It’s only fitting to see the Chinese car market end 2016 with yet another sales record broken: for the first time in history, more than 2,6 million cars were sold in the People’s Republic in a single month. To put this in perspective: this is almost as many cars as were sold in the UK in all of 2016, and over 900.000 units or 54% more than the 1,69 million cars US auto dealers sold in December, both figures are also records by the way. In relative terms, December’s 9,3% growth rate was the smallest since April and only the third time in 2016 the Chinese car market grew by less than double digits. Part of the explanation for this is that December 2015 was already a monster month, but still the Seasonally Adjusted Annualized Selling Rate came in at 25,1 million units, lower than the 3 months prior, reflecting December is traditionally the biggest selling month for Chinese car dealers. The sales tax break from 10% to 5% on vehicles with engines smaller than 1,6 liters which has fueled the market since October 2015 and which had been anticipated to be cut for 2017 will be phased out slowly to soften the blow next year. In 2017 these vehicles will incur a 7,5% sales tax before going back to 10% in 2018. Still, a more moderate growth rate is expected for 2017, especially in the first quarter. Then again, this is what experts have been predicting for a few years now, and somehow the market keeps proving them wrong.
Sales of crossovers and SUVs have kept their brisk growth rate of 31%, selling 1,05 million units, MPV sales grew 3% to 289.500, but the biggest shock comes from the traditional sedan market, with deliveries down 2,5% to 1,25 million. Until now, carmakers who missed China’s crossover boom (most notably PSA and Volkswagen) could find some consolation in telling themselves that sales of sedans were also still increasing, but this is their final wake-up call: act now or risk losing out on the biggest car market in the world. To underscore this point, sales of local brands have hit a record 45,4% in December, helped by a flood of new, affordable crossovers as also explained in my success stories of 2016 article. More about this in the Chinese brands section below.
In November we saw the Haval H6 become the first crossover to top the Chinese sales charts, while breaking through the 70.000 (and also 60.000) monthly sales barrier for the first time. In December, the H6 grows even further, topping an amazing 80.000 monthly sales. However impressive this performance, it’s not enough to be China’s best selling car for a second straight month, because there’s another model breaking that figure for the first time: the traditional leader Wuling Hongguang MPV with 82.500 sales. This means the two best selling models in China have sold as many units in December as the entire car markets of Italy and Sweden combined! The Nissan Sylphy (aka Sentra in other parts of the world) is once again the best selling sedan in China, ahead of the Volkswagen Lavida. Haval has a 2nd model in the top-6 with the smaller H2, also breaking its monthly sales record at over 35.000 sales, which means the two best selling crossovers in China both come from Great Wall’s SUV brand, which rises to #3 in the brands ranking and #1 domestic brand.
#1 brand in China by a large margin remains Volkswagen, although it’s only the 5th time in 2016 the German brand outgrows the market and gains market share. Audi suffers from a huge dip in December due to the changeover to the new generation A4L, as Audi sales are down a harsh 42% in the last month of the year, barely keeping the brand in positive figures for the year. Its rivals Mercedes-Benz and BMW also see their growth figures tempered with +13,7% and +8,5% respectively. Volvo even shows a slight decline at -1% despite the arrival of the new S90. PSA seems to have caught a break from bad news this month, with Citroën deliveries down only 1,4% as the C3-XR crossover has its best month ever and breaks the 10.000 sales milestone. Perhaps more impressive is its flagship sedan C6 selling over 2.000 units, even better than the venerable C5 did in the same month last year. Peugeot is up for the first time this year at +11,9% thanks to the new 4008 SUV and its 308 and 408 compact sedans, but DS continues to struggle at -40%, it five model line-up now outsold by Jaguar with its single model XFL. Fellow brand Land Rover has its best month this year for its locally produced models Discovery Sport and Range Rover Evoque, and so does Renault with the Kadjar and Koleos, topping 6.000 units for the first time. Contrastingly, Skoda suffers its first monthly loss in 15 months with a 16,7% drop in deliveries.
After topping 100.000 sales for the first time ever in November, Ford dips only just below that figure in December as it shows virtually stable sales. After 10 consecutive months of double digit growth and only single digit growth in November, Buick dips into negative territory for the last month of 2016, at -3,7% as the antediluvian Excelle appears to near the end of its long life cycle. Chevrolet dips back into the red as well after just two months of growth, as the new Malibu and Cavalier can’t make up for losses of the Sail and Cruze. Fortunately for General Motors, Cadillac continues its winning streak, improving its monthly sales record for the fifth month in a row, to over 15.000 sales this time. Despite the arrival of the new generation Compass, Jeep’s third locally produced model, the American SUV brand doesn’t break its record of last month, but still sells an impressive 14.250 units.
For the first time in 21 months, rising star of 2016 Honda shows a loss in December at -12%. However, this is more a result of a huge December 2015 than of a slowdown in 2016, as it’s still the brand’s best month of the year and it’s still 4th in the brand ranking as best Japanese brand. Nissan is plagued by the same issue: down 9,2% on a record December 2015, while Toyota is in more serious trouble, down 13% on the year before and -16% on the same month in 2014. None of the brand’s major models improve on last year, as the Corolla may feel increased competition from the new generation Honda Civic. Mazda extends its winning streak to 8 months with a 21% increase, and Mitsubishi has a fifth straigh month of double digit gains thanks to start of local production for the Outlander. On the other end of the scale, Suzuki suffers its hardest blow of the year at -40% and its lowest December volume since 2008. Looking at the Japanese luxury brands, Infiniti sales are up just 4% but still set a new monthly sales record for its two locally produced models, while Acura sees sales of its first China-only model CDX improve to 1.800 units.
Once again mixed fortunes for Hyundai and Kia: the former increases 14% and rises to the #2 brand in China behind VW, helped by the new generation Elantra Lingdong and the Tucson, while sister brand Kia takes its first year-over-year loss since April at -11,5%. The K4 and the two older generations Sportage and Sportage R are to blame, while the new generation of its crossover, known as KX5 in China, has an off-month too.
As mentioned above Haval, Great Wall‘s SUV brand, has risen to #3 in the brands ranking, ahead of Honda and Buick. Before November, Changan was the only domestic brand to ever have sold more than 100.000 cars in China in a single month, and it was joined by both Haval and Geely that month. In December, a fourth brand joins the 100k+ club: Baojun, the General Motors-SAIC-Wuling brand. This also makes it the first time ever we have 4 local brands in the top-10 brands ranking, with Changan contrastingly down into 10th place despite a still impressive 40% increase on last year. Beijing Automotive (BAIC) ruins the party a bit with sales down 1,8% compared to +35,7% for the year. Wuling and BYD only show single digit improvements, in contrast to Dongfeng, Chery and most notably SAIC Roewe, entering the top-20 with sales up almost triple thanks to the RX5 crossover.
Among recently introduced brands, SWM Motor is the most successful, growing to over 7.000 sales, compared to 6.000 for Hanteng and 5.500 for Borgward. We also welcome another all-new brand, but this will be featured in a separate article. In terms of recently launched models, the Baojun 310 impressively grows even futher, to almost 18.000 sales, the Beijing Senova X35 crossover tops 16.000 sales for the first time, while the Dongfeng Fengguang 580 MPV hits 17.000 sales. The GAC Trumpchi GS8 large SUV (featured at the Detroit Autoshow as the 5-seater GS7), grows to 6.500 sales, while Geely’s recent launches appear to have found their pace, with sales stable on November except for the Boyue crossover, which hits the 20.000 sales milestone. The Honda Gienia grows to 4.300 sales without cannibalizing its siblings City and Greiz, while the new Avancier SUV sells 5.800 units. The Hyundai Verna Yuena (New Verna) improves to 19.000 sales but even combined with the 5.300 units of the old Verna that’s lower than last year’s figure for the latter. The Mazda CX-4 has an off-month, dipping to its lowest figure since its launch last June: 3.600 sales. In contrast, the Mercedes-Benz GLC sells over 10.000 units in its second month of sales, a figure never reached by its predecessor GLK. After a promising start with 5.600 sales in its first month, the Volkswagen C-Trek sells less than half that figure in its second month of sales. The Phideon tops 1.000 units for the first time. Zotye sold 6.700 copies of its Porsche Macan clone SR9.
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