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France 1-18 May 2015: Peugeot 308 dominates

May 29th, 2015 No comments

Peugeot 308 France May 2015. Picture courtesy largus.frCan the Peugeot 308 finish the month in pole position at home?

* See the Top 10 best-selling models and brands by clicking on the title *

I give you the rankings for now, complete analysis will follow shortly.

Previous month: France April 2015: Peugeot 308 and 2008 overtake Renault Captur

One year ago: France 1-22 May 2014: Peugeot 308 up 88% to climb on podium

Full 1-18 May 2015 Top 10 brands and models below.

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Categories: France

Luxembourg Full Year 2014: VW Golf and Audi A3 on top

May 28th, 2015 No comments

Renault Captur Luxembourg 2014. Picture courtesy of largus.frThe Captur helps Renault lift 16% year-on-year in Luxembourg.

* See the Top 10 best-selling brands and models by clicking on the title *

New car sales in Luxembourg are up a reassuring 7% year-on-year in 2014 to 49,793 registrations, and Volkswagen keeps the lead of the brands ranking with 12.9% share. Helped by the success of the Captur, up to #7 this year, Renault is up two spots and 16% on 2013 to reclaims the 2nd spot it held in 2012 with just above 10% share. Audi is up 3% and BMW up 7% but both manufacturers are down one rank to #3 and #4 respectively, above Mercedes. Notice also Peugeot up 13% to 6th place. One very interesting particularity of the Luxembourg new car market is the extremely high prevalence of station wagons, accounting for just under 40% of all sales in 2014, thus competing for the title of most station wagon-friendly market in the world.

VW Golf Luxembourg 2014. Picture courtesy of largus.frThe VW Golf is the best-selling nameplate in Luxembourg in 2014.

Even more impressive, whereas the entire world is defecting from station wagons to SUVs, the station wagon market share was only 20% in Luxembourg a decade ago… In the models ranking, the VW Golf holds onto its crown as it does in neighbouring Belgium, Netherlands and Germany, ahead of the Audi A3 and Renault Scénic, making for a unique mix of German and French influences. The country’s wealth is clearly visible in the Top 10 best-selling models, with the BMW 3 Series and Mercedes A-Class also present. Note Renault places four nameplates inside the Top 8: the Scénic, Clio, Captur and Mégane  – a stronger performance than at home in France (4 in the Top 9).

Previous year: Luxembourg Full Year 2013: 3 Premium Germans in Top 5

Two years ago: Luxembourg Full Year 2012: VW, Renault and BMW on top

Full Year 2014 Top 10 brands and models below.

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Categories: Luxembourg

Lithuania Full Year 2014: Fiat 500 shoots up to 11.2% share

May 28th, 2015 No comments

Fiat 500 Lithuania 2014. Picture courtesy of largus.frLithuania is the only country in the world to crown the Fiat 500.

* See the Top 10 best-selling models and brands by clicking on the title *

The Lithuanian new car market is up 3% year-on-year in 2014 to 14.461 registrations. Boosted by the Fiat 500, best-selling nameplate in the country for the third consecutive year and up 107% on 2014 to a record 11.2% market share thanks to 1.619 sales, Fiat is the #1 brand in the country, overtaking Volkswagen at 14.6% share vs. 14.2%. Toyota, Skoda and Nissan follow while the Nissan Qashqai (+72%) and Skoda Octavia (+27%) round up the podium ahead of three Volkswagens: the Golf, Jetta and Passat.

Previous post: Lithuania May 2014: Fiat and Volkswagen in the lead

Previous year: Lithuania Full Year 2013: Fiat 500 remains best-seller, or is it?

Two years ago: Lithuania Full Year 2012: Only country to crown the Fiat 500

Full Year 2014 Top 10 models and brands Ranking Tables below.

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Categories: Lithuania

Belgium April 2015: Ford Focus and Volvo V40 shoot up

May 28th, 2015 No comments

Volvo V40 Belgium April 2015. Picture courtesy of largus.frVolvo V40

* See the Top 322 All-models ranking by clicking on the title *

The Belgian new car market including Commercials is down 1% year-on-year in April to 58.194 registrations, shifting the year-to-date total into negative territory at -0.07% on 2014 to 222.852 units. The VW Golf is back in charge of a market it has been dominating since 2010 with 1.826 sales in April (3.1%) and 5.843 year-to-date (2.6%) above the Renault Scenic and Clio, also reflecting the 2015 order. Renault places a third nameplate inside the Belgian Top 6 this month: the Megane at #6 vs. #16 year-to-date but #4 in 2014. Outside the podium, no nameplate achieves 2% market share, cementing Belgium as the most fragmented new car market in the world below Switzerland. The Audi A3 remains very solid at #4 as does the Peugeot 308 at #5, the Ford Focus is up 17 ranks on March to #11, the Volvo V40 up 10 to #14 and the Dacia Duster up 11 to #15.

Previous post: Belgium February 2015: Renault Scenic jumps to top spot

One year ago: Belgium April 2014: Renault Mégane and Citroen C4 impress

Full April 2015 Top 322 All-models Ranking Table below.

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Categories: Belgium

Slovakia April 2015: Suzuki Vitara already just outside Top 10

May 28th, 2015 1 comment

Suzuki Vitara Slovakia April 2015Suzuki Vitara

* See the Top 236 All-models and Top 35 All-brands by clicking on the title *

New light vehicle sales in Slovakia are up by a splendid 12% year-on-year in April to 7.192 registrations, bringing the year-to-date total to 25.260 units, up 3% on 2014. As expected Skoda keeps the lead of the Slovak brands ranking although its share its down at 18.7% vs. 20.6% year-to-date. Volkswagen (10.1%), Hyundai (9.4%) and Kia (7.2%) follow. The Skoda Octavia reclaims the pole position it holds year-to-date with just 6 units more than the Skoda Fabia, strong again at 5% share. Hyundai places both the i20 and i30 inside the April Top 5, with the i20 now the best-selling foreigner year-to-date, overtaking the VW Golf. For its first full month of sales in the country, the Suzuki Vitara surges to a fantastic 11th place with 116 deliveries and 1.6% share, confirming its instant blockbuster status in Eastern Europe after reaching #4 in Hungary and #28 in Poland this month.

Previous month: Slovakia March 2015: Skoda Fabia edges into pole position

One year ago: Slovakia April 2014: Skoda Octavia reclaims year-to-date #1 spot

Full April 2015 Top 236 All-models Ranking Table below.

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Categories: Slovakia

STRATEGY: Where is China headed?

May 28th, 2015 No comments

Prepare for bloodPrepare for blood…

Discover the Top 8 trends currently affecting the Chinese market below.

China’s new vehicle market growth is smoothing out. The perception out there is that the entire market is slowing down, whereas only its growth is – a big difference. Some analysts say this is the beginning of the end, I say the Chinese new vehicle market remains the most dynamic and the fastest evolving in the world and will continue to be for many years to come. Even if its growth did stop forever, we would still be left with a 25 million annual units Chinese market in our hands vs. 17 million for the U.S. and 15 million for Europe currently – including commercials.

But the growth hasn’t stopped and Chinese sales trends are evolving faster than ever, with segments like microvans rapidly losing ground while others like MPVs and SUVs outperforming the market 6-fold… A record 75 new nameplates have kick-started local production in the past year and new factories are opening on a monthly basis. General Motors for example is investing $14 billion and adding 5 million units of output through 2018 to open five additional assembly plants here. A more timid growth with ever more competitors in the market: prepare for blood and aggressive price wars. Where is China headed in the next 15 years? We will explore the Top 8 trends currently at play in the Chinese new vehicle market in order to decipher its mid-term evolution.

Kashgari farmer Jonway UFO A380Kashgar, Western China: the region has the greatest sales potential.

1. All eyes on the lower Tier cities prize

China grew 14% in 2013 to 22 million units, becoming the first ever new vehicle market above 20m annual units, another 7% in 2014 to 23.5 million and should improve by 5% in 2015 to just under 25 million deliveries. Analysts diverge in their view of the mid-term future for China. I remain highly optimistic, and it would appear Renault-Nissan CEO Carlos Ghosn agrees: “From time to time we have slowdowns, but fundamentally I’m still very optimistic on the fact that the long-term trend in China is up and carmakers should be prepared for that,” he said recently, pointing to the country’s low car ownership level compared with other major markets. If the big eastern cities along the coast like Beijing, Shanghai and Guangzhou are starting to peak out due to saturated ownership and stringent new registration restrictions put in place to curb pollution, there is still an enormous reservoir of growth lying in lower Tier cities.

Total vehicle sales – Big 3:

2000 2015 2030 (e)
China 1.8m 24.7m 40.2m
U.S. 17.8m 16.9m 18.5m
Europe 18.5m 15.8m 16.8m

(e): BSCB estimate

Before we go into any further regional detail, it’s worth establishing where long term potential Chinese sales stand. Last year, American car buyers bought 52 new vehicles per 1.000 residents in a saturated market. It seems difficult for any mature market to significantly outpace that rate in the short to mid-term. China stands at 17 new vehicles per thousand, and were it to reach the same buying rate as the U.S., it would push its total new vehicle market to a mind-blowing 70 million annual units. A level it will probably never hit, but progressively lifting the buying rate to 30 new vehicles per thousand in the next 15 years is a totally reasonable if a little conservative prospect. That would place China just over 40 million annual new vehicle sales by 2030, way above the U.S. and European markets combined – themselves for the most part stagnating over the period.

Geely Vision China 2015. Picture courtesy 91aiche.comThe Geely Vision is a hit in lower Tier cities.

As I detailed in my article STRATEGY: China light-vehicle market to reach 30 million units by 2020, a large part of China’s future growth will come from both the less developed regions of the country located in the hinterland and lower Tier cities that are now starting to benefit from denser dealership networks. By 2020, Western China’s share of total sales is expected to rise to 26%, up from 18% in 2011. In the meantime, the coastal region’s market share will drop from 60% to 43%, according to predictions from IHS Automotive. In the same vein, the bulk of the Chinese car market has resided up until now in Tier 1 and 2 cities – the biggest ones. As a result, there are now 128 vehicles per 1,000 residents in Tier 1 cities. This ratio falls to 54 in Tier 3 cities and 28 in Tier 4 cities, and these cities are now starting to have a significant impact on national auto sales as we will detail in the SUV section of this article. Note these Tier 3 and 4 cities are not all located in the hinterland, they are sometimes very close to Tier 1 and 2 cities, so the growth regions are not completely geographical but mostly demographic.

In less populated areas, the preference is still strongly towards Chinese manufacturers. If last year the prospects for domestic carmakers seemed cloudy, they have managed a complete turnaround thanks to a flurry of new affordable SUVs, and whereas it seemed like hinterland Chinese buyers would inexorably follow their eastern counterparts’ taste shift towards foreign brands, this is now less certain. The race is wide open and competition will gradually increase over the next two decades to woo rural populations getting a new access to car ownership. There are an estimated 100+ Chinese vehicle brands in activity today, when including truck and new energy manufacturers serving only limited parts of the country. This number will plunge rapidly to reach about 25 to 30 by 2030, and we will witness numerous price wars that will progressively shed the industry of the less-efficient manufacturers. Who will trigger and benefit from future Chinese growth?

24. Brilliance V3Brilliance V3 at Auto Shanghai 2015

2. Domestic brands on the brink of breakthrough

After a tough five years that saw their share market at home recede to roughly one-third of overall sales, Chinese manufacturers have rebounded in the past year, claiming 43.1% of the Chinese market over the first 3 months of 2015, up 4.2 percentage points from a year earlier. As evidenced by my coverage of domestic carmakers at Auto Shanghai 2015, these are constantly reinventing themselves with various degrees of dynamism, making the Chinese market the fastest-evolving in the world. However their progress is taking a different route than the one the government was hoping for two decades ago.

Starting in the eighties with Volkswagen, the barrier to entry for foreign carmakers in the Chinese market is a requirement to form joint-ventures with local partners in order to gain the right to manufacture locally, in essence the right to sell in high numbers in China. By doing this, the Chinese government was hoping for a technology transfer towards local brands. It didn’t happen. In fact, the domestic brands faring the best at the moment are ones that are for the most part not embroiled in partnerships with foreign carmakers and, tellingly, privately owned.

Geely GC9 China April 2015Geely GC9

Thanks to a new focus on strong brands and streamlined lineups, a few domestic actors are now enjoying surging sales at home. Great Wall spun off the Haval SUV brand to tremendous success in July 2013 and has seen its SUV lineup sales soar 71% year-on-year in April to 63.921 units. The Haval H6 is now among the three overall best-selling vehicles in the country. In January 2014 Geely got rid of the Emgrand, Gleagle and Englon brands to market its vehicles exclusively under its namesake brand, and along with an extremely impressive quality overhaul that is finally showing the mark of its 2010 purchase of Swedish manufacturer volvo, has managed to push domestic sales 45% in April to 38.648. The EC7 sedan remains the best-seller of its kind among domestic nameplates with 75.189 deliveries so far in 2015.

Chery is another example, deleting the Rely and Riich brands in September 2012 to concentrate on its namesake brand for passenger cars and Karry for commercial vehicles. However they have since spawned two sub-brands: Tiggo and Arrizo. Baby steps… Even though it is evolving at dangerously breakneck speed, ChangAn is another success story, placing three models among the 10 best-selling domestic vehicles in the country so far this year: the Eado sedan (70.231), CS35 SUV (62.110) and CS75 SUV (56.116). Led by Great Wall’s Haval, Geely and BYD, all relatively unscathed by joint-ventures with foreign actors and – most significantly – all privately owned, Chinese manufacturers have never been as close to world standards as now. And their improvements are set to continue at the same rate, shaping into a true threat for carmakers the world around by 2020.

4. VW Santana Karakul LakeVW Santana on the Karakoram Highway, Western China.

3. Foreign manufacturers caught in a race to luxury

In a context where domestic carmakers are finally finding their way to optimal sales rates, clearer brand identities and ever-improving quality coupled with aggressive pricing, foreign manufacturers may see their time under the sun reduce drastically over the next decade. Their capacity to compete with domestic actors relies on faster reactivity to fast moving trends, as demonstrated in their sales behaviour in 2015. The SUV explosion has caught both Volkswagen and Toyota by surprise and as a result they are losing significant market share this year. Hyundai and Kia are safe with their ix25 and KX3 tapping right into the small SUV craze and becoming instant blockbusters. Nissan is following at a distance.

If I was publishing this article 6 months ago, I would have said that Volkswagen is in the best place to benefit from the future growth expected in China’s less developed areas. However their failure to launch a small SUV lineup is worrying, at a time where Tier 3 and 4 cities are lapping up bargain-priced JAC, ChangAn and Zotye SUVs. Granted, Volkswagen is still and by far the most popular and most aspirational brand in China. During the first half of 2014 when sedan sales were still growing at 15%, the market share lost by Chinese manufacturers in the compact segment was almost exactly matched by market share gains at Volkswagen while Japanese, U.S. and Korean makers were flat. So Volkswagen is the best armed to compete with domestic brands in the sedan segment, but also the most vulnerable when and if Chinese carmakers reclaim lost ground in that segment.

Hyundai Mistra China 2014. Picture courtesy of auto.sohu.comHyundai Mistra

Two years ago, Volkswagen launched its New Santana with a starting price of 84.900 yuan ($13.700), only slightly more than the Geely EC7’s 69.800 yuan. Automotive News China quotes Zhang Lei, a 35-year-old office worker in Beijing who bought a New Santana last year: “People say German cars are of good quality, so why not buy a German car if it’s not expensive?” However since then Geely launched the new Vision at 52.900 yuan ($8.500), cutting the Santana by almost 40% and displaying some interior elements of a higher quality than a Santana. As a result, Volkswagen has launched a price war in recent months to keep its lower-end lineup competitive in the face of vastly improved domestic entries, at the risk of significantly eroding its profits in the region. Volkswagen is now caught between lowering their prices to better compete with domestic carmakers and maintaining its premium reputation.

Brand loyalty is low in China and more than 90 million car owners will replace their first vehicle in the next few years. Cutthroat competition is a new element in the market and in my view Hyundai and Kia could see a much larger increase in Chinese sales than Toyota and Volkswagen over the next decade. Not just because of a better reactivity to changing trends. Toyota and Volkswagen with undoubtedly launch affordable small SUVs to keep a foot in the market – albeit a couple of years late. Two more political and attitudinal elements may come into play. Firstly, Nippon manufacturers aren’t immune to future bursts of anti-Japanese sentiment, the like of which severely handicapped them a couple of years ago. 2015 marks the 70th anniversary of the end of WW2 and the rest of the year will be another sensitive period for them. Secondly, having launched in China less than a decade ago, Korean carmakers Hyundai and Kia are free of any poor quality perceptions dating from the nineties that are still plaguing them in some other countries and can grow unabated in the next decade.

Mercedes GLA China April 2015. Picture courtesy wolfexp.netMercedes started local GLA production and is best placed for explosive growth in China.

The Chinese luxury segment is already become the largest in the world and its weight will further increase over the next two decades, lifting Audi, BMW and Mercedes-Benz to a continuous string of worldwide sales records. The Top 3 German luxury carmakers, already ultra-dominant in the Chinese luxury segment, are poised to continue improving Chinese sales drastically, with Mercedes displaying the highest potential for explosive growth. In 2014, Audi sold 579.000 cars in China (+18%), with BMW at 456.000 (+17%) and Mercedes at 282.000 (+29%). Growth was cut in 2015 but should resume in the coming years and it is a realistic prospect to see Mercedes leapfrog both Audi and BMW to become China’s #1 luxury brand by 2025, simply because the Stuttgart manufacturer has completely refocused its attention onto the Chinese market now front and centre in its worldwide operations as its impressive display at Auto Shanghai hinted at. My forecast for 2015: Audi at 606.000 sales (+5%), BMW at 478.000 (+5%) and Mercedes at 335.000 (+18%).

Audi started manufacturing cars in China as far as 1991 while both BMW and Mercedes have been doing so for a decade, earning the 3 German carmakers credibility in the luxury segment that it will be near-impossible to erode in the next decade or so. At this stage only Infiniti, Volvo and Cadillac are manufacturing locally to avoid China’s 25% import tariff, but their sales remain modest: Volvo sold under 80.000 vehicles in 2014 (47% locally produced) while Cadillac delivered under 70.000 (57%) and Infiniti just 30.000 (8%). Acura announced it will start building locally soon, leaving the odd one out, Lexus, with no plans for local manufacturing despite a decade-long presence in the country and 75.000 sales in 2014. Lincoln for its part is enjoying a fast and furious all-imported start with 3 of its Top 10 dealers globally by sales now located in China only 12 months after landing in the country.

Haval-H1-China-November-2014.-Picture-courtesy-of-auto.qq_.com_The Haval H1 is one of dozens of new Chinese SUVs launched in the past 12 months.

4. Cashed-up urban buyers now ditching sedans for SUVs…

Disposable income is on a steep rise for the majority of the Chinese population and their car purchase patterns are changing accordingly, with urban and rural buyers each displaying widely different tastes than they were just two years ago. Last October, sedan sales dropped 1% from a year earlier for the first time in years, marking the start of a shaky period for this once-thriving segment in China. In urban areas, more than one-third of buyers now opt for an SUV when the time comes to replace their first vehicle vs. 25% for China overall. After soaring by 36% in 2014 to 4.1 million units, SUV sales are accelerating further this year with a 49% year-on-year surge over the first 4 months of 2015 to 1.79 million units, hinting at an annual rate of over 6 million sales…

China – Top 10 SUVs and sedans 2015 year-to-date:

Pos SUV model 2015 /14 Sedan model 2015 /14
1 Haval H6 118,516 26% VW Lavida 170,168 -12%
2 VW Tiguan 88,609 1% VW Santana 114,479 7%
3 JAC Refine S3 66,295 new VW Jetta 107,680 7%
4 ChangAn CS35 62,110 71% Ford Focus 99,675 -26%
5 ChangAn CS75 56,116 new Hyundai Elantra 96,713 30%
6 Haval H2 56,074 new VW Sagitar 96,173 -6%
7 BAIC Huansu S3 49,738 new Nissan Sylphy 89,995 -8%
8 Ford Kuga 42,593 -3% Hyundai Verna 84,821 14%
9 Nissan X-Trail 41,942 182% VW Passat 84,275 -15%
10 Zotye T600 39,307 302% Chevrolet Cruze 80,170 -6%

Seven of the Top 10 best-selling SUVs in China so far in 2015 are Chinese, four are all-new and only one (the Ford Kuga) sees its sales decline year-on-year. Reversely, all of the Top 10 best-selling sedans in the country are foreign but 6 out of 10 are in decline, including the #1 seller – the VW Lavida (-12%) – with the Ford Focus losing the most ground at -26%. In what may be the most interesting reversal of fortunes in the past few years, thanks to a flurry of affordable models all launched in the past 24 months, domestic manufacturers are now dominating the SUV segment with a record 56% share, evolving at double the sales level as that of a year ago.

ChangAn CS75 China July 2014. Picture courtesy of auto.sohu.comThe ChangAn CS75 has found 109.000 buyers since launching exactly a year ago.

According to LMC Automotive, SUV buyers are mostly residents of Tier 3 and Tier 4 cities, traditionally more fond of Chinese car brands mainly because of more affordable prices, but also less dense dealer networks for most foreign manufacturers. When hit full frontal by lower-end Volkswagen, Chevrolet and Kia sedans, domestic carmakers found the perfect counterattack in designing attractive-looking SUVs based on their compact sedans and typically priced from 70.000 to 100.000 yuan (US$11.000-16.000). Even though they don’t offer the same driving experience as all-wheel-drive SUVs, these are good enough for Chinese customers in Tier 3 and Tier 4 cities. Mission accomplished.

Wuling Hongguang China September 2014. Picture courtesy of cheshi.com2The Wuling Hongguang has transformed the Chinese car market forever.

5. … while rural buyers switch from microvans to MPVs

If urban dwellers are abandoning their entry-level sedans to lap up an increasing choice of Chinese-branded SUVs, their newly prosperous rural counterparts are also moving upwards, ditching microvans for low-cost MPVs. In 2014, the MPV segment was the fastest-growing in the country with sales surging 47% to 1.91 million units just as microvan were losing 17% to 1.33 million sales. In 2015, MPVs are up by a further 28% so far and should end the year just under 2.5 million units. The good news for Chinese manufacturers is that 85% of all MPVs sales go to domestic brands, being a segment mostly popular in rural areas.

Price comparison – Wuling MPVs and microvans:

Model Cat April sales Price range (yuan) Price range (US$)
Wuling Journey MPV 4,011 66.000 – 77.000 10.600 – 12.400
Wuling Hongguang MPV 53,086 44.800 – 69.800 7.200 – 11.250
Wuling Hongguang V Micro 25,506 42.800 – 51.800 6.900 – 8.300
Wuling Rongguang Micro 17,475 41.800 – 46.800 6.700 – 7.500
Wuling Sunshine Micro 21,005 29.800 – 46.000 4.800 – 7.400

Wuling Sunshine microvan – Hongguang MPV sales comparison:

Model 2009 2010 2011 2012 2013 2014 2015(e)
Wuling Sunshine 699,037 754,961 731,749 523,841 455,718 308,668 269,000
Wuling Hongguang 0 5,000 177,000 316,217 530,050 750,019 660,000

The sole instigator of this hugely momentous trend is the Wuling Hongguang, originally introduced in September 2010 and at first classified as a light commercial vehicle – it was then considered as just a larger microvan. The Hongguang didn’t appear inside the Top 5 LCV best-sellers until February 2012 (24.694 sales) but topped the Chinese charts for the first time in January 2013 and the following month was selling almost 30.000 more units than any other nameplate in the country. It went on to be the best-selling vehicle in the country in both 2013 and 2014, with its monthly sales record standing at an out-of-this-world 81.153 units in January 2014.

Baojun 730 China September 2014. Picture courtesy of auto.sina.com.cn230.000 Baojun 730 have hit Chinese roads in just 9 months.

As I detailed in my article China April 2015: Wuling Hongguang V takes control, the leap from microvan to MPV is very significant, representing a 50% price hike even though the rates remain minuscule in Western terms: the Hongguang starts at 42.800 yuan (US$7.200) vs. 29.800 ($4.800) for the Wuling Sunshine, the all-categories best-seller in China until 2012. Microvans are traditionally used by families, small companies and taxi operators in rural areas and small towns to carry goods as well as passengers. While both the Sunshine and the Hongguang can carry five to eight people, with per capita disposable income in rural China leaping 12% to 8.900 yuan, rural buyers are snapping up the Hongguang like hot dumplings simply because they can afford to.

What the Chinese market is experiencing right now with the Wuling Hongguang is similar to European car buyers suddenly switching from purchasing 600.000 annual VW Golf to as many annual VW Passat in a matter of three years, or American consumers completely ditching the Toyota Camry to replace it with 450.000 annual Toyota 4 Runner.

It took a lot longer for other domestic manufacturers to cotton on to the Hongguang success and what it meant for the microvan category (death) than it did for them to understand the SUV craze. In fact, SAIC-GM-Wuling is reinventing the category once again with the launch of the slightly more upmarket and extraordinarily successful Baojun 730, clocking an incredible 230.000 sales in its first 9 months in market. The Hongguang clones Chana Honor, Dongfeng Fengguang and BAIC Weiwang M20, although dynamic, are still far below. The future of the MPV segment is ever more upmarket: Wuling launched the much larger Journey a few months ago, and Brilliance unveiled the Huasong MPV-exclusive brand at Auto Shanghai 2015 to compete with Buick’s GL8. Expect Wuling to regularly revive the category to maintain its supremacy.

Dongfeng Rich 2015. Picture courtesy chinaautoweb.com2015 Dongfeng Rich

6. Pickup trucks the largest untapped segment

Now that the SUV and MPV segments are truly taking off in China, mimicking many light vehicle markets around the world, the last frontier is the pick-up segment, currently plagued by outdated legislations but home of the greatest sales potential of all. Pending a legislative adjustment, I foresee Chinese pickup sales reaching 10% of overall sales by 2030 – or 4 million annual vehicles vs. just 1.9% and 200.000 nowadays. Pickups are where Chinese manufacturers perform their best, as demonstrated by their relative success in export markets. So what is not working at the moment?

In 2003, Beijing implemented the Road Traffic Safety Law which let city governments decide whether to allow pickups to drive on their streets, and most chose to classify them as commercial vehicles and banning from entering. Yes you read that right, pickup trucks are not allowed to drive into most Chinese cities. But it doesn’t stop there: Automotive News China reports that to ease congestion during holidays, Chinese traffic regulators let sedan drivers use highways toll free whereas pickup drivers must pay. This may have made sense a decade ago when pickup trucks were the only vehicles of such size on the road along with medium and heavy trucks. But with the surge of SUVs, this is no longer true. Besides, under existing regulations, microvans – also used in rural and suburban areas to carry people and goods – are considered passenger vehicles, and therefore allowed into cities…

GAC Gonow GP150GAC Gonow GP 150 at Auto Shanghai 2015

However unfair this legislation is, it has had a devastating effect on the Chinese pickup market. Roughly 435.000 new pickups were sold in China in 2014, or just 1.9% of the total vehicle market and with sales down 4% year-on-year they are also losing market share. Despite these restrictions, market leader Great Wall still manages to sell an average of 10,000 pickups each month in China, and it is still a very dynamic segment, with at least 16 Chinese manufacturers currently offering a pickup lineup. I spotted the all-new 2015 Dongfeng Rich in Mohe in far north China, while GAC Gonow unveiled a rather good-looking GP150 pickup at Auto Shanghai and Great Wall launched a new variant of the Wingle late last year.

Paradoxically, as opposed to sedans, SUVs and MPVs, pickups are the one single segment where Chinese manufacturers can already compete with foreign automakers in mature export markets such as Italy, the UK, South Africa and Australia where the Great Wall Wingle ranked among the Top 50 best-selling nameplates in 2012 and Foton is currently making some interesting inroads with the Tunland. Understandably given the current restrictions, global automakers haven’t bothered venturing into the Chinese pickup market just yet. Only Isuzu and Nissan currently sell quickly facelifted versions of antediluvian models, but the potential for pickup sales in China is enormous, commercially and privately.

 

Ford F-150 Raptor Kashgar ChinaFord F-150 Raptor in Kashgar, Western China

With Chinese car buyers progressively americanising their tastes, it is no real surprise to see at least one Ford F-150 Raptor and Toyota Tundra in each northern Chinese city I visited this year, big or small. Despite astronomical prices and driving restrictions, Chinese consumers are still privately importing these monsters. The demand for pickup trucks is latent and almost screaming when you visit the country. It is apparent in the commercial segment where a recent transfer from microvans to mini pickups can be seen  – keep in mind the latter are considered passenger vehicles and therefore are able to grow sales freely. Result: the Wuling Mini Truck has topped the LCV sales charts a couple of times in the past 6 months.

But part of the SUVsation of the world car market also means a large part of pickup trucks are now purchased and used in the same way as SUVs, not just for commercial hauling. As Automotive News points out, if municipal restrictions on pickups are abolished, farmers could drive their pickups to go shopping in cities. Likewise, residents in coastal areas could use their pickups to tow boats or stow surfboards. It’s a matter of when rather than if, and once pickups can be driven freely across the country, expect a gold rush in the same vein as the one we are currently witnessing for SUVs and MPVs as pickup sales are bound to grow exponentially from that moment on.

Used car market in China. Picture courtesy of 51auto.comThe notion of used car is a new concept in China.

7. Prepare for a used car explosion

Last March, China’s largest search engine Baidu – dominating a market where Google is banned – joined a U.S. private equity firm and hedge fund to invest $170 million in China’s largest used car auction website Uxin. It is the latest round of funding raised by Uxin to expand a new trading platform designed to allow auto retailers to sell used cars directly to individuals. Last year, China’s used car market generated transaction volumes of $58 billion, a 26% growth from a year earlier while volumes are up 16% at 6.05 million units vs. +7% for the new vehicle market. Up until very recently, the very concept of a used car was a rather alien notion in China given how recent the uptake of cars in the country is. Moreover, in China there is a strong cultural preference for new items, rather than those tarnished by previous ownership, and without regulations, skepticism over the quality of used vehicles was justified, reports Autotalk NZ. But this is all changing as the market matures.

China – New and used vehicle sales evolution:

2000 2015 2030 (e)
New vehicles 1.8m 24.7m 40.2m
Used vehicles 0.2m 7.0m 41.5m

(e): BSCB estimate

At the moment one used vehicle is sold for every four new ones in China, a diametrically opposite situation as the one observed in mature markets such as the U.S. and Europe where three to four new cars are used for every new one. But at the current rate, the number of used cars changing hands annually will even up with new ones by 2030. Sedans still account for the majority of used cars currently sold in the country (57%) above buses (16%), trucks (14%), light commercials (9%) and SUV (3%), reflecting the dominant structure of the market of the past decade. This too will change, when SUVs and MPVs currently sold as new will start hitting the used car market in 5-7 years time.

Nowadays used car sales are still a largely unregulated area, with 95% of used car transactions still made privately and escaping sales taxes. Large manufacturers are however slowly looking to enter the used market by reselling their own products second-hand complete with quality guarantees: Peugeot already has 700 certification centres around the country, and Nissan, Audi and Volvo are following. Stringent new anti-pollution laws limiting the number of new registrations in he main big cities have also helped fuel increasing used car sales: they already are licensed and therefore unrestricted – a clear oversight by governments as these used cars typically pollute more than new ones and should instead be replaced, the way Europe has done with numerous scrappage schemes.

DENZA wird in einem deutsch-chinesischen Gemeinschaftsunternehmen von Daimler und BYD in Shenzhen gefertigt. / DENZA is manufactured by a Sino-German joint venture of Daimler and BYD in Shenzhen.Denza EV

8. The electric vehicle question mark

I have said it and will say it again, the current success – or lack thereof – of new energy vehicles has nothing to do with consumer taste but everything to do with government policies. Cue Japan, California and Norway: having implemented the largest incentives for new energy vehicles and consequently displaying the highest hybrid and EV sales ratios in the world. China has a well-documented tradition of imposing stringent government mandates onto the car market (joint-ventures with local partners, pollution-curbing new registration limits…) and could lead the world in terms of electric vehicle adoption, if it decides to. With significant air pollution problems plaguing most large cities and limited oil resources, the Chinese government considers the uptake of electric cars a priority. But is it doing enough to encourage new energy vehicle sales? Carlos Ghosn said not really at the latest Shanghai Auto Show.

Chinese EV sales are quadrupling so far in 2015 compared to last year but at 26.581 units in 3 months they still only represent a mere 0.4% of the overall market. The BYD Qin hybrid sedan has been the best-selling new energy vehicle in China ever since its launch in December 2013, totalling 2.625 sales in April. This is to be compared with a 200-300 sales monthly average for the Tesla Model S in China and roughly 1.500 in the U.S. Still, the question mark remains as to whether EVs will truly have an impact on the overall Chinese market in the short to mid-term. It all depends on the Chinese government. Chinese punters will buy electric if they are mandated to: a recent visit to Kashgar in Western China showed all scooters in circulation in town to be electric.

Tesla Model S ChinaTesla has been struggling in China so far.

Among the various Chinese government mandates in place to encourage sales of new energy vehicles:

– All EVs are excluded by the new registration plate quota applied in China’s eight largest cities.

– Subsidies of up to 55,000 yuan (about $9,000) per EV vehicle, elimination of a 10% sales tax on some EVs.

– Subsidises the construction of battery charging stations in various cities proportioned to the EV and plug-in hybrid sales in these cities. The aim is to install 140.000 charging stations this year vs. just 20.000 in place last year. The government’s plan calls for covering 16,000 kilometers (10,000 miles) of highways with fast-charger stations every 50 kilometers (31 miles) by 2020.

– All manufacturers selling in China need to display a fleetwide average consumption of 5L/100km (47 mpg) by 2020.

– Foreign automakers are required to develop EVs with their Chinese joint venture partners. This has prompted Toyota, traditionally EV-weary, to launch one EV vehicle with each Chinese partner later this year. They however concede these are purely compliance vehicles and their focus will remain on hybrid technology.

Most manufacturers had at least one EV model to show at Auto Shanghai, but these looked more like compliance vehicles than genuine best-sellers. Elmar Degenhart, CEO of supplier giant Continental AG said told Automotive News China “We are convinced that China will turn into the biggest market for electrification technologies. With the support of the government and regulation, the speed in that direction is developing quite rapidly.” The ball is in your camp President Xi Jinping.

– – –

Tesla Model S: Believe the hype? Yessir.

May 27th, 2015 1 comment

Tesla Model S Sydney 2015Which one looks more expensive?

The Tesla Model S is without a doubt one of the most impressive success stories of the past 24 months. It ranked #1 in Norway not once, but 3 times: in September 2013, December 2013 and March 2014, totalling 22.000 worldwide sales in 2013, up to 33.000 in 2014 and on track for 40.000 this year. Tesla’s market valuation has been the subject of much talk, being more akin to a high tech company than a car manufacturer: at $26 billion, it is higher than that of Fiat Chrysler ($20 billion) and just under half that of Ford or General Motors, whereas Tesla produces in one year what GM or Ford produce in one day. All this while posting a $US154 million loss in the first quarter of 2015, a three-fold increase over the same period in 2014 and not expecting to make a profit until 2017…

Tesla Sydney dealershipThe Tesla Sydney dealership, one of only 3 in Australia – the two others are in Melbourne.

Should we all believe the hype? There’s only one way to find out. As the Model S rolled out in Australia in early 2015, it’s time for me to test drive this baby and make up my mind once and for all. Despite repeated requests, Tesla won’t communicate official sales figures for Australia (you may have noticed the carmaker does not appear in the local sales charts), citing global quarterly reports instead. Reading between the lines while speaking with the Tesla Sydney team, I learnt that Tesla sales in Australia are not as limited as I expected, with over a hundred shipped in only a couple of months instead of the few dozen I had anticipated. A figure in line with the 178 Infiniti and 177 Maserati sold in the country over the first 4 months of 2015.

Telsa Model S Blue. Picture courtesy caradvice.com.auAlso exists in blue…

I drove the Tesla Model S P85+ fitted with the $7990 optional high-performance, which lifts its price to AUD$ 135.880 (US$ 105.330). Seems like a lot, but it’s not, because in terms of refinement and performance, it’s roughly equivalent to a BMW M6 Gran Coupe worth $300k here. I wanted to test the Tesla Australia experience as a whole so signed up for a rather anonymous test drive enquiry to test their website’s claim that “We’ll do our best to reach you within one day.” Promises, promises. Fact is, a Tesla rep was on the phone with me only a few hours after my enquiry. Once they realised I was media, my enquiry was fast-tracked and I picked up my burgundy Tesla for the day less than a week after that. So far so good Tesla. I did slap myself on the wrist though when Tesla politely refused to lend me the car for two days. Right. It’s not like I can refuel in the middle of nowhere Australia and come back the next day.

Tesla Charging stationsTesla charging stations: still way too few of them in Australia.

Australian charging stations are still far and few between. In fact, apart from the Sydney store there is only one additional Tesla charging location in town, near the city centre so no use to me on the day. Let’s get the range anxiety out of the way first: no I did not fall flat and embarrassed in the middle of nowhere, but it was a close call. I opted for a 130km return trip to Royal National Park south of Sydney, which should have been well within the bounds of my ride’s claimed 500km range. However with a couple of hours of city driving, a few hardcore accelerations and a peak of 160km/h on the highway, the battery indicator had turned to a very uninviting dark brown by day end: the car’s own way to let you know that you are in deep sh.. I mean trouble. To its credit, it kept me constantly updated km after km and for each trip you input it gives you the return trip consumption. Very handy and making it almost impossible to run out of power. The claimed 500km range is indicated by a nice red line on the central console, but unless you spend the entire day braking (and therefore recharging the batteries) it is almost impossible to stick to that level, supposedly reached at a constant 105 km/h. It didn’t work quite that way for me, even on the highway.

Tesla Model S. Picture courtesy caradvice.com.auIs it just me or the Tesla’s rear could be mistaken for a Jaguar?

Stepping inside the Tesla, you instantly forget this is a 4-door sedan as it does feel like a sports car all through and through. The seating position, the instruments and most of all, the acceleration. The range topping P85D, in Australia next month, is said to be the fastest-accelerating production sedan ever, hitting 100 km/h in only 3.4 sec. The P85+ I drove does this in 4.4 sec. And I can confirm that this mind-blowing figure that shatters all pre-conceived ideas I had about electric cars, is legit. My eye sockets still bear the imprints of my astonished eyeballs retracting inside as I reached the next block in less time than it took to write these last 3 words.

Happy Tesla driverImpressed Tesla driver.

Why so surprised? I hear you ask. The one single reason, apart from the fact that you don’t expect that kind of behaviour from a two tonne sedan, is the total absence of noise. Hitting 0 to 100 km/h in just over 4 sec without hearing a hint of exalted roaring from an engine finally unleashing the torque it’s been gagging for is somewhat of an alien experience. In fact I have never experienced such a thing before. It catches you almost every time because absolutely nothing from the car tells you it’s working hard. Effortless yet earth-shatteringly fast. It’s a different sensation altogether, and I now understand why a lot of punters are saying Tesla is manufacturing the car of the future, today. I was worried silence would kill the excitement of driving a fast car, but you have to drive it to realise this is as it should be, and as it should always have been.

Tesla Model S interior. Picture courtesy themotorreport.com.auTesla’s giant central LCD console is as impressive in real life as it is here.

The dashboard’s oversized touchscreen was perhaps the main feature I wanted to see to believe, and if it feels a little distracting for the first ten minutes, it is surprisingly user-friendly and becomes a second nature after half an hour on the road. It controls pretty much everything you want to control in the car, from the suspension mode to the rooftop opening, navigation, voice recognition, music… You name it, it does it. It’ll be hard to get back to anything less. Exterior design has never been Tesla’s forte in my opinion, but that’s just my opinion because as soon as I launched the car, people started pointing and showing their friends. I was the attraction in town, even during a quick drive to one of the wealthiest suburbs in Sydney, Mosman. Although I think it just kinda looks like a Jaguar, a surprisingly high amount of people are clearly trained to it and notice it very quickly. If you want to show off in a car, in 2015 Australia you’d be better off buying a Tesla than a Porsche, so common these days.

No engineNo engine under the bonnet…

It’s always fun to open the bonnet and find storage space, in addition to an already cavernous boot. There are no spare tyres: “One call and a Tesla rep will come and change the tyre for you”. But what if I’m miraculously in Alice Springs all of a sudden? Like the constant broadband wifi connection that goes with the car for the first two years, it’s also little things that show Tesla is taking a different route to reach luxury nirvana and I have to say I’m liking almost everything I’m seeing. Almost, because of the near absence of storage inside the cockpit (yes it’s a sports car but I need somewhere to put my latte so it doesn’t spill pretty please), and the handles supposedly coming out of the doors when sensing your approach having a few hiccups, which actually prevents you from opening the door: until they retract, there are no handles to handle. But fear not: like a computer, the Tesla Model S gets software updates around the clock so it’s easy to fix teething issues. I told you, the future. Can I keep it?

Categories: Australia

Montenegro Full Year 2014: Dacia Sandero the favourite

May 26th, 2015 No comments

Dacia Sandero Montenegro 2014. Picture courtesy honestjohn.co.ukMontenegro is the only country in the world to crown the Dacia Sandero in 2014.

* See the Top 42 All-brands and Top 200 All-models by clicking on the title *

For the first time on BSCB and thanks to Siniša Bulatović and Montenegrin publication Autoshop Magazin, I can share with you official sales data for Montenegro. 2,167 new vehicles found a buyer in the country in 2014, with Volkswagen the most popular manufacturer at 13.8% followed by Dacia (10.8%), Renault (10.7%), Toyota and Skoda. Mercedes manages to hop to an outstanding 6th spot, with Audi at #10, BMW at #15 and Land Rover at #17.

VW Golf Montenegro 2014. Picture courtesy of largus.frThe VW Golf ranks #2 in Montenegro in 2014.

In the models ranking, the Dacia Sandero dominates head and shoulders with almost double the sales of any other nameplate in the country and a 7.2% market share. Surprisingly, this makes Montenegro the only market in the world where the Sandero is officially #1 and the 6th where a Dacia is the best-seller along with RomaniaAlgeriaMoroccoMoldova (Logan) and Bulgaria (Dokker). The VW Golf follows at 3.9% with the Skoda Octavia rounding up the podium at 3.7% just above the VW Polo at 3.6%. Notice also the Renault Captur at #5, Toyota RAV4 at #6 and Mazda3 at #19.

Full Year 2014 Top 42 All-brands and Top 200 All-models below.

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Categories: Montenegro

Malaysia April 2015: Perodua almost at 40% share, Proton at 11%

May 26th, 2015 No comments

Perodua Axia Malaysia April 2015Perodua Axia

* See the Top 46 All-brands ranking by clicking on the title *

Paying for the pull-forward sales of March (+14%) in anticipation of the GST implementation, the Malaysian new car market crashes down 23% year-on-year in April to just 45.187 registrations, pulling the year-to-date total in negative at -2% and 213.493 deliveries. According to local website Motor Trader, The Malaysian Automotive Association (MAA) “believes that May sales will also be as weak due to the general sentiment of consumers who have found their cost of living increased. During this period of ‘adjustment’, any inclination to spend a large sum of money on a new car might be less likely for many”. The two local manufacturers behave in polar opposite ways this month: Perodua manages to keep its sales stable year-on-year thanks to the tremendous success of the Axia and increases its market share to a record 38.9%. Honda (-5%) and Toyota (-34%) take advantage of Proton literally imploding at -51% to just 4.972 units and 11%, the manufacturer’s lowest ever market share at home… Notice also Mercedes up 68% on April 2014 to #6 and Subaru up 64% but Ford down 68% and Mitsubishi down 76%.

 

Previous month: Malaysia March 2015: GST implementation pushes market up 14%

One year ago: Malaysia April 2014: Perodua teases 30% share milestone again

Full April 2015 Top 46 All-brands Ranking Table below.

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Categories: Malaysia

Georgia Full Year 2014: Photo Report and analysis

May 26th, 2015 No comments

Toyota Corolla Georgia 2014bThe Toyota Corolla could be the best-seller in Georgia in 2014.

Today we get a more detailed insight into the car parc of Georgia, an ex-USSR state located in Caucasus with Russia to the north, Turkey, Armenia and Azerbaijan to the south and the Black Sea to the west. Thanks to Marco D’Abbraccio we can get a better understanding of this very secretive market. With Full Year 2014 sales estimated by LMC Automotive at 5.500, this is a very limited market from where no official sales data has seeped through so far. Its location at the crossroads of Eastern Europe and Western Asia transpires in its car parc.

All Photos below © Marco D’Abbraccio

1. Ford Taurus Tbilissi policeFord Taurus Interceptor Tbilissi Police

The Georgian car parc is a unique mix that reflects various economic ties with neighbouring countries. As it was the case in Eastern Russia, a large part of the Tbilissi car landscape is composed of affordable right-hand drive used imports from Japan coming through Georgia via beforward.jp, with the Toyota Ist and Mitsubishi Delica among the Top 5 most common cars there, used imports from Europe notably the Opel Astra and Vectra, and high end Mercedes from the 1990s as well as luxury SUVs.

2. Fiat Linea Georgia 2015Fiat Linea

As far as new cars are concerned, our bet on the title of 2014 best-seller in Georgia is on the Toyota Corolla produced in neighbouring Turkey and therefore imported with ease into the country. Interestingly there doesn’t seem to be that many more successful Turkish models, apart perhaps from the Fiat Linea pictured above. The Skoda Octavia could also compete for the #1 spot, making Georgia lean towards Eastern Europe, and the Toyota Land Cruiser is also a contender, this time linking Georgia with such markets as Kyrgyzstan across the Caspian Sea or even Mongolia.

7. BMW X5 Georgia 2015BMW X5

Affordable SUVs such as the Kia Sportage and Hyundai Santa Fe are also popular, this time mimicking steppe trends and Azerbaijan best-sellers, with which Georgia shares a border. Some Iranian influence in the shape of a handful of Iran Khodro Samand taxis circulating in Tbilissi, as well as a pinch of Uzbek imports with (only a very few) Uz-Daewoo Nexia spotted by Marco achieve to complete a very multi-cultural new car landscape indeed.

3. Zhiguli Georgia 20154. Gaz 24 Volga 3Zhiguli and GAZ 24 Volga

One of the main learnings about Georgia is that although the countries keep strong ties with most of its neighbours, it has all but severed car communication with ex-ruler Russia. If a lot of Zhiguli and GAZ Volga can still be spotted – mainly outside of big cities – the proportion of Russian models in the Georgian new car market is close to zero…

4. Opel Vectra Georgia 2015Opel Vectra in Tbilissi, Georgia – April 2015.

Active manufacturers in the country that have developed a reasonable network of dealerships include Volkswagen, Hyundai, Kia, Toyota, Skoda and Nissan. As we have seen in 2012-2013, given the small size of the market a large government order can vastly impact the list of best-sellers. After the Transit, Ford looks like it has benefited from another group order in the form of Ford Taurus Interceptor used as Tbilissi Police cars. However this order is much smaller and doesn’t enable Taurus any claims to the #1 title.

6. Toyota Will in Bodbe5. Gaz M21 Volga 1956Toyota Will used Japanese import, GAZ M21 Volga

Other popular models include the Hyundai Solaris, Renault Logan and Nissan Micra/March. Many thanks to Marco D’Abbraccio for this detailed reporting on the Georgian car landscape. If you have access to official sales data for this country, please ensure you get in touch by commenting on this article.

Previous post: Georgia 2012-2013: Ford Transit dominates, almost no Ladas left

The Photo Report continues below.

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Categories: Georgia