China’s 2018 car market: the end of years of growth and a change of leaderJanuary 22, 2019
For the first time in the 21st century, the main car market of the planet showed negative dynamics for the year: in 2018, 28.1 million new cars (including trucks and buses) were sold in China, which is 2.1% less than in 2017. Statistics were spoiled by passenger cars, while the demand for commercial vehicles continues to grow.
Of the 28.1 million new cars sold in China last year, 4.37 million accounted for commercial vehicles, the demand for which grew by 5.1% over the year, and the total minus by 2.1% was entirely the wines of the passenger sector, in that the number of SUVs and crossovers. The SUV segment, which was considered the most promising in China in recent years, sank by 1.1% in 2018, its share was 9.8 million cars, while traditional cars (sedans, hatchbacks, station wagons, etc.) lost 1 , 9% – 11.6 million units sold (hereinafter, the sales data excluding imported models, which, however, have almost no effect on the big picture).
Experts cite several reasons for the deterioration in the performance of the Chinese car market: natural saturation, which many had predicted three years ago, the reduction of government programs to stimulate demand and support the national auto industry, and the trade war with the United States.
Optimistic forecasts for 2019 are built around 28 million cars, that is, at best, stagnation is expected, and at worst – a further fall, and the Chinese car market will not reach the cherished 30 million mark in the coming years. Nevertheless, as the largest market in the world, it will continue to attract investments from large transnational auto concerns, especially since last year the Chinese government allowed foreigners to take control of their factories in the country (before only 50:50 shares were allowed some local partner), and BMW has already taken advantage of this, announcing its intention to increase its stake in BMW Brilliance Automotive JV from 50 to 75% and invest 3 billion euros in expanding local production. Also, thanks to the new rules of the game, in 2018, Tesla has finally taken real steps to build its Gig factory in China – it has reserved a site in the free economic zone of Shanghai.
Everything goes to the fact that foreign companies will crowd out Chinese manufacturers from their own market, and by the end of 2018 this is noticeable: the share of local brands, compared to 2017, decreased 42.4 to 41.6%, whereas in the past the years grew steadily. In the list of best-selling models, the archaic Wuling Hongguang minivan, which was in the lead for the past five years, gave way to the completely modern Nissan Sylphy sedan in 2018 (in other markets this model is known as Sentra): 476,538 sold (-10.5% ) and 481,216 (+ 18.9%) copies, respectively. In addition, five VW models hit the top ten (see table below), and the truly Chinese car in the Top-10 is only the Haval H6 crossover that occupies the fourth line (sold 452,552 units, -10.6%), then as Baojun 510 – the second most popular SUV and the sixth best-seller in the general list – is, in essence, the brainchild of GM with the appropriate level of engineering.
The most popular luxury car was the Buick Excelle GT – the 11th place on the bestseller list and 261,920 sold copies (-37.8%), but in the USA, for example, the Buick brand is not considered a premium. If we talk about the premium in the international sense of the word, then the best-selling model in China last year was the stretched Audi A4L sedan: 167,923 pieces were sold. (+ 45.2%), second place is occupied by the elongated Mercedes-Benz C-Class L (156,567 units, + 21.1%), the third – Audi A6L (153,273 units, + 6.7%). The Audi Q5 (123,421 units, + 0.9%) turned out to be the most popular premium crossover.
The rating of the most popular car brands in China is headed by Volkswagen by a wide margin from competitors: 3,129,743 vehicles (-0.3%) were sold. Honda takes second place (1,452,441 units, + 2.4%). Geely took the third place and became the most productive Chinese brand (1,382,111 pieces, + 10.1%), but this success is largely due to positive image influence from Volvo, which belongs to the Chinese and shares its engineering experience with them. and the latest models of Volvo and Geely are built on common platforms.
Note that the top-10 brands are purely Chinese Changan (8th place) and Haval (10th place), but their sales are falling: 851,361 pieces have been sold. (-19.7%) and 766,062 pcs. (-9.8%), respectively.
The strongest drop out of notable players (those who sold more than one hundred thousand cars a year) showed Ford: sales fell immediately by 54.3% to 383,485 units. Given that Ford has recently entered into an alliance with VW, and the German brand is leading in China, we can assume that in the future Ford will completely surrender the Chinese market to its newly baked partner, although the release of badge engineering models is not excluded.
The growth leader was the British brand MG, owned by the Chinese automaker SAIC: sales grew by 132.2% and amounted to 312,906 cars. It is clear that there is nothing British in Chinese MG for a long time – it is simply moderately good cars that meet the tastes and needs of local consumers.
We separately mention the so-called electrified cars (plug-in hybrids, electric cars, hydrogen cars), sales of which, under pressure from the Chinese authorities, took off immediately by 62% and amounted to 1.256 million units. Of these, 984 thousand cars accounted for clean electric trains, the most popular model was the low-cost subcompact hatchback BAIC EC180 — 90,637 copies were sold (+ 16.1%).
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