China March 2017: Baojun wins 510 bet in market up 1.7%

The Baojun 510 is an instant success but cannibalises the 560. Picture courtesy qq.com

* See the Top 74 brands and Top 403 models by clicking on the title *

New light vehicles sales in China are up by a slim 1.7% year-on-year in March to 2.1 million wholesale units. Once again it’s SUVs and crossovers that are keeping the Chinese market in positive territory with sales up 20.5% to 832.199 whereas sedans are down 4.5% to 990.433, MPVs down 15% to 196.598 and microvans down 17% to 74.600. Over the first quarter of 2017, the Chinese light vehicle market is up 4.6% to a record 5.95 million units. This slower rate comes with the rise of tax on small vehicles (up to 1.6L) from 5% to 7.5% at the start of the year.

According to figures released by manufacturers themselves (retail figures including imports), General Motors is the best-selling manufacturer in China with sales up 16% year-on-year to 345.448 whereas the Volkswagen Group is down 1.1% to 324.500 units, handicapped by Audi underperforming again (-19% to 41.371) due to dealers refusing to order new cars as Audi was planning to open a second sales channel with its partner SAIC. Audi should revive over the next couple of months though as Audi said it would postpone its new plans until it would sell 900.000 annual units in China (it sold under 600.000 in 2016). Volkswagen brand sales are up 3.6% but Skoda down 15%. Year-to-date, the Volkswagen Group is down 6.7% to 891.500, VW down 3.8%, Audi down 22% and Skoda down 11%. Note Volkswagen wholesale sales are down 4% year-on-year this month as detailed in the tables below the jump.

The VW Tiguan hits its best overall ranking since September 2015.

The best-selling Japanese manufacturers all frankly beat the market: Nissan Motor Co. sales are up 9% to 120.106, followed closely by Toyota Motor Co. up 12% to 112.400 and Honda Motor Co. up 15% to 111.127. Note wholesales of locally-made Honda are up a whopping 30% to 119.976 this month, placing the brand above Toyota, Buick and Nissan. Meanwhile Ford Motor Co. sinks 21% to 90.457 excluding Lincoln. In the premium race – here too retail sales including imports – Mercedes soars 32% to 49.871 while BMW AG is up 8.3% to 50.783 and, as a reminder, Audi down 19% to 41.371. If we look at wholesales of locally-made vehicles, the picture is quite different with Audi in the lead at 41.500 (-16%), ahead of Mercedes at 37.243 (+57%) and BMW at 32.282 (+27%).

A diplomatic row over missile systems in North Korea led to some clear hesitation on the purchase of Korean car brands with Hyundai wholesales tumbling down 52% and Kia down 70%. Among local brands, Changan remains dominant in 2nd place overall below just Volkswagen thanks to deliveries up 17%, Geely continues to sport amazing gains at +70% ahead of Baojun (+9%), Haval (+7%) and Dongfeng (+7%) all beating the market but slowing down their growth. GAC Trumpchi (+42%) and Roewe (+177% thanks to the RX5 crossover and all-new i6 sedan) both post stellar year-on-year gains.

Jeep sells over 20.000 locally-produced models for the first time this month.

Now onto brands that have kick-started their local production recently. Jeep more than doubles its deliveries year-on-year at +129% to break the 20.000 locally-produced sales milestone for the very first time at 20.661, with the Compass and Renegade both posting monthly records and the Cherokee falling less than a thousand units short of doing the same. We welcome Acura in the brands ranking this month with the first units of the CDX being sold in the country. This leaves Lexus and Subaru as the only major manufacturers not engaged in Chinese local production. Renault (6.066), Hanteng (4.877), Cowin (4.773), Borgward (4.556) and SWM (4.514) are the other ‘new’ brands inside the Top 55 while Bisu is down 4 spots on February to #60.

Model-wise, the VW Lavida steps up to pole position when including sales of its hatchback variant the Gran Lavida despite sales down 4%, outselling the Wuling Hongguang (-6%). The Haval H6 marks a pause at -13% in third position ahead of the Buick Excelle (+26%), Nissan Sylphy (+2%), Toyota Corolla (+3%) and GAC Trumpchi GS4 (+7%) making it two Chinese nameplates atop the SUV ranking. Boosted up 52% by the new model, the VW Tiguan climbs onto the 9th spot overall, falling 2.000 units short of beating its monthly volume record (31.092 last January) but reaching its highest ranking in China since September 2015. This month the Tiguan is VW’s second best-seller below only the Lavida, a very rare event.

Over 10.000 GAC Trumpshi GS8 found a buyer in China this month. A first.

Further down, the Haval H2 is up 112% to #13 thanks to the addition of the H2S variants, the Geely Boyue is down four ranks on February to #18 but beats its monthly volume record at 20.461, as does the Dongfeng Fengguang 580 at 18.775, the Chevrolet Cavalier at 16.079, the brand’s only nameplate to sport a five-digit sales figure this month, and the GAC Trumpchi GS8 breaking the 10.000 monthly unit mark for the first time.

But the main story of the month to our view is another blockbuster launch by Baojun. Clearly pushing the brand in terms of design, the 510 crossover was a bet. With 18.016 sales for its second month in market, it looks like the design bet is won. However there is a big drawback to this performance: the 510 appears to be cannibalising the 560 within the Baojun range: the latter s down an abysmal 64% this month to just 15.016, keeping in mind March 2016 was its all-time record at 42.077. The next few month will give us a clear indication as to how the two nameplates can coexist in the market.

Previous month: China February 2017: Market back on track at +22% to 1.9 million units

One year ago: China March 2016: Haval H6 and Baojun 560 beat records, market up 9%

Full March 2017 Top 74 brands and Top 403 models below.

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