After looking at the July and August 2019 brands ranking for Europe, lets zoom in on the models ranking. In July Volkswagen monopolizes the podium, with the Golf, Tiguan and Polo in the top-3 spots, a feat which only happened once before in modern history, in July 2018. The three VWs are followed by the Dacia Sandero which equals its European ranking record at #4, also hit in November 2018 and May 2019. The Renault Clio is the big loser in the top-10 due to the changeover to the new generation, while the Opel/Vauxhall Corsa makes it four subcompacts in a row. The Volkswagen T-Roc is in the top-10 for the second time ever, after last February, making it 4 VW models in the top-10. The Toyota Corolla impresses at #14, the highest ranking for the nameplate in at least 2 decades and almost knocking down the Yaris of its throne as the brand’s best seller in Europe, a title it held since 2000. [Read more…]
After looking at the June and first half 2019 brands ranking for Europe, lets zoom in on the models ranking. Eternal best seller Volkswagen Golf is due fora redesign and loses volume for the 10th consecutive month. In fact, the Renault Clio has never been closer to taking the #1 spot in Europe, with a gap of just 1.500 sales between Europe’s two best selling cars. And the Clio is right in the middle of a changeover to the new generation, with June sales still mostly representing the outgoing model as well as the first demo registrations of the fifth generation Clio. To complete the good news for Renault in the ranking, the Captur jumps to equal its highest position ever in third place, making the podium exactly the same as the only other time this happened, in December 2017. [Read more…]
The stagnation of the Chinese car market has continued in the second quarter of 2019, with double digit declines in April and May, and an 8,3% loss in June, which market the 12th consecutive month of declines. In the first half of the year, just under 10 million new passenger cars were delivered to Chinese dealers, nearly 15% fewer than in the same period last year. These figures exclude commercial vehicles, minivans and imported cars. In the short term, the Beijing government is not planning any incentives to prop up the market, and in fact is sharply reducing subsidies on one of the fastest growing segments of the Chinese car market: that of EVs and plug-in hybrids. Rather, the government seems to see this market contraction as an excellent opportunity to consolidate the market as (too) small players will be forced to close down or be taken over, while the larger state-owned carmakers also feel extra pressure to merge their operations and cut loss-making domestic brands. Also, China’s central government has pressured most major cities and provinces to adopt State 6 emissions rules (which are similar to the Euro 6 standards) on July 1. This caused local dealerships to offer steep discounts on vehicles that don’t meet these standards. The upside of this is that by now most dealerships have reduced their inventory so there’s hope that the second half of the year will be a whole new ballgame.
After six months of double digit declines, the Chinese passenger car market slows its downfall with a 9,6% loss of sales in March 2019. That marks the ninth consecutive month of year-over-year losses, but nonetheless a modest bright spot for the world’s largest car market. In March, a total of 1,93 million domestically produced passenger cars were sold in China, which brings the Q1 total to 5,15 million sales, down 14,4% on Q1 of 2018. These figures exclude commercial vehicles, minivans and imported cars. In the short term, the Beijing government is not planning any incentives to prop up the market, and in fact is sharply reducing subsidies on one of the fastest growing segments of the Chinese car market: that of EVs and plug-in hybrids. Rather, the government seems to see this market contraction as an excellent opportunity to consolidate the market as (too) small players will be forced to close down or be taken over, while the larger state-owned carmakers also feel extra pressure to merge their operations and cut loss-making domestic brands.
After looking at the February 2019 brands ranking for Europe, lets zoom in on the models ranking. Eternal best seller Volkswagen Golf is one of the biggest losers in the top-10, just behind the Ford Fiesta as both lose by double digits. The Renault Clio is back into its #2 spot although the Volkswagen Polo is growing faster. Still, the Clio’s continued progress is impressive considering the new generation was introduced at the Geneva Auto Show early March and will be in showrooms later this year. The Citroen C3 takes a record fourth place, outselling its sibling Peugeot 208 for only the third time since the launch of the latter in early 2012. The only other two times the C3 was ahead were in August and December 2018, but it was never as high at 4th. The only crossovers in the top-10 are both from VW, with the Volkswagen Tiguan in 5th place and the Volkswagen T-Roc in 8th place. [Read more…]
The market for domestic passenger car sales in China continues its decline in 2019 with 8 consecutive months of declines from July 2018 to February 2019. With two months of double digit declines in January (-16,7%) and February (-17,6%), the market doesn’t seem able to recover soon. However, there’s a silver lining to this apparent malaise, as these numbers reflect wholesale data. Retail sales of new light vehicles dipped just 4% in January, which means the big drop in wholesale deliveries was a result of a reduction in dumping excess inventories by carmakers on their dealerships. [Read more…]
After looking at the January 2019 brand sales ranking, let’s take a closer look at which models were moving up the charts. As happened last in July 2018, Volkswagen takes the top two positions with the Golf (down 22,8%) and the Polo (up 9,1%), with the Renault Clio down to third place after three consecutive months (and the full year 2018) in second place. The Clio is down 8,9% as the next generation will arrive in showrooms this year. In fourth place we find the Toyota Yaris, equaling its personal best position also scored in September 2018. Since its launch in 2013, the current generation Yaris has consistently improved its sales every year, an impressive performance even though it’s still below the peak of the nameplate’s sales in 2007. The Volkswagen Tiguan is in fifth place, down 13,1% with the Ford Focus in sixth place for the second consecutive month, thanks to the new generation. The Fiat Panda makes a surprise return to the top-8 thanks to sales up 21,5% with all of the growth coming from its home market Italy which accounted for 81% of Panda sales in January. That leaves the Peugeot 208 down into 9th place, just ahead of its stablemate Citroën C3.
After looking at 2018 European car sales by manufacturer and brand, let’s take a deeper look into how individual models sold last year. It shouldn’t come as a surprise that the Volkswagen Golf is still the dominant leader in Europe, for the 11th consecutive year. However, the Golf was the biggest loser in the top-18 with a loss of 7,6%, which translates to roughly 37.000 fewer sales. [Read more…]
Last year BYD sold more New Energy Vehicles/NEVs than any other company in China. According to a ranking of the Top Twenty Selling NEVs in China, BYD sold more EVs and PHEVs than any other manufacturer. Cumulatively, the company sold 205,800 NEVs and dominated the list (see below) by placing 2nd, 4th, 6th, 8th, and 9th among the top twenty.
Top 20 Selling EVs/PHEVs in China
December 2018 and 2018 (full year)
BYD Quin PHEV (Gen I and II)
JAC iEV S/E
BYD Song PHEV
BYD Tang PHEV (Gen. I & II)
BYD Yuan EV
SAIC Roewe Ei6 PHEV
Geely Emgrand EV
SAIC Roewe Ei5 EV
SAIC Baojun E100
SAIC Roewe eRX5 PHEV
Donfeng Junfeng Skio
BYD’s best sellers included two sedans, the Quin PHEV and the more recently launched e5 450, also known simply as the e5. The price of a Quin PHEV in China is about 185,900 RMB ( approx. $27,600). With a top speed of 185 km/h (115 mph) and the ability to accelerate from 0-100 km/h in just under 6 seconds, the Quin PHEV (pictured below) does not lack in terms of power. When running purely on its 13kWh battery, the sedan has a maximum range of 70 kms.
Inside the car is a 12.3 inch screen with access to navigation systems, multimedia entertainment, and real time fuel economy information.
A number of convenience factors are built in, including smart-key functionality, tire pressure monitoring, and the ability to remotely control the car from outside the vehicle – – for example – – in low speed mode, while positioning or guiding the car into a parking space.
BYD’s other best seller is the e5, a pure (battery only) EV sedan which was originally launched at the 2015 Shanghai motor show. Partly because of its affordability, the e5 has been a popular choice among taxi cab operators.
The “after subsidies” price of the e5 in China is 140,000 RMB (approximately $20,760). The sedan has a fairly long range of 405 km. (253 miles) and a maximum speed of 130 km/h or 81 mph. The battery capacity is 60.48 kWh, and can be fast-charged to an 80% level in 90 minutes.
Inside is a fairly small touch screen, allowing access to the navigation system, multimedia entertainment, internet connectivity, etc.
BYD is a pioneer in China’s NEV industry, yet is often known by Westerners as “the Chinese Electric Vehicle company that Warren Buffet has invested in.” The company makes both NEVs as well as conventional cars (i.e. cars powered by the Internal-combustion engine/ICE). For the year 2018, BYD sold more conventional cars in China (281,991) than NEVs (225,136), however, the gap between these vehicle types is closing. Last year represented a major rise in the number of New Energy Vehicles sold by BYD, while sales volume for conventional cars continued to drop, as can be seen in the graph below.
Within the NEV category it is also interesting to look at the breakdown between EVs and PHEVs, to get a better understanding of growth rates and trends. During the last two years, pure electric vehicles have surpassed Plug-In Hybrid Electric Vehicles (PHEVs), as a percentage share of BYD’s NEVs sold. The growing importance of pure electric vehicles (EVs) can be seen in the graph below.
From a more macro perspective, this year (2019) marks a major development for the automobile industry in China because car manufacturers will be required to comply with new government policies and regulations designed to address air pollution, carbon emissions, and global warming. This will have major implications not only for BYD, but for all manufacturers in terms of their production, and more specifically, the mix of their output in terms of ICEs and NEVs produced. For an excellent overview and explanation of what the new policies and regulations mean for the industry and manufacturers, readers will want to consult the Bloomberg quicktake article “China is About to Shake Up the World of Electric Cars.” In short, manufacturers will have three choices:
- produce more NEVs to meet quotas, that are specific to each manufacturer, as determined by the new regulations,
- don’t meet the quotas but comply with the policy by purchasing carbon-credits from other NEV producers (i.e. competitors) whom have earned surplus carbon credits,
- face stiff and costly fines and penalties for doing neither 1) nor 2) above.
BYD, as a long established leader in China’s NEV market is well positioned to not just comply with the new government policy and regulations, but to generate substantial revenues from selling its surplus carbon credits on the carbon market. Such revenues would be particularly valuable to a company like BYD, or any manufacturer for that matter, because they contribute directly to the company’s bottom line profits and corporate value.
Within the context of China’s new policies and regulations, not all manufacturers are so well positioned as BYD. As seen in the Bloomberg graphic below some of the giants of the industry, for example Toyota, Ford, and General Motors; appear much less prepared. The score shown below is an EV Exposure Index, created by Bloomberg’s New Energy Finance team, which “rates car makers for their readiness for electric vehicles”.
BYD’s success producing and selling NEVs extends beyond sedans, SUVs, crossovers, etc.; or what we normally think of with regards to “passenger vehicles”. One area where BYD has been particularly successful is in the bus business, and more specifically producing and selling electric buses. BYD has delivered more than 35,000 electric buses globally, and has factories around the world in countries such as the UK, France, Hungary, Brazil, and the US.
Financially, 2018 has been a difficult year for BYD. Although full year 2018 financial results are not yet reported, based on BYD’s 2018 Third Quarterly Report here, it is clear that relative to 2017; profits for 2018 will be significantly lower.
BYD attributed lower expected profits to intense competition, as well as lower government subsidies, according to a Reuters article, which noted that 2018 profits could fall by about a third compared to the previous year.
Despite these challenges, BYD as a company ended its third quarter of 2018 sounding enthusiastic and bullish about its NEV business, and its future. BYD’s third quarter report included a “Forecast on the Results of Operations in 2018”. Below is an excerpt from that forecast:
The new energy vehicle business of the Group is expected to continue to maintain strong growth and drive the rapid recovery of the profits of the Group in the fourth quarter. In respect of new energy passenger vehicle segment, new models have accumulated a large amount of orders relying on their strong market competitiveness and their sales are expected to record significant increase compared with the same period of last year due to the easing of battery capacity bottlenecks.
Battery capacity bottlenecks, appears to be a reference to BYD’s battery supply chain, which it continues to invest heavily in. These investments involve not only new battery plants and factories, but also the rights to a guaranteed supply of lithium, from mining operations. Consider the following:
In January of 2018 Chinese media outlet Xinhua reported that BYD has signed a deal with a mining operation in Qinghai province to secure a supply of 30,000 tonnes of lithium carbonate.
In June of 2018, BYD’s opened its third battery plant, also in Qinghai province. The plant’s annual capacity is 10 GWh. The cost of BYD’s new factory is 4 billion RMB, or approximately $633 million dollars.
In August of 2018, BYD signed an agreement with the local government of Chongquing in Southwest China, to build a new battery plant at a cost of approximately 10 billion yuan, or $1.5 billion dollars. The Chongquing plant will have an annual capacity of 20GWh.
In September of 2018, BYD announced its plan to build yet another battery factory in Xi’an, the capital of Shaanxi province. The annual capacity of this facility will be 30GwH, according to an article here, by electrive.
With the three new battery plants referred to above, BYD will have a total of five battery plants in China, making the company a major player in the battery business.
In addition to BYD, the other major Chinese owned battery manufacturer competing for dominance in China is Contemporary Amperex Technology/CATL, which like BYD, has been growing in leaps and bounds in terms of its new or planned battery manufacturing capacity. BYD is planning to reach a total capacity of 60 GWh by 2020, while the corresponding figure for CATL is even higher at 88 GWh.
Benchmark Minerals, a company that specializes in the lithium ion battery supply chain
has recently produced an excellent analysis that poses the following rhetorical question: Who is Winning the Global Lithium Ion Battery Arms Race?
The graph to the left shows the Top Five Lithium ion Battery Producers by Capacity. Both CATL and BYD rank 2nd and 3rd respectively – – behind South Korea’s LG Chem, the global front-runner – – and ahead of Japan’s Panasonic and America’s Tesla – – two better known name-brand competitors.
Although most of the batteries produced by BYD’s factories will likely be inputs into its own cars, some of these same factories will also be supplying other automobile manufacturers – – including BYD’s real or potential competitors. For example, in March of 2018 BYD announced that it would be supplying Changan Auto, as reported here, in an Automotive News China article.
Much of the content above suggests that BYD will continue to ramp up its production and sales of New Energy Vehicles. Given the dynamic and innovative nature of the company, BYD will undoubtedly be an interesting player to watch during 2019, and well beyond.
For a complete list of sources and references used in this article; click here.
Full disclosure: I currently do not own shares in BYD, or any other company mentioned in this article.
After discussing the 2018 China car sales ranking by brand, let’s zoom in on which models were the movers and shakers of the past year. And the Chinese car market is not only one of the most diverse with no less than 575 different nameplates in our ranking up from 531 in 2017 and 502 in 2016, but also one of the most dynamic, with big movements [Read more…]