China April 2016: Focus on the All-new models

The Haval H7 finally launches in China, one year after its unveiling in Shanghai. 

* See the April 2016 Top 380 All China-made models and Top 70 brands here *

After a record 12 new locally-produced nameplates hit Chinese dealerships in March, the pace of new launches slows down in April, yet there are a further seven new models landing this month. The SUV tap certainly has not dried up, with four of these new launches belonging to this segment and spanning the entire spectrum of price: from low-cost (Lifan) to luxury (Cadillac). Volkswagen is trying out a new format for China and Dongfeng launches its flagship sedan into its home market…

1. VW Golf Sportsvan (#133 – 3.659 sales)

Volkswagen just launched local production of the two year-old Golf Sportsvan in China through its joint-venture with FAW at its plant in Foshan, Guangdong. The German brand, by far the #1 in the country and the foreign manufacturer with the longest presence in China, has the midas touch here: of all its China-made nameplates, only two have never crossed the symbolic 10.000 monthly sales barrier: the luxurious CC (all-time high of 5.783) and the Touran MPV (5.206). Even a risky bet such as the VW Lamando managed 16.452 units in March this year… In this context, a five-digit monthly figure seems a logical target for the Sportsvan even though this is unchartered territory for the brand: Chinese consumers are not used to this type of format. So much so that similarly to the BMW 2 Series Active Tourer launched last month, the Sportsvan is categorised as a sedan instead of an MPV in China. The Golf Sportsvan is priced between 131.900 and 197.900 yuan (US$20.000-30.100).

Bar for success: 10.000 monthly sales

2. Lifan Myway (#168 – 2.342 sales)

Lifan has been posting catastrophic results at home with sales down by an abysmal 74% so far in 2016 to just 15,375 units. To its credit, the manufacturer has rebooted at the Beijing Auto Show last month with *exactly* the format it needs to launch in current market conditions: a 7-seater cutthroat-priced SUV: the MyWay, also starting a new nameplate nomenclature. This the “make or break” model for the struggling manufacturer, and with a solid start at 2.342 sales, the MyWay already accounts for a whopping 44% of the brand’s sales in April. At 4.44m long and powered by a 1.5L petrol engine, it is priced between an almost impossibly low 57.300 and 73.800 yuan (US$8.700-11.200), making it no less than the cheapest 7-seater SUV in China, just below the BAIC Huansu S3 (61.800-72.800 yuan) which peaked at a stunning 20.868 sales last December.

The MyWay also competes in price with smaller crossovers such as the BAIC Senova X25 (10.593 sales in April), Brilliance V3 (peak at 9.325), JAC Refine S2 (8.073) and Changan CS15 (5.680) but also, thanks to its boxy shape and 7 seats – and this is where Lifan’s strategy is really smart – with a slew of extraordinarily successful local 7-seater MPVs that have been trying to look more like crossovers in recent times. I’m pointing at none other than the Wuling Hongguang (44.800-69.800 yuan), BAIC Huansu H3 (55.800-62.800) and Karry K50 (46.800-69.800). In other words, Lifan has delivered the perfect offer to get itself out of the sales ditch it currently is in. Now consumers need to respond favourably. The brand’s other two SUV offerings’ monthly volume records are 4.011 for the X50 and 9.273 for the X60. In less desperate times, levelling with the X50 would have been good enough, but Lifan needs much more out of the MyWay.

Bar for success: 8.000 monthly sales

3. Cadillac XT5 (#187 – 1.863 sales)

The Cadillac XT5 appears for the first time simultaneously in the U.S. (#231 with 304 sales) and in China in April, with its Chinese score already vastly outpacing its performance at home. A sign of things to come for the Cadillac brand, as the XT5 fully taps into the most dynamic segment in China. Produced at SAIC-GM’s Jinqiao plant in Pudong, Shanghai, at 4.81m long and powered by a 2.0T engine, the XT5 replaces the SRX and is priced at 359.900-539.900 yuan (US$54.800-82.200). It competes with the Audi Q5, Mercedes GLC and the imported Lexus RX and Porsche Macan. Let’s pause here for a second and stress that the XT5 starts at US$39.990 in the U.S.A – a staggering US$15.000 than in China – and ends at $63.495. Another example of foreign manufacturers marking up their Chinese offering even though they are manufactured locally at reduced cost. The best monthly score for a Cadillac in China so far is 4.054 from the XTS, matching this is a pre-requisite for success for the XT5 which is evolving in a much more potent segment.

Bar for success: 4.000 monthly sales

4. Haval H7 (#219 – 1.290 sales)

The H7 was unveiled a year ago at the 2015 Shanghai Auto Show and finally makes its appearance in market with a shy score for now. The Haval brand is now at a crossroads and the H7 is an extremely significant test. Until now, Haval has built its success on high quality, low-priced SUVs: the H6’s historical overall pole position in April had a lot to do with a third price cut bringing its starting tariff down to 88.000 yuan (US$13.400). The H1’s price range (68.900-82.900 yuan) and the H2 (88.800-128.800) are also on the affordable end. Both have been exceptional sales successes but are now losing steam: the H1 is down 9% in April and the H2 down 25%.

It is therefore now time for Haval to look elsewhere for engines of growth, and the H7 represents the up-market direction the brand would like to take moving forward. At 4.70m long and powered by a 2.0T engine mated with a DCT gearbox, it is priced between 149.800 and 169.800 yuan (US$22.800-25.900), logically slotting above the H6 (88.800-162.800) and H6 Coupe (122.800-171.800). It also competes in price with smaller foreign SUVs such as the Honda XR-V or Hyundai ix25, a ‘real world’ test of sorts for Haval. Problem is, the brand has failed so far with its high-end lineup: the H8 (158.800-256.800) peaked at a paltry 1.373 sales while the H9 (209.800-272.800) has an all-time best of 3.066 but is now struggling to reach four-digit monthly volumes. For Haval, a lot rests on the success of the H7: the pressure is real and it will need to reach five-digit figures to be deemed a success.

Bar for success: 10.000 monthly sales

5. Nissan Maxima (#225 – 1.158 sales)

Nissan wants to bank on the success of the Lannia with this Maxima, the same model as the one sold in the U.S and spreading the brand’s new design language across its Chinese lineup. In China, the Maxima slots above the Teana (177.800-244.800 yuan) and is priced from 234.800 to 267.800 yuan (US$35.800-40.800). Unlike Cadillac with the XT5 above, the prices are in line with what the Maxima sells for in the U.S.A. ($33.345-40.795). The Maxima goes full frontal with the very successful Buick LaCrosse (all-time high of 11.672 monthly units), about to be refreshed, and if Nissan managed to find room in its lineup for a Lannia that matches the Sylphy in size and price, it can definitely do so for the Maxima.

Bar for success: 7.000 monthly sales

6. Dongfeng Aeolus A9 (#337 – 148 sales)

Two years after unveiling it as “Concept 1” at the 2014 Beijing Auto Show, Dongfeng makes the plunge with the Aeolus A9, the brand’s new flagship sedan. The A9 mission isn’t volume but brand image, and so far it has succeeded in lifting up the Dongfeng marque at home (see our list of the most impressive Chinese carmakers at the 2016 Beijing Auto Show) and is generating dithyrambic reviews from the local press. Priced between 179.700 and 279.700 yuan (US$27.400-42.600), the A9 competes with other Chinese flagships such as the more powerful Roewe 950 (189.800-309.900) or the GAC Trumpchi GA8 (169.800-299.800). It is however helpless against the Zotye Z700 (99.800-158.800) or the very impressive Geely GC9 (119.800-229.800). If the latter hit a stunning 6.001 sales last December, the Zotye Z700 (748 sales in April) is a more realistic target as Chinese nameplates in this segment traditionally struggle to post four-digit monthly sales figures. It should be an objective for the A9 but in the end this model is not designed to break sales records, rather showcase the marque’s potential. So far so good.

Bar for success: 1.000 monthly sales

7. BAW BJ80 (#374 – 10 sales)

BAW just introduced this clone of Mercedes G-Class and wants to emulate the success of the B40 which peaked at 1.628 sales in June 2014. With the BJ80, BAIC is nicely expanding its “rough-as-guts” BAW lineup and can expect a solid success with the Chinese army and police forces. The general public may be more cautious however, and a stint above 1.000 monthly units at some stage during the next year would label the BJ80 as a success.

Bar for success: 1.000 monthly sales

China April 2016 article: Haval H6 first SUV to lead the overall ranking

Previous month: China March 2016: Focus on the All-new models

One year ago: China April 2015: Focus on the all-new models