After a stable January, and a promising 20,2% gain in February 2017, March car sales in China are back to modest growth with a 2,9% increase to just over 2 million units. To put that small year-on-year growth into perspective: March 2012 sales just topped the 1 million units, so the market has doubled in 5 years time. In that light, a 3% improvement is quite a slowdown. Then again, first quarter sales are up 6% to 5,78 million and that’s on par with expectations, as sales growth was expected to slow down into the single digits after the tax increase on cars with engines of 1,6 liters or smaller, which made up over 70% of total sales last year. The Seasonally Adjusted Annualized selling Rate stands at 23,5 million in March. SUVs and crossovers are the main (and only) winners in March with sales up 20% to 832.300 units, while sedans surprisingly show a loss of 4,9% to 990.200 sales (first quarter sales are up just 0,8%), and MPVs lose volume for the third month in a row at -15% to 199.300. The central government cut EV subsidies last January but when sales plummeted to almost a halt that month, the subsidies were quickly reinstated, and as a result Sales of New Energy vehicles (EVs and PHEVs) jumped 36% in March to 25.342 EVs and 5.778 PHEVs, but the Q1 figure is still down 4,7% to 44.333 EVs and 11.596 PHEVs. After domestic brands broke a new record share of 46,5% in February, foreign automakers struck back in March with their locally produced models as the share of the domestics dropped to 43,6%.
While the US models top-3 is very stable, the Chinese ranking tends to change from month to month, with the exception of the Wuling Hongguang in the top spot. In March, second place was taken by the Volkswagen Lavida, passing the Haval H6 and Buick Excelle XT/GT compared to last month. The big winner in the top-10 is the Volkswagen Tiguan, helped by the addition of the new generation, which is sold alongside the previous generation (sales figures are combined). As the Sagitar, Santana and Jetta are all down with double digits, VW has only two models in the top-10 this month. Just outside the top-10, both the Geely Boyue and the Dongfeng Fengguang 580 set monthly sales records at 20.461 and 18.775 units respectively, while the Baojun 510 crossover, launched just last month, sells over 18.000 units to instantly become the second best selling model for the brand, behind the 730 MPV. The 510 does appear to cannibalize on the 560 crossover, as the slightly larger model has the lowest monthly volume since its launch at 15.016 sales and is down 64% on its record volume of March 2016. Similarly, the Chevrolet Cavalier breaks its volume record at 16.079 sales, but it has greatly affected sales of sister model Cruze, which is down from 16.558 last year to just 3.402 sales, which means the two models combined gain less than 3.000 units. In contrast to the two models just mentioned, the new Jeep Compass continues to improve with 6.924 sales, seemingly without cannibalizing the other models in the line-up as both the smaller Renegade and larger Cherokee hit their highest volumes of the year so far. Further below, the recently launched BMW 1-Series sedan improves further to 2.145 sales, already higher than the record month of the 2-Series Active Tourer.
Market leader Volkswagen is down slightly for the second consecutive month, as its sedans are all down except for the Bora and Magotan. Official deliveries of the Teramont large SUV have started and it racks up 1.829 sales, which leaves plenty of room to grow. Sister brand Skoda does even worse and drops 18% to 22.691 sales, which means its Q1 sales are now back to the same level as last year after growing 10% in the first two months. Audi continues its struggles in China after a large number of dealers halted orders in January because of Audi’s intentions to set up a second, competing dealer network. As a result, wholesale deliveries fell 16% to 41.500 units in March and the brand lost 12% in Q1. As a result, Mercedes-Benz (up 57% to 37.243 sales in March) and BMW (up 27% to 32.282 sales) are closing in quickly. Keep in mind, these figures above are for locally produced cars only. If we compare total volume of the three German luxury brands, including imports, the figures are shown in the table. From commanding leader for 3 decades, Audi has now fallen to distant third. The dispute has been solved with Audi’s pledge not to go ahead with the second dealer network until the brand reaches 900.000 annual sales with the current network, so expect sales to return no normal levels in the coming months.
PSA will wish it could say the same about its sales, but there’s no quick fix for its troubles in China. Deliveries of its brands have tanked this year after already losing significant volumes last year. Peugeot is down 24% in March to 21.248 sales, only slightly above its volume of March 2012, when the overall market was just half what it was now as you’ve read above. Than means Peugeot’s market share has halved. Even the all-new 4008 SUV (also known as the new 3008 in Europe) has slowed down after a promising start in December and January. But matters are even worse at Citroën, which hasn’t managed to top 10.000 sales in any of the past 3 months. Before this, the last time Citroën sold less than 10.000 cars in China in a single month was February 2009. March volume is down 57% to just 9.497 units, so the new C5 Aircross can’t come fast enough for the brand. However, even PSA itself has admitted that the brand has sunk too low to recover just from the right new products; the relationship with struggling dealers will need to be repaired too, as they’re the brand’s ambassadors. Dare I mention DS? After dropping to a record low last month, PSA’s luxury brand slightly recovers to its second worst month ever at just 534 sales of its four models, down 61%.
Fellow French brand Renault celebrates its first anniversary of local Chinese production, and the brand has sold 44.215 cars in its first 12 months. Now that the line-up exists of 2 vehicles, sales appear to have steadied around 6.000 monthly units, but that’s only half of the factory capacity in China, which stands at 150.000 annual units. That means there’s still some work to be done for Renault to become truly successful in China. Nonetheless, its current volume makes it the best selling “newcomer” in the last year, so I wouldn’t call it a failure either. The other newcomer in terms of local production is Jaguar, now in its 7th month and after a lousy February sales recovered in March, to 1.571 units of the XFL, its second best month yet. Sister brand Land Rover also has its second best month to date for its two locally produced models, at 5.587 units, an increase of 28% on last year.
Ford continues to suffer from the tax increase (technically a reduction of the tax cut) this year, as it loses for the third straight month. A bright spot is that the loss has slowed, from -28% in January and -19% in February to -6,7% in March at 84.217 sales. Especially the Kuga crossover is struggling with sales down by half, while the larger Edge SUV is up by almost half. Rival Chevrolet is starting to stabilize with a loss of just 1,5% in March to 37.021 sales and an increase of less than 1% in the first quarter. Local production of the Equinox crossover will start next month and should give the brand a big boost, this could potentially become one of its best selling models in China. Sister brand loses 5% in March to 92.223 sales, while Cadillac continues to grow fast as sales almost double on last year to 11.281 units. Q1 sales are up 140% for GM’s luxury brand. With a line-up expanded to 3 models, Jeep grows 129% in March to a record 20.661 sales, and the brand has just revealed the Yuntu at the Shanghai Auto Show, its flagship model that will arrive in showrooms next year.
Nothing seems to slow Honda down in China, sales are up almost 30% again to 119.976 units, which means for the past 25 months it has 23 double digit gains, one single digit gain and one loss. As a result, the brand has more than doubled its volume in just 3 years time and is ahead of its rivals Toyota and Nissan in terms of locally produced models. Including imports, Honda has significantly closed the gap between the other two and may overtake them soon if the current trend continues. Toyota improves 8,8% in March to 107.630 sales, while Nissan gains 2,5% to 87.816 sales. Of the smaller Japanese brands, Mitsubishi has been the big winner this year thanks to the start of local production of the Outlander SUV, and the brand more than quadruples its March volume to 11.197 sales, 69% of which are the Outlander. Mazda also does nicely with a gain of 41,3% to 31.340 sales, mostly thanks to its crossovers CX-4 and CX-5, while even Suzuki ends its losing streak with an 18,3% gain as almost all of its nameplates add volume. Q1 volume is still down by 30% and with no real product news, there’s no explanation for a sudden change of fortunes, so we’ll have to keep an eye on its development in the coming months to see if this was a freak month or the start of a recovery. Luxury brand Infiniti adds 6,3% in March to 2.356 sales of its two locally produced models, while Acura returns to four digit sales for the first time this year at 1.059 sales.
The increasing tensions between China and North-Korea on one side and South-Korea and the US on the other side are wreaking havoc on sales of South-Korean cars this year. The diplomatic dispute is about South-Korea’s plans for a missile defense system that China opposes because it claims the radar is capable of penetrating its territory. As a result, several Korean companies have had to deal with regulatory pressure as well as consumer backslash, including Hyundai and Kia. Hyundai has idled one of its Chinese plants from March 24 to April 4 because of slowing sales. Hyundai sales sank 44% in March to 56.026 units and Q1 sales are now down 14%. Even the launch of a new (old) sedan Celesta couldn’t revers this slide. Sister brand Kia is hit even harder as it has been dealing with a dealer dispute since the beginning of the year too. March sales were down 68% to just 16.006 units, the lowest monthly volume since March 2009, and Q1 sales are down 45%. Sales of all of its volume models virtually collapsed this month, with its best selling model K3 affected the least at 6.657 sales, down “just” 48%.
Among domestic brands, Changan remains king of the hill with sales up 17,3% to 123.102 units, with Geely in 2nd place with sales up 74,1% to 87.135, still on track to beat 1 million annual sales this year with 278.970 in Q1. Baojun, Haval and Dongfeng all score single digit gains but beat the overall market, helped by booming sales of some of their models, but held down by others, while Wuling and BAIC see single digit losses in March on the lack of new products for the former and a drop for its Senova subbrand for the latter. The BAIC Huansu subbrand gains more than 25%. GAC gains 41% as its GS8 large SUV tops 10.000 for the first time. BYD loses 5% as its electric cars and plug-in hybrids recover from a disastrous January, but the rest of its line-up slows. Roewe is the big winner among local brands with sales up 177% thanks to the RX5 crossover and its EV version eRX5, but also its new sedan i6. Sister brand MG wins 75% helped by the launch of its second crossover ZS.
China brands ranking February 2017
Please note these figures are for locally produced models only, they exclude imported cars, which make up only a small portion of sales in China.
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