China July 2015: Focus on the all-new models

As is the tradition on BSCB, we now go into the detail of the all-new models landing into the largest new vehicle market in the world: China. Even though Chinese light vehicle sales are down for the 2nd month running in July, the rhythm of new introductions in the market remains as robust as ever. Keep in mind we only cater for the models that have kick-started local production as imports data is still closely guarded when it comes to China. After welcoming 6 new entrants both in March and April, 5 new nameplates in May and two in June, we are back up to 4 in July. No surprise at all: three of them are SUVs, the only segment still gaining ground in China (+41% in July).

1. Baojun 560 (#43 with 9.158 sales)

For you BSCB readers who have been following the Chinese market closely, this is one of the most anticipated launches of the year. The 560 was unveiled at Auto Shanghai in April exactly one year after the 730 MPV in another stroke of genius by the SAIC-GM-Wuling joint-venture, who made a clean sweep of their stand to only show the 560. No 730, 610 hatch or 630 sedan even though there was room for all of them… In one year, the Baojun 730 has sold no less than 300.000 units, making it the most successful new nameplate launch in the history of automobile in China. Can the 560 replicate this success in the SUV world? Even though this segment is a lot more crowded than MPVs with 112 locally produced SUVs on sale in China in July vs. 36 MPVs, the sky really is the limit for the 560.

Priced between 76.800 and 89.800 yuan (10.000 less than expected) or US$12-14k, and equipped with a petrol 1.8L engine mated with a 5MT, the 560 is a notch above the 730 (69.400 to 81.800 yuan) in terms of pricing. It competes full frontal with some of the best-selling SUVs in the country such as the JAC Refine S3 (104.000 sales so far in 2015 but 1.5L engine only), Changan CS35 (100.000 units, 1.6L engine), Chery Tiggo 3 (61.000 units, also a 1.6L engine) or the Haval H1 (40.000, 1.5L engine). A red-hot segment for sure, and judging by the Baojun 560 start this month at 6.451 sales, we have another blockbuster on our hands. In fact, the 560 will be an interesting test to see whether the success of the Baojun brand, which has until now been exclusively built on the 730 MPV – mostly successful in the countryside – is transferable to the SUV segment – traditionally popular in urban areas.

If the Baojun 560 manages to spread the SUV craze into rural China, it could definitely aim at fighiting the Haval H6 as China’s best-selling SUV. For now, battling at the same level as the JAC Refine S3 and Changan CS35 would be an excellent stretch-target.

Bar for success: #25 or 15.000 monthly sales

2. Weichai Enranger G3 (#202 with 1.043 units)

Weichai Auto is a new Chinese manufacturer owned by Weichai Power, a state-owned company specialised in the manufacturing of diesel engines for vehicles, marine vessels and power generators. Weichai Auto launched the Enranger “brand” (sub-brand?) in December 2013 and will probably need to revise the name sounding dangerously similar – and annoyingly autocorrecting – to Endanger, if exports markets are in the works. The G3 is its first offering, a small MPV and a pickup will follow before the end of the year. Although only officially launched on July 30, the G3 already appears just outside the Chinese Top 200 with over 1.000 sales this month. Powered by a… Mitsubishi 1.5L petrol engine, the Enranger is priced at a cut-throat 57.900-70.900 yuan or US$ 9.100-11.100.

This places the G3 at the lowest end of the SUV segment in China, along with the BAIC Huansu S2 and the up-coming Lifan X40 and JAC Refine S2. Its success – or lack thereof – will test the lower limits of Chinese SUV offerings. Up until now consumers have resisted somewhat, with the BAIC Huansu S2 only seducing 12.000 buyers vs. 84.000 for the Huansu S3 for example. But this could be one of the directions the Chinese SUV market is moving towards, one that absolutely no foreign manufacturer can compete in.

Bar for success: #100 or 5.000 monthly sales

3. Roewe 360 (#296 with 174 deliveries)

Roewe is breaking taboos: initiating a naming code that doesn’t end in -50 with the 360 which will eventually replace the 350. It will be priced between 80.000 and 150.000 yuan (US$ 12.500-23.500) and has already shown notable improvements in the less conservative exterior and much more refined interior with the now mandatory giant infotainment touch screen. It’s not a great time to launch a sedan in China with this segment freefalling 20% year-on-year in July, however this specific replacement was long overdue. As I pointed out at Auto Shanghai, the Roewe brand has been one of the most inconsistent in China with quality varying widely between the 350, 550 and top-of-the-range 950 as described in my coverage of Auto Shanghai 2015. That the 360 is catching up on lost time is great news for Shanghai Auto. But really what Roewe should be launching right now is a sexy compact SUV: at MG, SAIC’s other passenger car brand, the GS SUV offering, only just off the starting blocks, already represents 63% of its total July sales in China…

Bar for success: #100 or 5.000 monthly sales

4. Foton Sauvana (#327 with 64 sales)

The Sauvana fit in really well in the loud Foton stand at the latest Shanghai Auto Show. Even though it’s the heavy truck manufacturer’s first SUV, it seems like they are evolving in familiar territory with this no-frills but robust offering. Squarely aimed at the country’s rural areas, the Sauvana won’t reach the top of the sales charts just yet but could help the brand establish itself in the passenger cars world. After all, its Tunland pickup is already a success, both at home and in mature export markets such as South Africa and Australia. Foton says the Sauvana has been developed with the Toyota Fortuner in mind. It is powered by a choice of two turbo engines: a diesel 2.8L and a petrol 2.0L and priced between 125.800 and 167.800 yuan (US$19.700-26.200).

Bar for success: #200 or 2.000 monthly sales