Although VW’s southern factory is at least three years away from building its first car, it seems that VW’s southern strategy is already having an effect on the southern provinces, although GM and Hyundai have also seen sales increases in the area.
The southern provinces, especially Guangdong, have been the traditional markets of the Japanese three, Honda, Toyota, and Nissan, however the pressure on the Japanese three grows larger by the day.
In the first half of the year, sales stats indicated that changes are underway in Guangdong, although the Japanese three still control a large percentage of the sales stats American and European cars especially in larger cities such as Shenzhen and Guangzhou, although Guangzhou is lumping for the FAW-VW range of cars whilst Shenzhen is going for the Shanghai-VW range.
The VW Tiguan, Lavida and Jetta became highly popular in Shenzhen in May, whilst the Lavida became a top 10 seller in Guangdong in June, in April the Tiguan SUV was the second best selling SUV in Shenzhen but by May it outsold the CRV, Highlander, and RAV4 SUV’s and was placed first in total sales.
In April VW sales accounted for 9.33% of the market in Guangdong, which shows a large increase over its January sales where it only controlled 6.33% of the market. FAW-VW is averaging sales of 6000 units per month in Guangdong, whilst Shanghai-VW is working on adjusting its car delivery time to increase sales in the province.
According to statistics, the Japanese three control roughly 52% of Guangdong’s vehicle market, but this is down from 58.7% at the same time last year. Toyota’s problem lies with its recall-gate incident last year, and savvy consumers seem to be shying away from the brand. Besides VW, other brands are making a big inroads into Guangdong, by May 2010 Shanghai-GM sold 20055 cars in Guangdong, and took 6.59% of the market, whilst Beijing-Hyundai sold 11217 vehicles in Guangdong, taking 3.69 of the market.
The Japanese three are going to feel a lot more stress over the next coming months as PSA’s new Citroen factory comes online in Shenzhen, and also BAIC and GAC are planning to introduce their own Guangzhou plans, BAIC recently bought Guangzhou’s Bao Long Auto and will be making the most of their production equipment over the coming months.
