year 2015 figure and the highest it’s ever been.
What will be interesting to see is if the Chinese auto market will finish 2016 in the positive. That may seem like a no-brainer as it ended last year with a bang, when the government stepped in to save a depressed market after the stockmarket meltdown, by launching a tax cut for cars with small engines (below 1,6 liters). This boosted sales to record heights in the last three months of 2015, as you can see in the graph above. The tax cut is scheduled to end by December 31st and if that happens as planned, Chinese consumers will pull forward their prospective purchases to 2016 and the market will get yet another boost in the last few months of the year before plummeting back down in early 2017. However, if the government decides to prolong the tax break (and communicates that in a timely manner), the market will remain more stable but it remains to be seen if it can keep up with the sales pace set in Q4 of last year. If the tax break stays, chances are the final figure for this year will be 22 million vehicles, an increase of “just” 9%. Still, that would be the healthiest solution for the market as a whole.
The leader of the model chart Wuling Hongguang celebrates 12 consecutive 40.000+ months and keeps the Haval H6 behind, by an ever-shrinking margin. The H6 topped the ranking in April and has been close behind ever since. Its multiple price cuts this year have boosted sales 69% in July and 43% YTD to help it close in on the year-to-date #2 position. The Volkswagen Lavida is the best selling sedan model in China, but is under threat from the Buick Excelle GT. The GAC Trumpchi GS4 goes from strength to strength in fifth place, once again frankly outperforming the Baojun 560, which has seen its volume shrink for four straight months, coming from 42.000 in March to just over a third of that figure in July. The Honda CR-V is also very impressive in 12th place, ahead of the Buick Envision for the first time in 11 months to take the title of best selling foreign brand SUV. [Read more…]
Sales in the Alternative Power segment accelerated their freefall by plummeting 21% in Q2 of 2016 to just 63,084 vehicles, after an 11% decrease in the first quarter. This is the biggest decline of all segments in the second quarter, and the main reason for the softening demand is clear: cheap gas keeps luring people away from EVs, hybrids and more fuel-efficient cars in general into larger crossovers, SUVs and pick-up trucks. And there’s no indication of the oil price going back up anytime soon, which spells more bad news for EVs and hybrids. Perhaps a few new model launches can breath some new life into the segment, most notably the new generation Toyota Prius, Chevrolet Bolt and the Tesla Model X.
Sales of Large Commercial Vans in the US rose by 13% in Q1 2016 to 104,535 vehicles, after an impressive 28% gain in Q1. At +19% in the first half, the large vans therefore not only outsell, but also outgrow the small commercial vans which show an 8% growth rate. Low fuel prices undoubtedly have lured businesses to the larger vans, although the more efficient Euro-style vans from Ford, FCA and Mercedes-Benz continue to win market share from the old-fashioned truck-based body-on-frame vans from GM and Nissan.
Sales of Small Commercial Vans in the US rose by 6% in Q2 2016 to 24,162 vehicles, after an increase of 11% in the first quarter. Low fuel costs are weighing down on the segment, as some businesses might prefer a large cargo van instead. Still, considering their practical size for small deliveries and their manoeuverability, I believe there’s a market for vans this size in the US as well. The Mercedes-Benz Metris (as the Vito is called in the US) falls right inbetween the two cargo van segments, but its premium pricing puts in closer to the large commercial van segment. Bear in mind these figures also include the passenger versions of these vehicles, an area where Ford is particularly strong with the Transit Connect, and which Nissan is trying to break through with its taxi versions of the NV200, most notably as the new standard for New York City cabs.
After discussing the US auto brand sales ranking for July, let’s zoom in on the models. After recording an almost-30 percent growth rate in June, sales of Ford F-series shrank by 1.0 percent in July. One might think that GM’s aggressive attack ads against the Ford were working, were it not for the fact that Chevrolet Silverado also suffered a 4.0 percent fall in sales. By recording a 13.3 percent growth compared to July’15, Honda CR-V managed to place a high 4th in the sales ranking, the first time it’s placed this high since 2014. In the process it also pushed Toyota Camry down to 5th spot, the second time on 2016 the perennial best-selling car was bested by another model in the rankings. Arguably, the best performance in July came from Nissan Rogue, though, whose sales rose by 32.8 percent, allowing the model to reach 6th place in the standings, the best performance ever for the model, whose previous highest ranking was 9th last month. To complete what was clearly a good month for compact crossovers, Toyota RAV4 placed in 9th spot, with sales up 19.3 percent.
Sales of Large Pickups in the US rose by 6% in Q2 2016 to 561,915 vehicles, after showing a 5% increase in Q1. This is one of the most important segments for the Detroit-3, with these kinds of volumes and the huge profit margins they earn on this type of vehicle. It’s a cut-throat market and the vehicles are marketed with their toughness, towing and hauling capacities and masculinity. However, with fuel economy becoming ever more important in this segment as well, Ford switched to an all-aluminum body for its thirteenth generation F-150, launched last year. And in Q2, its main rival Chevrolet first took a stab at Ford, showing TV ads where a load of concrete blocks and the corner of a toolbox are dumped into the F-150’s bed, gashing it, while the same actions in the Silverado’s steel bed result in nothing more but dings and scratches. Unfortunately for GM, the ads didn’t work as desired, with the Ford gaining 16% and the Silverado losing 3% of its volume.
Sales of Small Pickups in the US rose by 13% in Q2 2016 to 112,476 vehicles, after an 18% increase in Q1. Even then, total sales in this segment are less than a fifth of those in the Large Pickup segment, though the gap continues to narrow with manufacturers launching new entries to the segment after ignoring it for a number of years. Toyota has refreshed its Tacoma less than a year ago, GM re-entered the segment in 2014 with two models after abandoning small pickups in 2012 and Honda has just launched a new generation Ridgeline. The oldest model in the segment is the Nissan Frontier, which has been around virtually unchanged since 2004. While in other parts of the world the next generation Frontier (called NP300 and/or Navara) has already been introduced, Nissan USA has not revealed if and when that new pickup truck will make it Stateside. Of course, it’s not that hard to imagine the company first wants to lay its focus on a successful launch of the second generation Titan, a vehicle that should help Nissan establish a foothold in the highly profitable but Detroit-3 dominated full-sized pickup segment.
Last February, I wrote an article about the consequences of a (then potential) Brexit for the auto makers who produce cars in the UK. Now that the British people have actually voted to leave the European Union, let’s see how the result of the upcoming break-up may influence the sales rankings in the European car market in the second half of 2016. I’ll first start with clarifying that even when the split-up is completed, which is expected to take at least 2 years, we at Left-Lane.com will continue to include UK car sales data within our EU reports, as these include the countries with which the EU has a free trade agreement (p.e. Switzerland and Norway), and we’ll have to assume that such an agreement will be struck with the UK as well. Of course, with the vote taking place June 23rd, the effects won’t be fully visible yet in the June sales figures, not in the least because there’s always a delay of a few weeks between a customer order and the actual delivery (and registration of a “sale”) of a car. However, the uncertainty preceding the actual vote may have caused private buyers to at least postpone their purchase, as the UK market, which grew by 3,2% in the first half of the year, stabilized at -0,8% in June and +0,1% in July.
Contrastingly, while the rest of Europe was in a sales crisis, the UK has been one of the strongest markets in Europe in recent years, breaking sales records year after year as a result of low interest, a booming housing market and carmakers willing to offer good deals in one of the very few markets with an actual demand. However, the financial uncertainty of the coming few years during the break-up with the EU, combined with a depreciating British Pound are likely to stall that growth in the short and mid-terms, and analysts expect a decline of the British car market this year and next. In contrast, Southern European car markets had been hit exceptionally hard with a huge drop in sales after the global financial crisis since 2008, and they’ve only just started to accelerate their recovery from their rock-bottom crisis levels. Italy, Spain and France have been among the fastest growing countries in Europe in recent months, showing double digit gains over 2015 volumes. But the Brexit vote is also expected to temper those recoveries, as analysts have lowered their predictions of growth for the second half of 2016 for all of Europe, as the decline in the UK will not only influence the figure for the entire market, being the second-largest of the continent, but the uncertainty that comes with the break-up will also slow down growth in the rest of Europe. [Read more…]