Car sales in China are back in boom-mode in November: after a 15% gain last month, November sales are up 23,3% to over 2,1 million units, the highest monthly figure this year. November sales were helped by the tax cut on smaller models the Chinese government introduced in October, as sales of vehicles eligible for the tax cut totaled 1,56 million vehicles, up 29%. The Seasonally Adjusted Annualized Selling Rate (SAAR) was up from 19 million units in September and 21,8 million units in October to 22,5 million units, close to the January score. As a result, the Chinese car market is up 7,3% so far this year, so although December also expected to be a blockbuster month, it’ll be a stretch to assume we’re going to end 2015 with double digit growth, but nothing is impossible in China. Still, we’re only 772.000 units off the 2014 full year figure, and with over 2 million sales expected in December, we are going to get a new Chinese sales record in 2015.
All segments of the market showed improvements this month, unsurprisingly led by the SUV segment, as demand for compact crossovers boosted SUV and crossover sales 72% to over 716.000 units, while sedan sales were up 9,1% to 1,17 million units and MPV sales were up 8,8% to over 218.000 units. The market share of local manufacturers was slightly down on October to 39,3%.
Please note these figures exclude import models, unless specifically noted.
In November, Volkswagen finally rebounded from its 8-month slump with sales up 37% thanks to year-best sales for the Bora, Lamando and Lavida sedans, but due to slow sales earlier this year VW is still down 4% year-to-date. Buick consolidates its second place with sales up 22% in November thanks to the new-for-this-year Verano and Excelle GT and the Envision SUV, which will be exported to the US next year. Nissan moves from 8th place year-to-date and 5th place in October to 4th in November, boosted by the instant success of the Lannia sedan, introduced last month and already passing the 10.000 unit mark, without cannibalizing sales of the brand’s other small and compact sedans Sunny and Sylphy. Crossovers also helped Nissan become the best selling Japanese brand in China this month, as the Qashqai, X-Trail and Murano lodged solid year-over-year improvements.
Honda also continues to benefit from strong crossover sales on the CR-V, but especially on the XR-V and Vezel small crossover twins, which reach a combined record 24.000 sales in November, but also on strong Accord sedan volume. The only two brands in the top-25 to actually lose sales on last year are two GM brands Wuling, down 1% and Chevrolet, down 17% as it suffers from the model changeover of the Malibu and Sail sedans, as its crossovers Captiva and Trax enjoy their best month of the year. Thankfully for General Motors, its other three brands Baojun, Buick and Cadillac all three reach record monthly sales in November.
Great Wall‘s SUV brand Haval breaks through the 70.000 monthly sales barrier for the first time ever, thanks to record sales of its H1, H2 and H6 models, the latter helped by the H6 Coupe version. Crossover sales also pushed Hyundai and Kia firmly back into growth mode, with the ix25 and new Tucson, but also the Elantra Langdon sedan reaching monthly volume records for Hyundai, and the KX3 and Sportage R, as well as the K2 and K3 sedans doing the same for Kia.
In the luxury race, Mercedes-Benz keeps gaining ground on Audi and BMW by doubling its sales of locally produced models thanks to a monthly record for the C-Class L and the addition of the GLA small crossover. The changeover from the GLK to the GLC will help the brand continue its surge in 2016. Volvo reaches a record monthly volume on strong demand for the locally produced S60L sedan and XC60 crossover, and a sudden surge of the old gen XC90, called XC Classic in China, with sales up more than sevenfold on October.
Of the 18 major Chinese automakers (>10.000 monthly sales), 14 have shown double digit growth in November, benefiting from the tax cut on smaller models (engines of 1,6 liters or less). As we’ve seen for the last couple of months since the introduction of the 560 SUV, Baojun is one of the fastest growing brands in China, going from just over 10.000 sales in November 2013 and over 33.000 in November 2014 to more than 58.000 sales this month. GAC Trumpchi, Haval, SAIC MG, Soueast, Venucia, Yema and Zotye all benefit from SUVs and crossovers launched this year, and for some of them a single new SUV model now represents between 50% and 90% of total brand sales. On the other hand, FAW, Great Wall and Lifan struggle as they’ve missed the SUV boom and focused too much on sedans and MPVs.
New brand Huasong has been a marginal player since its launch in March with its single model Huasong7, having sold less than 1.800 units in the past 7 months, of which 1.000 sales in October, but in November the brand suddenly takes off with over 4.000 sales. This puts it at almost the same level as the other all-new brand Enranger, which sold just short of 5.000 units in its fifth month of sales, showing steady growth with its two models. This only underscores the failure of Qoros, which is still stuck at less than 1.500 monthly sales with its two models as the brand approaches its second anniversary since sales of the Qoros3 started.
Electric cars take off
A sudden surge in EV sales in China may be the result of the heavy smog that’s plagued major Chinese cities for the past few weeks. For example, Beijing introduced limits to the use of gasoline powered cars and hybrid cars, which can only be driven on to alternate days, while EVs are exempt from this rule and can be driven every day.
EV maker Denza, a brand of Daimler and BYD selling a single model, the all-electric Denza EV, has struggled to sell more than 1.400 cars in the past 11 months before surging to over 700 sales in November. The Mercedes-Benz B-Class styled Beijing E-Series EV has more than doubled its sales on last November to over 2.000 units, and the Geely Panda EV has sold over 12.000 units in the past three months, compared to 3.600 in the six months before that. The Venucia Morning Wind, a Nissan Leaf for China, has reached its second best month of sales, after January this year. At Zotye, the TT EV has sold just 3 units in February before disappearing from the charts, but then registered almost 1.000 sales in November, while the Z100 EV has turned the tables on its gasoline version, selling 3.730 vs. 100 units, compared to 1.098 gasoline Z100‘s and 184 Z100 EV’s in January.
No less than 6 new models have been introduced in November, and they’ve been met with relative success in their first month of sales.
The most successful new model in China is the Honda Greiz with 5.164 sales, despite being no more than a sportier looking version of the already existing Honda City small sedan, renewed in September. Honda‘s two Joint Ventures in China lead to the brand selling multiple versions of the same car, as each JV wants a successful model the other has, just like the XR-V and Vezel crossovers. As a result, the Greiz is likely to cannibalize sales off the City, with sales of that model down 35% on October. Combined, the two models still improve, so the strategy is working from a volume perspective.
FAW introduces the Besturn B30 as the smallest sedan so far under this sub-brand. With 4.612 sales, it’s already FAW‘s second best selling model in its first month, with over 20% of total brand sales. Unfortunately, it can’t keep the brand from plunging more than 22% in November.
Jeep has finally started local production of its first model: the Cherokee. 2.171 sales in its start-up month are a good sign, and it should be able to at least double that figure in coming months. The Cherokee is already at half of Mercedes-Benz GLK volume, so it should be able to compete with that model, or its successor the GLC.
Ford starts up local production of no less than two models, with the Ranger-based Everest large SUV the most successful with almost 2.000 sales vs. 1.003 for the Taurus large sedan. The Everest is built by the Jiangling–Ford Joint Venture for commercial vehicles, while the Taurus is produced by Changan–Ford, like the brand’s other passenger cars. In the US, rumors have surfaced that Ford may cut US production of the Taurus to import the model from China, as Volvo already does with the S60L and GM is planning for the Buick Enclave next year.
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