For years, analysts have predicted a slowdown of Chinese car sales. After becoming the world’s largest market in 2013, outpacing the United States, it was believed the market could not sustain its impressive growth record. Then halfway through 2015, the critics finally appeared to find reality on their side, when Chinese stock markets suddenly crashed and the economy stalled. Add to that a government crackdown on corruption and the recipe for a slowdown in car sales was ready. However, the central government stepped in and lowered the sales tax for vehicles with engines of 1,6 liters or smaller from 10% to 5%, starting from Q4 of 2015. That helped car sales peak recover and 2015 set yet another sales record of over 20 million passenger car sales. In 2016, the tax break continued and the market grew further, adding another 17% to 23,6 million sales.
Country of origin
60% of the growth came from domestic brands, as 9,8 million of the 23,6 million sales bore a badge from a Chinese brand, a record 41,4% of the total market. The previous record was 38,1% in 2015, which means local brands added 3,3 percentage points of share in a single year. Chinese brands increased their sales by 27,4%, more than double the growth rate of any of the other countries, as all saw their shares reduced. European brands took the biggest hit, losing 1,5 percentage points of market share to 5,3 million sales, with PSA Peugeot-Citroën as the biggest cause of concern. The American brands did best of the rest, losing just 0,4 percentage point of share to 2,96 million sales. Japanese brands sold 3,8 million cars in China in 2016 and South Korean brands sold 1,8 million units. All figures are for locally produced models only and exclude imports, which make up just 5% of the Chinese car market.
Fueling the growth as well as the shift towards local brands has been the demand for low cost crossovers. Local manufacturers have quickly played in to this demand by launching a flood of cheap crossovers at a pace no global brand could keep up with. As a result, sales of crossovers and SUVs surged 41,5% to 8,8 million in 2016, while deliveries of traditional sedans (including hatchbacks and station wagons) grew by just 3,1% to 12,1 million, after showing a shock decrease in volume in December. MPV sales increased 17,9% to 2,6 million. Sales of domestic crossovers did even better at +50,6% to over 5 million units. Read more about the success of these models in our success stories of 2016 article.
In 2016, 93 new nameplates were launched in China, an average of almost 8 per month. Of these new nameplates, more than two thirds (65 to be exact) were from domestic brands and half of the new nameplates (47 models) were crossovers, 36 were sedans and 10 MPVs. The best selling newcomer in 2016 is the Hyundai Elantra Lingdong with 132.210 sales, followed by the Chery Arrizo 5 with 128.932 sales and the Geely Boyue with 109.209 sales. All three were launched in March. Looking at average monthly sales, the Roewe RX5 is the most popular new nameplate with just over 15.000 monthly sales since its launch in July. It’s followed by the Hyundai Verna Yuena (New Verna) with 13.500 monthly sales since October and the Elantra Lingdong with 13.200 monthly sales.
We also welcomed 5 all-new brands in 2016, all with a Chinese background, the most successful being the rebirth of the German Borgward brand with 30.000 sales of its BX7 crossover since July, followed by SWM Motor with 25.700 sales of its X7 SUV from September and Hanteng with 16.120 sales of its X7 SUV (I know, it’s a popular name…) since October. Bisu, a brand with ties to Beijing Automotive (BAIC) sold 2.900 units of its two models M3 MPV and T3 crossover in December, while Qiteng sold the same number of its EX80 MPV since January. Three foreign brands started Chinese production with a local partner in 2016 as well: Dongfeng-Renault was the most successful, selling 30.000 units of its Kadjar (since March) and Koleos (since November) crossovers, while GAC-Acura sold 6.800 copies of its CDX China-exclusive crossover since August and Chery-Jaguar sold 5.600 units of its long wheelbase XFL since September.
We usually don’t publish a brand ranking for China, because the data only includes sales of locally produced models and exclude imports, which can be a bit misleading sometimes. For example: Audi sold a total of 591.554 vehicles in 2016 (+3,6%), compared to BMW‘s 516.355 sales (+11%) and 472.844 (+27%) for Mercedes-Benz, but in the ranking below you can see that the latter two have a higher share of imported vehicles in those figures, which distorts the comparison. The only other brands we have import sales available for are Nissan (total 1,35 million, up 8,4%), Honda (total 1,25 million, up 24%) and Toyota (total 1,2 million, up 8,2%), and again this looks much different from the picture painted when only looking at locally produced models with Nissan trailing its two rivals. Keep this in mind when analyzing the stats below.
Volkswagen retains its titel of best selling brand in China, even though it loses market share as it grows slower than the overall market. Still, for the first time ever VW tops 3 million sales from its two Joint Ventures with FAW and SAIC , and China remains its biggest market by far. Buick holds on to the #2 spot thanks to an 18,8% increase. The brand sold just over 1 million more cars with its partner SAIC than it did in the US in 2016, but Honda and Changan are closing in quickly, both with sales up 22% or more. Hyundai (+7,4%) is kicked off the Chinese podium by these two fast-growing brands, which also pass Toyota (+5,4%), as both brands lose a significant chunk of market share. Nissan is closing in on its Japanese rival as well with sales up 13,9%. These 7 brands all sell over a million units in China. Ford misses that mark by 50.000 units and adds just 9,3% to its volume. The biggest gainers in the top-10 are Haval (+41,6%) and Geely, which makes an entrance among the 10 best selling brands in China with sales up 46,3%. That means Wuling is kicked down from #9 to #14 with sales down 1,7% (and the only brand in the top-15 not to set a new sales record), overtaken by Baojun ( +51,2%), BAIC (including Huansu, +35,7%) and Dongfeng (+26,7%). These four brands also pass Kia (+5,5%), but the latter stays in the top-15 as Chevrolet loses 5 spots with sales down 15,4%. GAC Trumpchi gains 11 places to enter the top-20 with sales almost doubled, while Peugeot is kicked out of the top-20 with sales down 14,1%, being threatened by Skoda (+18,1%).
Zotye benefits from its controversial design at +54,2% as many Chinese car buyers apparently don’t care about copyright infringements. Mercedes-Benz (+28%) passes BMW (+8%) in sales of locally produced models, but still trails in total volume as you’ve seen above. Citroën loses volume for the second consecutive year and is back to below its 2013 volume and its lowest market share since its arrival in China in the mid-80s at just above 1%. SAIC Roewe (+142,2%) enters the top-30 at the cost of FAW (-17,8%), while Brilliance has been unable to keep up its fast growth from the first quarter to end 2016 virtually stable.
Suzuki is the biggest loser in the brands top-50 with sales down 21,5%, which means it lost a third of its market share in 2016. Jeep has been one of the best selling import brands in China and finally started local production of no less than 3 of its smaller models in a Joint Venture with Guangzhou Auto (GAC), which already produced cars for Fiat. And while the two Italian models are commercial failures, Jeep has hit the jackpot, with over 100.000 sales of the Cherokee in its first full year and 26.000 Renegade sales in 7 months. The launch of the Compass in December means the brand will grow even further this year, as described in our predictions for 2017 article. Fellow American brand Cadillac has seen its sales double, helped by the introduction of 2 new nameplates and continued improvement of its existing models. China is bound to become Cadillac‘s biggest market and depending on whether it can keep up this rate of growth, that will happen either this year or next. Volvo has had a transition year in 2016, preparing for the arrival of the highly anticipated S90 flagship, which arrived in showrooms in December.
Mitsubishi, which lost two thirds of its volume in Q1, has recovered nicely in the second half of the year thanks to the addition of the Outlander for local production with partner GAC, and sales were down just 5% for the year. We also finally got our hands on sales figures of the locally produced Land Rover models with JV partner Chery: over 50.000 units in 8 months time. Unfortunately we haven’t been able to find data from before May, even though both models have been sold since 2015.
Great Wall, having enormous success with its Haval SUV brand, has reduced its namesake Great Wall passenger car brand to just a single model and is likely to continue focusing on Haval in the future. Qoros has finally had a (kind of) breakthrough with sales up 70% thanks to the Qoros 5 SUV, but the 24.000 sales still are far from its ambitions and its production capacity of 150.000 units.
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