In 2018, light vehicle sales in China declined for the first time since 1990, as 23,27 million passenger cars were sold, 4% fewer than in 2017. Including minibuses and light and heavy commercial vehicles, the total car market in China declined 2,8% to 28,1 million in 2018. Sales of new energy vehicles (battery electric, plug-in hybrid and fuel cell vehicles) jumped 62% to 1.26 million, with a share of 4,5% of the total car market. Of these, 984.000 were EVs, 271.000 were plug-in hybrids and 1.527 were fuel cell vehicles.
Domestic brands declined the most at -5,8% while sales of domestically produced cars from import brands declined by just 2,6%. As a result, after four consecutive years of growing their share of their domestic market, Chinese brands lose ground agains foreign rivals again. In 2014, domestic brands held just over one third (33,6%) of their home market, a share they’ve managed to grow to 42,4% in 2017, before dipping to 41,6% in 2018. Among import brands, the US is the big loser with a decline of 18,9% mostly due to sinking sales at Ford. American brands now hold 10,6% of the Chinese car market, the lowest share since 2003. European and Japanese brands actually managed to improve their sales of domestically built cars in China, by 1,3% and 2,5% respectively. European brands now hold 23,9% of the market, back to their 2015 but still below the record of 25,9% in 2014. Japanese brands improved their share to 18,8%, the highest since 2012 but still well below their record of 27,7% in 2008. Even South Korean brands saw a light rebound of 2,7% in 2018 after suffering a 35% dip in 2017. Their share returned to just above 5% fo the market, still the lowest since 2003 as well.
For the first time in a few decades, sales of crossovers and SUVs in China have declined as well, down 1,1% to 9,8 million, improving their share of the market to 42,4%, a new record. The share peaked at 44,2% in December. Sedans also improved their share of the Chinese market despite a slight decline of 1,9% to 11,6 million, translating to 49,9% share. That means MPVs were the big losers in China last year, with sales plummeting 22,8% to 1,7 million, the lowest volume since 2013. Their share shrank to just 7,5% of the market, the lowest since 2012, before China’s best seller in recent years, Wuling Hongguang was reclassified as an MPV.
So European brands actually still did pretty well in China last year, and the dominant market leader Volkswagen saw a tiny decline of 0,3% to improve its stranglehold on the market to 13,4% as the brand enjoyed a third consecutive year above 3 million sales. Sister brand Audi holds on to its title of best selling luxury brand in China despite showing the lowest rate of growth among the German Big 3 luxury brands. Audi’s sales of 620.000 domestically produced cars reflect an increase of 13% on 2017, while Mercedes-Benz improved 15,1% to 513.000 domestically produced cars, but BMW outpaced them both again, growing 20,8% to 465.000 sales. However, including imports (not reflected in the table below), the picture is slightly different as both Audi and Mercedes-Benz (including Smart) improved their sales 11% to 663.000 and 653.000 respectively, but BMW (including Mini and Rolls Royce) lagged at +7,7% to 640.000 deliveries.
Volvo’s China sales rose 19% to 107.600 last year (+14% to 130.600 including imports), while Jaguar-Land Rover suffered severe losses in what used to be its biggest market. Sales of Land Rover’s domestically produced models declined 34,3% to 40.500 as the Evoque is due to be renewed, while Jaguar improved 22,2% to 27.300 sales thanks to the addition of the XEL and E-Pace. However, the huge profits JLR had gotten used to came from the thousands of imported Range Rovers with margins of as much as £60.000 a piece, and those days appear to have come to an end with total JLR sales in China declining 31,3% to 77.500 in 2018, which means China has gone from the company’s largest market in 2017 to #4 behind North America, mainland Europe and the UK.
French brands didn’t fare very well in 2018 either as PSA continued to struggle in the world’s largest car market. Peugeot are down 44% in 2018, making it the fourth consecutive year of declines for a total of -66%, with market share down from a peak of over 2% in 2014 and 2015 (and over 400.000 sales in 2015) to a mere 0,6% in 2018. Citroën has performed only slightly less dramatic, also down for the fourth year in a row for a total of -64,4% with share down from 1,75% in 2014 (and 320.000 sales) to less than 0,5% with fewer than 114.000 sales. It’s safe to say that DS has miserably failed in China, with sales down another 33,9% to fewer than 3.900 deliveries. Except for the all-new DS7 Crossback, none of its four sedans and hatchbacks have sold more than an average of 50 units per month in 2018. That means Skoda now sells more cars in China than all three brands of PSA combined, while as recently as 2015 the Czech brand sold fewer cars than Peugeot and Citroen each. After a relatively successful launch of local production in 2017, Renault has found itself struggling to maintain momentum in 2018, with sales of its two crossovers down 30,6% to just over 50.000.
With the Chinese and American governments locking horns about tariffs, car exports between the two countries are not only jeopardized by higher tariffs, but also by the incertainty and instability caused by these brawls. Sales of locally produced models by the American brands are also down sharply. In fact, American brands are responsible for 60% of the total volume lost in the Chinese market in 2018. And the grief is shared among all three automakers with domestic production, although not equally: General Motors reports a 2% decline in sales as Buick, its biggest brand in China, suffers a drop of 13,6% in deliveries to just over one million cars. This loss is almost offset by gains at Chevrolet and Cadillac. The former is 11,6% for a second consecutive year of double digit gains after a forgetful 2015 and 2016 when the brand lost 130.000 annual sales in two years time, as well as almost half its market share as the market continued to grow at a fast pace. Chevrolet is almost back up to its 2015 market share of 3,2% but still way off its record share of over 5% in 2011 and 2012. Cadillac sets a sixth consecutive annual sales record in China, surpassing 200.000 sales for the first time ever and closing in on 1% market share.
Ford really has a problem in China as its models are aging and sales are falling fast, with a 54,3% drop in 2018, the largest decline in the top-60 brands ranking. This translates to more than 450.000 fewer deliveries from one year to the next, and an even bigger loss of 570.000 sales compared to 2016. Ford is now outsold in China by brands like Chery, Dongfeng, BAIC and even Kia as it is down into 23rd place in the brands ranking, compared to #8 in 2016 and 2015 and # 6 in 2014. On the other hand, sales of imported Lincolns set another sales record, although deliveries were up a mere 1.200 units or 2,2% as the last four months were down on 2017. Ford will try to recover from last year’s losses China sales by speeding the introduction of new models. Redesigned Ford Focus and Escort sedans were launched in November and in January it plans to launch the Territory, a budget midsize SUV based on an existing platform from Jiangling Motors, which seems like quite a desperate move that could hurt the brand image in the long term. Lincoln will start local production this year as well and plans to roll out three locally produced models in the next three years.
After topping 200.000 Chinese sales in only its third year of local production, Jeep has woken up with a hangover in 2018, with sales down 38,6% to 124.500, fewer even than 2016 when the brand produced only 2 models in China instead of the current four. Worldwide, Jeep continues to be on a tear, with record sales in most markets, most notably its home market North America, but in China the brand has struggled in 2018, which means FCA still hasn’t managed to secure a significant footprint in the world’s largest car market, as currently none of its other brands have domestic production or a meaningful number of imports to China.
Honda sets a sixth consecutive year of record sales in China, closing in on 1,5 million annual sales and holding on to its #2 spot in the brands ranking, but its Japanese rivals are closing in on Honda, with both Toyota and Nissan also setting sixth consecutive years of record sales thanks increases of 9,3% and 5,3% respectively. Both brands have also surpassed Buick in the brands ranking, moving up to #4 and #5. Among the smaller Japanese brands, Mazda is struggling with a 13,8% decline to just under 275.000 deliveries, while Mitsubishi gains 17,5% to 141.000 sales, a new record for the brand in China, which has a crossover-only line-up. Suzuki has announced it will pull out of China and has stepped out of its production joint ventures with Changhe and Changan
After a dramatic 2017, the South-Koreans stabilize in 2018, with Hyundai sales up 0,7% or 5.300 units and Kia sales up 7,2% or 35.000 units. These are still the second-worst scores since 2011 and 2010 respectively, but at least the brands have stopped bleeding out. However, as you will see in our models analysis, there are still some issues for the brands. For starters, the Hyundai Encino (sold as the Kona in other markets) has been an utter failure, selling fewer than 300 units per month on average since its launch month, as the brand failed to tailor the model to specific Chinese tastes and requirements. Dealers are complaining the most about lack of space in the rear seats, whereas other brands offer stretched versions of their models in China for specifically this reason, for example the Citroën C4 Aircross which is a China-only elongated C3 Aircross.
Furthermore, sales have shifted towards the brand’s low-cost models, as the New Verna small car (priced from 72.800 yuan) was down by more than half, while the cheaper Reina (priced from 49.900 yuan) improved slightly, and similarly sales of the Tucson compact crossover (priced from 159.900 yuan) also declined by more than half, while the ix35 compact crossover was up thanks to an update of the model that’s still based on a 9-year old platform and starts at 119.900 yuan. Similarly, at Kia most of the brand’s gain comes from the updated Sportage R which is based on the same old platform as the Hyundai ix35. So while volume has picked up again for both brands, profits and brand value are still in the tank, not a great long term strategy for the brands and one that certainly won’t bring a change to their failure to shed their low-cost image in China, as opposed to other markets where they’ve been able to move upmarket.
Geely has seen its impressive growth rate slow down but still managed to improve its sales by double digits, making it the most successul brand in the top-10 once again. It’s closing in on the #2 overall spot in the brands ranking and improved its market share to 5,9%. For reference: that makes Geely bigger worldwide a bigger brand in terms of volume than Mitsubishi and closing in on Mazda. Until last year, Baojun was almost as “hot” as Geely, but the SAIC-GM-Wuling brand has faltered in 2018 with sales down 13,9%, its first annual decline since its launch in 2010. On a more positive note: it still sold almost 900.000 vehicles and it the second largest Chinese brand, ahead of Changan, the former #1 domestic brand, which sees its sales decline by with double digits for the second consecutive year. The fourth Chinese brand in the top-10 is Great Wall’s Haval, with sales down almost 10%, and this decline was not completely offset by the gains at the more upmarket Wey brand, as the net loss for Great Wall is still 30.000 sales. GAC Trumpchi manages to improve once again, which means it has improved its sales every year since its launch in 2011, but its 5,5% increase is dwarfed by the next two players: BYD and SAIC Roewe, up by 25,7% and 23,9% respectively. BYD benefits from the ever-increasing demand for New Energy vehicles, while Roewe has introduced a number of successful new or updated models. Its sister brand MG benefits from the same, with sales more than doubling to surpass Mazda to enter the top-25. Struggling domestic brands are Dongfeng (-31,1%), BAIC (-22,8%, with Huansu down 40%) and Zotye (-25,3%).
Among upmarket domestic brands, Wey has proven the most successful so far with almost 140.000 sales in 2018, followed by Geely’s Lynk & Co with over 120.000 sales. In contrast, Borgward is struggling with sales down 25,8% to just under 33.000 deliveries in 2018. Notable movers among the smaller Chinese carmakers are the rejuvenated Qoros with sales up fourfold, while most smaller brands were struggling to maintain relevance with double digit declines on their already low volumes. Some outtakes are Haima (down 35% to 89.000 sales), Lifan (down 46% to 58.000 sales), Bisu (down 44% to 26.500 sales), Landwind (down 56% to 18.800 sales) and Luxgen (down 48% to 9.300 sales). In coming years there will be a consolidation among brands and/or a significant number of brands will disappear altogether as selling fewer than 100.000 cars a year just isn’t sustainable.
In 2018 we’ve welcomed no less than 13 all-new brands to the Chinese market, and one revived brand. All were domestic brands and only one has managed to sell (just) over 40.000 units in its first partial year. Jetour (by Chery) has been the most successful, selling 40.000 cars in only its first four months of sales, followed by Zotye’s Traum brand, shich sold just under 22.000 cars since its launch in January 2018. A lot of newcomers have focused on an EV-exclusive strategy, with Nio covering the higher segment, Xpeng and Arcfox covering the semi-premium part of the market and YGM (Yogomo), Yudo, Neta and Link Tour going for the value customers. GAC-Honda has relaunched Everus, which used to make a low-cost rebadged sedan based on the Honda City to become an EV-only brand selling a rebadged and electrified Vezel (HR-V).
China brands ranking 2018
Please note these figures are for locally produced models only (unless stated otherwise), they exclude imported cars, which make up only a small portion of sales in China.
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