Summary: Chinese automobile market growth from January to May

Despite summer coming early this year, the automobile market in China remained cool in April. According to China Passenger Car Association statistics, a total of 1.67 million passenger automobiles were sold in April, down 2.3% from last April’s figure. Domestic own brand sales during the month totaled 679,000 units, up a slight 2.1% year-on-year.

As before, the Chinese passenger automobile market is mainly divided up between German, American, Japanese, Korean, French and domestic Chinese brands. However, there have been slight shifts among these brands’ market shares.

German brands are chiefly represented by Shanghai VW and FAW-VW, whose sales growth has been near level from last year. Some commentators have hypothesized that the leveling off growth rates are due to shifting consumer preferences, with younger buyers not attracted by VW’s more traditional design and brand image. Furthermore, recent safety concerns mean that it will be hard for VW-affiliated joint ventures to engage in price wars by way of reducing costs. Aside from Shanghai VW’s Passat, Tiguan and Gran Lavida, as well as FAW-VW Magotan and Bora, sales of all VW branded vehicles decreased from last year.

Chief American brand Shanghai GM was able to achieve 6.2% positive sales growth over the first four months of the year. That said, sales of one of its premier models, the small SUV Buick Envision, decreased 34% over the past four months. Shanghai GM’s Chevrolet brand performed strongly, with average monthly sales of 13,000 units. Changan Ford, the second-largest seller of American brand vehicles in China, saw its sales decrease nearly 20% this year, due mainly to quality concerns and the slow pace with which the JV releases new models.

Japanese-affiliated JVs managed to perform strongly, with Honda and Toyota’s new models have been warmly received by Chinese consumers. Japanese brands’ have succeeded due to strong localization programs and sales strategies. Despite facing challenges, Nissan has also managed to stay in the competition thanks to best sellers like the Bluebird Sylphy, Qashqai and X-Trail.

One of the top two Korean-affiliated JVs, Beijing Hyundai, saw its sales fall 28% year-on-year, while the other, Dongfeng Yueda Kia, was forced out of the top 15. Korean brands are now paying the price for not having built up their core competence in the past years, and as such have started to be overtaken by domestic competitors. Political tensions have also contributed to declining sales.

Domestic Chinese own brand manufacturers as a whole saw sales grow a slight 2.1%. Among domestic own brands, Geely, GAC, SAIC, Dongfeng Fengshen, Soueast and six other manufacturers all achieve positive year-on-year sales growth.

SAIC-GM-Wuling achieved slight year-on-year growth of 1.4% from January to April. This lackluster sales growth was due to slowing MPV sales in China.

Although Great Wall’s new Haval H6 saw sales decrease, sales of the manufacturer’s two other key models, the Haval H2 and Haval H7, have achieved steady positive sales growth.

April was a good month for Chery. The manufacturer’s sales from January to April totaled 159,000 units over the first four months of the year, representing positive year-on-year sales growth of 6.9%. Chery’s new models, the Arrizo 5 Sport and Tiggo 7 Sport, will hopefully help the manufacturer become even more competitive over the course of the year.