China car sales are up 21,5% in December 2015 to 2.389.313 units, which makes it the third year in a row that December is the biggest month of the year in China. However, we have to note that the volume was artificially boosted by the government temporary tax cut on small vehicles (engines smaller than 1,6 liters) in Q4. Still, the Seasonally Adjusted Annual Rate of 23,7 million units was the highest of the year, and in fact the highest ever recorded in China. However, as the tax cut from 10% to 5% has been suspended on January 1st, we can expect a backfire effect in January.
Chinese brands have benefited the most from both the tax cut and the switch from sedans to crossovers, as the share of local brands has never been as high as in December, at more than 40%. It has to be noted that Chinese brands traditionally score better in the last month of the year compared to their foreign competitors. For example Beijing Automotive Industry Holding Co. or BAIC, has sold almost 17% of its total 2015 volume of its BAW, Huansu, Senova and Weiwang subbrands in December, scoring a nice 8th place in the brand ranking, compared to 15th overall.
Baojun and Wuling, both brands from SAIC-GM, also score nicely this month as the former benefits from record sales of both its 560 crossover and its 730 MPV, which reaches 2nd place in the models ranking. Wuling, which sells the traditional best selling model in China, the Hongguang, also scores its highest volume of the year. Funnily, the two best selling local brands Changan and Haval seem to have an off-month in December, although their year-on-year improvements show otherwise.
Volkswagen is (of course) still the #1 in China with a large margin, and it even scores a nice 32% improvement on last year, although it’s still in negative territory over the full year 2015. Like last year, Honda is in second place vs. a 5th place YTD, and it sells over 150.000 units while the Japanese brand hasn’t been above 100.000 monthly sales this year. Honda‘s 7,5% improvement is also its lowest since March. Toyota is usually the best selling Japanese brand in China, but its sales are down 4,5% in December, giving Nissan the chance to pull ahead as well thanks to a 37% improvement this month.
In the luxury race, Audi lodges its second biggest decline of the year at -11% although that leaves it still way ahead of its nearest rival. And for the third time this year, that is Mercedes-Benz, thanks to a 91% improvement of its locally built models, putting it ahead of BMW, up just 9,7%. Although BMW is still ahead of its challenger for the full year, Mercedes is closing in fast and may come up ahead in 2016.
Last month, local production of the Jeep Cherokee started and this month the model improves to 5.800 sales, compared to about 700-800 monthly units when it was imported. That puts Jeep ahead of Cadillac in only its second month, with plenty of room to grow.
We see continued improvement of EV sales in China, with Denza scoring over 1.500 sales in the last 2 months of the year combined, while the BYD-Daimler Joint Venture EV brand’s previous monthly record was 252 units. The Venucia Morning Wind, a rebadged Nissan Leaf, also hits a monthly record at a humble 295 sales and we see the first recorded sales of the Zhi Dou brand, an EV minicar maker which sells a similar vehicle under the Zotye E20 badge.
Besides the Zhi Dou brand with two (similar) vehicles, we welcome no less than 10 new models to the Chinese car ranking, a record so far. The most successful newcomer is the BAIC Weiwang M30, although that seems to be no more than a facelift of the Weiwang M20. At 23.344 sales, it doesn’t even do that much better than its predecessor, which sold 22.651 units last month, compared to none in December.
That makes the Dongfeng Fengxing S500 MPV the most popular official newcomer, at just over 10.000 sales. It is one of many new Chinese MPVs this year, all hoping to snag a piece of pie from the leading Wuling Hongguang. According to Carnewschina, “City folks are starting to love them because they are bigger and more practical than similar priced sedans and hatchbacks. The small MPV’s used to be popular only in the countryside and third-and-lower tier cities, but they are finding their way to the mega cities now, and they will keep on coming.” Well, that’s obvious, because Changan also launched a new MPV, called the Oushang. It starts at a modest 972 sales, but that will undoubtedly improve in the coming months.
Suzuki has launched the vehicle that may save the brand in China: the new Vitara crossover. Suzuki has been in great trouble this year, losing a quarter of its volume, and even in December the 4.500 Vitara sales couldn’t keep the brand from losing share again, at -4,7%. At least it’s the right type of vehicle at the right time, so let’s hope the Vitara can turn the brand’s fortunes around.
The same can’t be said from the Chevrolet Lova RV, which is a hatchback-station wagon mix based on the Chevrolet Sail. General Motors has taken a page from the VW book with the Gran Lavida and Gran Santana, but the Lova RV exterior and interior design is a flashback to 2006 when the Chevrolet Lova sedan was introduced as a replacement to the Sail. If Chevrolet keeps underestimating the desires of the Chinese car buyers like this, I can predict their demise from China, after pulling out of Europe and Russia already. With Baojun as the budget-brand in the GM stable, and Buick as the mainstream brand, I don’t really see Chevrolet‘s place in the line-up. And neither do the Chinese, as Chevrolet is the biggest loser in terms of volume in all of 2015. And the Lova RV is the perfect testament to what’s wrong with the brand. An ancient “digital” display in the center console with green monochrome digits when even the Chinese brands are fitting their cars with Tesla-sized full-color touch screens? A similarly ancient 1,5 liter 113hp petrol engine mated to a 4-speed (!) automatic transmission, while the local brands are starting to use downsized turbocharged engines now? It’s 2015, Chevrolet! And at 74.900 to 99.900 Yuan, the Lova RV isn’t even as cheap as it looks, either. How they managed to move 4.500 units of them is a miracle to me, but maybe the 3.700 unit decline in Sail sedan sales explains some of it.
Anyways, Changan has another new model this month, besides the Oushang. It’s the CS15 to slot beneath the CS35 and CS75 in the line-up. The trendy-looking crossover features a 1,5 liter four-cylinder engine and a five-speed dual-clutch transmission with prices from 55.000 to 75.000 Yuan. You hear that, GM? Anyways, the CS15 starts at a modest 40 pre-production sales, but should easily shoot up to high four figures in the coming months.
BAIC keeps pushing new product into the market, besides the Weiwang M30 as mentioned above, they’ve also launched a new crossover under the Senova subbrand. Based on the platform of the D50 which is derived from the old Saab 9-3 platform, the X55 slots nicely between the X25 and X65. There’s also an X35 coming up. Meanwhile, BAIC has also launched an all-electric version of the mentioned D50, the appropriately named Senova D50 EV with 159 sales.
Volvo joins the Plug-In boom in China with a PHEV version of its locally built S60L, and scores a nice 289 sales in its first month. Considering plug-in vehicles are exempt from registration limits in some of the large cities, this could be exactly what Volvo needs to finally break through in China.
We finish this report with the Zotye Zhima E30 EV, which racks up 572 sales in its first month, despite looking like a bad copy of the Smart Fortwo. Zotye is one of those local brands that still can’t seem to afford its own design department, as it’s mostly known for taking obvious design cues from Volkswagen. This is a pity, because Zotye is one of the leading Chinese brands pushing heavily into electric mobility, together with BYD, so technologically they’re up-to-date, but they could use some more inspirational design. And then I don’t mean inspiration from other brands.
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