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China car sales analysis October 2017

China-car-sales-graph-october_2017Sales of domestic passenger cars in China edges up by half a percent in October 2017, to almost 2.32 million sales, the highest volume of the year so far. With such a slow growth rate and 2 months ahead of us with booming growth rates last year, it will be difficult for the Chinese car market to reach its expected 5% growth rate in 2017. Year-to-date sales for the first 10 months are up 3,34% to just over 19 million. If the pace does not improve for the full year, it would be the slowest growth rate in modern history, and down from 17,2% last year. At least we can be almost sure the market will show another record year as sales would have to be down 12% in the last 2 months for a full-year decline (or down to their 2015 levels, which hasn’t happened a single time so far this year). Back to October: the only segment to show growth was that of crossovers and SUVs again, which were up by 13,5% to 995.600 sales (YTD up 17,3%), while sedans were down 3,9% to 1.116.200 sales (YTD up 1,9%) and MPVs too the biggest hit at -13,2% to 205.600 sales (YTD down 5,7%). Within those sales figures, sales of electric cars and plug-in hybrids jumped 107% to 91.000, or 4% of the market. For the first 10 months, EV and plug-in hybrid sales rose 45% to almost 490.000 units, or 2,6% of the total market. The Beijing government has set a target of 6,7% in 2020 and as much as 20% by 2025, helped by a carbon credit scheme that was originally planned to be imposed in 2018 but which has been postponed to 2019. This year, an estimated 700.000 New Energy Vehicles are expected to be sold.

The Seasonally Adjusted Annualized selling Rate in October stood at 25,8 million, a similar level as last month. The share of domestic automakers in October jumped to 42,8%, up 3 percentage points on September and the highest figure since last March, but still down from 44,2% in October 2016. Sales of domestic brand vehicles across all segments were down 2,7%, compared to a gain of 5,2% for European brands, +5,3% for US brands and +10% for Japanese. In contrast, South-Korean brands continued their losing streak to 10 months as they lost 21,5% in October and 53,1% YTD.… Continue Reading …

China car sales analysis September 2017

China-car-sales-graph-september_2017

The Chinese car market continue sits steady growth in September, showing a 3,4% increase to almost 2,3 million sales of passenger cars. This is the fourth consecutive month of single digit increases after years of booming growth. It also builds confidence in the belief that the market will continue its winning streak in 2017 and finish the year in positive territory despite an exceptionally strong last quarter of 2016. That brings the year-to-date total to almost 16,8 million sales, an increase of 3,7% on the same period in 2016. In absolute terms, 2017 is ahead of last year by 600.000 sales, which means the likelihood of yet another new sales record is becoming greater by the passin gmonth. We’d need at least an 8% sales decline in the last quarter to see the first annual decline in a few decades in China. Even considering the exceptionally strong finish of 2016, that seems pretty unlikely, especially taking into account the sales tax on cars with engines of 1,6 liter and smaller will increase again in January, from 7,5% back to its normal rate of 10%, which should pull forward sales of this kind of vehicle to the last quarter. Back to September: the crossovers and SUV trend seems unstoppable with yet another double digit gain: +10% to 971.000 sales, while sedans improve 3,7% to 1,16 million sales and the decline of the MPV segment accelerates to -25% to 165.900 sales. Within those sales figures, electric cars and PHEVs also showed a impressive improvement of 79% in September, to almost 78.000 sales. EVs were responsible for most of that growth, as sales increased 83% to 64.000, compared to a 62% increase for PHEVs, to 14.000. These figures add up to 325.000 EV and 73.000 PHEV sales in China so far this year, an increase of 38% on the first 9 months of 2016 and 2,4% of the overall market. The Beijing government has set a target of 6,7% in 2020 and as much as 20% by 2025, helped by a carbon credit scheme that will be imposed in 2018

The Seasonally Adjusted Annualized selling Rate in August stood at 25,8 million, a similar level as last January, which has been the highest so far this year, and up by 850.000 on August, marking the 6th consecutive month of increased SAAR. The share of domestic automakers in September was 39,8%, the highest figure in the past 3 months and down from 41,8% in September 2016. Sales of domestic brand vehicles across all segments were down 1,5%, compared to a gain of just 2% for US brands, +12% for Japanese brands and +15% for European brands. In contrast, South-Korean brands are down for the 9th month this year, by 23%.

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China car sales analysis August 2017

China-car-sales-graph-august_2017The Chinese car market grows for the third consecutive month in August 2017, with a 6,5% increase to 1,87 million sales. That brings the year-to-date total to almost 14,5 million sales, an increase of 3,7% on the same period in 2016. Looking at the final four months of last year, they were exceptionally good in terms of sales volume due to the pending reduction of the tax cut on small vehicles (engines of less than 1,6 liters). The tax, which was temporarily halved to 5%, increased to 7,5% on Jan. 1st 2017 and will return to its normal rate of 10% on Jan. 1st 2018. This may give the Chinese car market another boost in the final few months of this year, but will it be enough to keep the market from decreasing for the first time in a couple of decades? The year-end rally in 2016 pulled forward a lot of sales, which translated in a slow start of 2017 and that may be difficult to make up in the final few months of the year. Back to August: crossovers and SUVs continue their boom with an 18% increase to 760.700 sales, but for only the second time this year, after February, sedan sales also improved, up 4% to 954.800 units. The MPV segment remains weak with a decline of 19% to 155.200 sales. Within those sales figures, electric cars and PHEVs also showed a impressive improvement of 76% in August, to almost 68.000 sales. EVs were responsible for most of that growth, as sales increased 96% to 56.000, compared to a 22% increase for PHEVs, to 12.000. These figures add up to 260.000 EV and 59.000 PHEV sales in China so far this year, an increase of 30% on the first 8 months of 2016 and 2,2% of the overall market. The Beijing government has set a target of 6,7% in 2020 and as much as 20% by 2025, helped by a carbon credit scheme that will be imposed in 2018.

The Seasonally Adjusted Annualized selling Rate in August stood at 24,9 million, the highest since last January and up almost a million on July. The share of domestic automakers in August was 38,5%, the lowest figure in the past 13 months and down from 39,15% in August 2016. However, it’s worth noting that the share of domestic brands in the crossover segment is an impressive 56%. Despite their success in this hot segment, sales of domestic brand vehicles across all segments trailed the market growth at +4,7%, though still beat the US brands at +2,8% and the South-Korean brands at -27,2%, their lowest rate of decline since last February. With European brands up 8,7%, most of the growth in China came from Japanese brands at +25,3%.

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China car sales analysis July 2017

China-car-sales-graph-July_2017After two months of slumping sales in April and May, the Chinese car market recovers with two months of increases in June and July. July sales are up 5,4% on 2016 and a whopping 30,8% on July 2015, which was especially depressed when the Chinese stock market crashed, before the Beijing government stepped in with their tax reduction on vehicles with small engines. A total of 1,65 million new passenger cars were sold last month, naturally a new record for July sales in China. The year-to-date total now stands at 12,59 million sales, an increase of 3,4% on the first seven months of 2016. The Seasonally Adjusted Annualized selling Rate stands at 24 million in July, the highest figure since January. SUVs and crossovers are once again the main (and only) winners in April with sales up 18% to 689.500 units, while sedans decline for the fourth consecutive month at -0,3% to 824.900 sales and MPV sales continue to plunge at -11% to 136.500. New Energy vehicle sales improved 55% to 57.000 units, as EV sales gained 70% to 45.000 units and PHEVs rebounded for the second straight month at +16% to 12.000 sales. Year-to-date, EV and PHEV sales in China are up 22% to 251.000 sales, of which 204.000 EVs (up 34%) and 47.000 PHEVs (down 13%). Sales of domestic automakers were up 9,5% and their share is up from 38% to 39,5%, although that is the lowest share since last January. Japanese brand cars are up 16,3%, sales of US brand cars are up 3,9% and of European brand cars are up 0,9%, while sales of South-Korean brand cars are down 46,7%.

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China car sales analysis First Half 2017

China-car-sales-graph-H1_2017In the first six months of 2017, Chinese car sales are up just 3% to 10,93 million. If the market maintains this growth rate, it will become the lowest increase in more than 13 years and possibly in more than 25 years. And there’s reason to believe it will come to that scenario, if you look at the sales curve in the second half of 2016, with increasing sales in the last quarter due to a pending increase in sales tax on cars with engines smaller than 1,6 liters, from 5% to 7,5%. Then again, that same tax will rise again in 2018 to 10%, so sales may show a similar curve in Q4 of 2017 as consumers pull forward their buying decisions to benefit from the lower tax. Back to the first half of 2017, in which crossovers and SUVs gained 14,9% to 4,41 million sales, while sedan sales were down 2,5% to 5,42 million and MPV sales slumped 9,4% to 1,09 million. Of these 10,9 million total passenger car sales, 42,3% came from domestic brands and 57,7% from import brands, compared to a ratio of 41,3% vs. 58,7% in all of 2016, as sales of foreign brand vehicles have slightly dipped while sales of local brands have continued to rise, especially thanks to the introduction of a range of afFordable crossovers by almost every single brand.

Auto-sales-statistics-China-Honda_URV-SUVBut that doesn’t paint the complete picture, as European brand sales have remained virtually stable at +0,85% and US brand sales have improved only slightly better than the overall market at +3,86%. The big shift has taken place between Japanese brands and South-Korean brands, as the former are finally starting to recover from their troubles during a diplomatic spat between China and Japan in 2012 over a few islands in the East China Sea, even though only Honda and Mitsubishi have returned to the market share they held in 2011. Still, Japanese brands have grown at a pace of +16,36%, double the gains of the domestic brands, while Korean brands were the only nation to lose volume at a terrifying -46,7%. The reason for that demise has been explained in our monthly reports for the last four months, but there’s another underlying reason which has been going on for a longer period. The South-Korean brands never achieved the kind of mainstream status in China as they did in Europe or North America. They remained a low-cost, low quality option for customers who wanted an import-brand vehicle without having to pay the premium for an actual established brand from Europe, the US or Japan. When the domestic brands started to improve their quality and subsequently their brand image, and also started launching a huge number of afFordable crossovers to satisfy the demand for this type of vehicle, the Koreans were left behind as customers proved less brand loyal than expected. Especially Hyundai has been left behind in this race as its partner Beijing Automotive keeps on expanding the brand’s sedan range to no less than 9 models of different generations sold alongside each other with a 10th nameplate coming up, compared to just 4 crossovers. When recovering from the anti South-Korean sentiment, both brands need to be quick to launch afFordable crossovers to the Chinese market or risk facing reduced market shares for years to come.

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China car sales analysis June 2017

China-car-sales-graph-June_2017After two months of small declines, the Chinese car market returns to a modest growth with sales up 3,2% to just under 1,79 million units. However, there have been reports that the June sales figures are artificially boosted by heavy discounts as 2017 sales threatened to lag behind 2016. Again, crossovers and SUVs are the only type of vehicle to improve year-over-year, with a 16% increase to 741.400 sales. Meanwhile, sedan sales were down 4,3% to 883.000 and MPV sales dropped 3,7% to 163.700 units. Within those sales figures, electric cars and PHEVs also showed a nice improvement of 33% in June to 59.000 units, of which 48.000 EVs and 11.000 PHEVs. For the first six months, sales of New Energy Vehicles totaled 195.000 (160.000 EV and 35.000 PHEV), an improvement of 14% due to a slow first quarter when the government reduced tax incentives on this type of vehicle. New Energy Vehicle sales represented less than 1,5 percent of China’s total new-vehicle volume in the first six months, but the Beijing government holds on to its target of 6,7% in 2020 and as much as 20% by 2025, helped by a carbon credit scheme that will be imposed in 2018.

The Seasonally Adjusted Annualized selling Rate in June stood at 23,2 million, up from the last two months and the third-highest figure of the year so far. The share of domestic automakers was similar to that of May at 40% as all the growth in the market came from domestic brands while sales of import brand cars were stable. Year-to-date, the share of domestic brands now stands at 42,25%. First half car sales in China now total just over 10,9 million units, an increase of 3% on the first half of 2016. However, average transaction prices dropped 4% over the first half of 2017.

 

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China car sales analysis May 2017

China-car-sales-graph-may-2017Car sales in China seem to have stalled after years of double digit growth. The main culprit for the slowdown has been mentioned on these pages before: the government has artificially boosted demand for cars with small engines since the 3rd quarter of 2015 when the market threatened to sink into the red due to a collapsing stock market and reduced customer confidence. That tax break has worked perfectly in pulling forward car purchases in Q4 of 2015 and in 2016 but it was cut in half by the beginning of 2017 and has since affected the Chinese car market in a negative way. Sales of vehicles with engines of 1,6 liters or less fell 9% to 1.15 million last month. In Q1, total market sales were still up by 5,7% but two months of declines have brought the year-to-date tally to 9,25 million, up just 2,7% on the first 5 months of 2016. A 2,2% loss in April was a first warning sign and now in May sales are down by another 2,1% to 1,71 million units. The Seasonally Adjusted Annualized selling Rate rebounded to 22,2 million, still the second lowest figure in the past 12 months. SUVs and crossovers continued to fuel the market with sales up 13% to 715.000 units in May, but this could not offset declines in deliveries of sedans (-9,3% to 839.000 sales) and MPVs (-17% to 150.000). The share of domestic automakers was the lowest since last August at 40,3% and it has fallen hard since its peak of 47,1% in February. However, compared to May 2016, the domestic brands have increased their sales 3% while the foreign brands saw their volume shrink by 5,5%.  Year-to-date, the domestic share is now 43,4%.

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New model introductions in China, March & April 2017

The Chinese car market is one of the most diverse in the world, with over 400 locally produced passenger car models from more than 70 domestic and foreign brands. If we include imported vehicles, minivans, pickups and commercial vehicles, there are more than 1.000 different models available. In the March 2017 sales ranking, we welcome 11 new models: 6 crossovers, a sedan, a hatchback and an EV version of an existing crossover. In the April 2017 sales ranking, we welcome 9 new models: 5 crossovers, 1 MPV and 3 sedans (of which 2 EVs).

Roewe i6

Auto-sales-statistics-China-Roewe_i6-sedanAfter a successful launch of its first crossover, the Roewe RX5, SAIC launches its first sedan with its new corporate design, and it immediately is one of the most mature looking Chinese sedans on the market. Gone are all the frivolous shapes and shiny chrome accents, well except for the grille, that is. You could almost call it boring. The i6 launches in one of the most difficult segments in China, that of affordable compact sedans, but still a segment with a lot of potential. Power comes from either a 1,0T three-cylinder with 125hp/170Nm mated to a 6MT or 7DCT gearbox or a 1,5T with 170hp/250Nm also mated to a 6MT or 7DCT gearbox. A PHEV version named i6e will follow soon, powered by a 1-liter three-cylinder withh 125hp and a 82hp electric motor. Dimensions are 4.671/1.835/4.460mm with a wheelbase of 2.715mm.… Continue Reading …

China car sales analysis April 2017

China-car-sales-graph-april-2017The Chinese car market is fluctuating in the first four months of 2017: After a stable January, a promising 20% gain in February 2017 and a modest growth of 2,9% in March, April sales are down 2,2% again, for a total of 1,68 million units. Of course, this is still the second-best ever April figure, and the YTD total now stands at 7,54 million, an increase of 3,8% on the first four months of 2016. The Seasonally Adjusted Annualized selling Rate stands at 21,4 million in April, the lowest figure in the past 12 months. Sales of vehicles with engines of 1,6 liters or less fell 10% to 1.14 million, after the central government phased out a tax break on these models at the beginning of this year. SUVs and crossovers are once again the main (and only) winners in April with sales up 10% to 674.000 units, while sedans sales decline for the second consecutive month at -7,3% to 840.000 sales and MPVs lose volume for the fourth month in a row at -15% to 153.000. New Engergy vehicle sales improved 7,9% to 34.300 units, as EV sales gained 19% to 28.500 units but PHEVs plunged 27% to 5.800 sales. The share of domestic automakers dipped below 42% for the first time since last August as they benefitted the most from the tax cut on small vehicles.

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China car sales analysis March 2017

China-car-sales-graph-march-2017After a stable January, and a promising 20,2% gain in February 2017, March car sales in China are back to modest growth with a 2,9% increase to just over 2 million units. To put that small year-on-year growth into perspective: March 2012 sales just topped the 1 million units, so the market has doubled in 5 years time. In that light, a 3% improvement is quite a slowdown. Then again, first quarter sales are up 6% to 5,78 million and that’s on par with expectations, as sales growth was expected to slow down into the single digits after the tax increase on cars with engines of 1,6 liters or smaller, which made up over 70% of total sales last year. The Seasonally Adjusted Annualized selling Rate stands at 23,5 million in March. SUVs and crossovers are the main (and only) winners in March with sales up 20% to 832.300 units, while sedans surprisingly show a loss of 4,9% to 990.200 sales (first quarter sales are up just 0,8%), and MPVs lose volume for the third month in a row at -15% to 199.300. The central government cut EV subsidies last January but when sales plummeted to almost a halt that month, the subsidies were quickly reinstated, and as a result Sales of New Energy vehicles (EVs and PHEVs) jumped 36% in March to 25.342 EVs and 5.778 PHEVs, but the Q1 figure is still down 4,7% to 44.333 EVs and 11.596 PHEVs. After domestic brands broke a new record share of 46,5% in February, foreign automakers struck back in March with their locally produced models as the share of the domestics dropped to 43,6%.… Continue Reading …