Middle-end brands explore middle-size SUV market

The hottest middle-size SUV market has attracted many auto companies’ attention. Middle-size SUV models from GAC Honda, Chana Ford, Shanghai General Motors, GAC Trumpchi and GAC Toyota have been launched, which will be followed by Chana Auto and Dongfeng Peugeot. “As long as the brand image is not bad, almost all middle-size SUV models launched in recent two years have won successes in the market, let alone the first-tier brands.” One person in charge of an auto dealership in Guangzhou said on 8th, December.

The soaring sales in middle-size SUV market responses to the booming Chinese SUV market. According to data from CPCA, sales of SUV in November increases 12% for a total of 1,029,900 compared with the data in October, a growth of 42.4% from the same month a year ago. Middle-size SUV models win the largest unit profit among all SUV models. For example, selling price and unit profit of Envision is two or three times of Haval H6 and Trumpchi GS4. Unidentified news comes that Envision will bring about profit of RMB 10b for Shanghai GM this year.

The booming middle-size SUV market also guides a new way for the fading middle-end brands. The declining prices of luxury vehicles in the past several years make middle-and-high-end cars less competitive, decreasing profits and market influences for middle-end brands. Most auto companies have tried to launch compact and small-size SUV but the result is not as good as expected. But the middle-size SUV market makes it possible for auto companies to price higher than B+-class cars, increasing profits and brand values at the same time.