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Strategy: How the Chinese are setting themselves up for success (Part 3: Eastern Europe)

April 19th, 2014 3 comments

Vortex Tingo Russia 2012TagAz has been manufacturing the Chery Tiggo in Russia – rebranded Vortex Tingo.

* This is Part 3 of 5 in my series on Chinese carmakers abroad. See also Part 1 (Africa)Part 2 (Latin America)Part 4 (Asia) and Part 5 (Mature markets) *

As illustrated in Africa and Latin America, Chinese manufacturers have been working extra-hard under the radar to secure less developed markets that will form the bulk of global car sales growth over the next couple of decades. Their approach to Eastern Europe is very similar. There are currently three Chinese assembling hubs in the region – in Russia, Ukraine and Bulgaria – acting as a very convenient springboard for further expansion throughout the continent, including all the ex-USSR nations and potentially Western Europe in the longer-term.

Police Lifan Solano in Moscow, Russia

Even though their market share is limited to just under 4% for now, Russia is currently the overseas country delivering the largest volume for Chinese manufacturers, and even become the first overseas country to buy more than 100,000 Chinese passenger cars annually with 102,389 sales in 2013. That’s up a whopping 23% on 2012 in a market down 5%. Import tariffs are too high to allow sizeable direct imports from China, so the 4 main Chinese carmakers present here have already all invested very significantly to assemble locally and as a result are registering extremely strong growth rates in 2013: Lifan is up 34% to #24, Geely up 55% to #25, Great Wall up 39% to #28 while Chery is slower at +4% and #29.

Chery Amulet Russia 2007The Chery Amulet was one of the first successful Chinese models in the region.

Chery has the longest (and most troubled) history in Russia: the Chery Amulet ranked within the monthly Top 20 as early as 2007 but the brand saw sales plummet on the back of poor quality perception, to which Chery responded by rebranding their cars Vortex. Since last year though, the Chery brand is back in Russia with encouraging success. Model-wise, the Great Wall Hover is the best-selling Chinese vehicle in Russia in 2013, up 37% to #41, followed by the Lifan X60 (#42), Geely Emgrand (#46), Geely MK/MK Cross (#54), Lifan Solano (#67) and Chery Tiggo (#93).

Geely CK Ukraine March 2012The Geely CK has managed to top the Ukrainian models ranking 3 times already.

Although Russia does not qualify as a “less developed” market, its structure heavily weighted towards low-cost models like the Lada range and Renault-branded Dacias make it one of the biggest opportunities for Chinese manufacturers worldwide. However in Eastern Europe too, it’s in the developing car markets that we see the Chinese grab their highest market share. Ukraine is the only market in the world with regular available sales data outside China to have repeatedly crowned a Chinese model in the monthly rankings. The Geely CK ranked #1 there in July 2012, December 2012 and January 2013 and finished 2013 in third position.

Geely SC7 Belarus 2013The Geely SC7 will be assembled in Belarus later in 2013

But the CK is not a one trick pony: Geely was simply the most popular brand in Ukraine in January 2014 with 12.7% market share above Toyota (11.4%)! The Geely Emgrand EC7 peaked at #2 in September 2013, the MK-2/Cross was #15 in March 2013 and the MK was #19 last September 2012. All in all Chinese carmakers currently command around 10% of the Ukrainian car market.

ZAZ Forza Ukraine 2013Chery sells the Fulwin 2 as the ZAZ Forza in Ukraine

Other Chinese actors in Ukraine include Chery, 25th brand in 2013, BYD up 144% to #27 Great Wall at #32 and MG at #34, placing the MG 350 at #77 in April 2013. Another example of Chinese manufacturers immersing themselves in the local culture, Chery manufactures at the local ZAZ plant from CKD kits and sells the Chery Fulwin 2 as the ZAZ Forza which ranked among the Ukrainian Top 10 from May to August 2012.

Great Wall Voleex C10 Bulgaria June 2012bBulgarian police has already adopted the Great Wall Voleex C10

Another milestone event for Chinese manufacturers in Eastern Europe was the opening of the Great Wall factory in Lovech, Bulgaria, in February 2012. This is the very first automotive plant set up in Bulgaria and as a result Great Wall has played the ‘made in Bulgaria’ card to the fullest since, with great results: it was #10 brand in the country over the first 6 months of 2012 and quickly went up to #2 overall with 10.5% share below just Volkswagen in October and December 2012, placing the Steed pick-up in pole position that same month, the Voleex C10 at #2 in April 2013 and the Hover at #6 in December 2012. 2013 was a little more discreet however for Great Wall in Bulgaria as a whole.

Great Wall’s Bulgarian hub is planned as the focal point for their expansion throughout Europe, and Bulgarian exports have already started to trickle down in sales stats for countries like Macedonia where in December 2012 Great Wall was the #10 brand with 4.7% share and the Voleex C10 was #5 model at 3% share. This expansion will likely reach more neighbouring markets in the near future, once again the less mature ones like Serbia (where Chery ranked #25 in 2012), Bosnia, Kosovo, Montenegro and potentially Albania and Moldova.

A fourth Chinese assembly hub in the region kick started in 2013 in Belarus, where Geely has set up a joint venture with Belarusian company BelDzhi and is has launched the locally assembled SC7, ranking 19th overall in 2013 with 1.2% of the market and pushing Geely up to #18 brand with 1.5% share for its first year in market. The assembly facilities, located in Zhodino and Borisov, are scheduled to produce 60,000 cars/year for the first three years, with capacity potentially doubling in 2017. From that 4th hub, exports towards Russia and Kazakhstan are on the cards.

Launching from their 4 hubs in Russia, Ukraine, Bulgaria and Belarus, Chinese carmakers are getting ready to expand further in Eastern and Western Europe in the very near future. Russia will remain by far their biggest opportunity in the region with local assembly plants already in place and ready to gear up to surf on the growing demand for affordable cars in that market.

Stay tuned for Part 4 of this series: Asia!

Central & Eastern Europe: 2002-2010 Historical Data now available

June 11th, 2012 1 comment

The Dacia Logan was the best-selling model in Central & Eastern Europe from 2005 to 2008

* See the direct links to 6 new Historical Data articles by clicking on the title! *

Today I have created a new category on the right hand side of the site: Europe (Central & Eastern) , to house Historical Data for the region spanning the last decade as this market is distinctly different from Western Europe. Central & Eastern Europe figures include Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia, with Croatia and Serbia added in 2008.

Dominated by the Skoda Fabia with a huge 120,000+ annual sales in the early noughties, the Central & Eastern Europe models ranking took a Romanian turn in 2005 when the Dacia Logan took the lead. It stayed in pole position for 4 consecutive years before the Skoda Octavia became the consumers’ favourite in 2009.

Direct links to 6 Historical Data articles below, including all model sales for 2002 & 2003

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Central & Eastern Europe 2010: Skoda Octavia strengthens lead

February 15th, 2011 No comments

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

The Central & Eastern European market is down 5% in 2010 at 880,043 registrations. The Skoda Octavia, #1 in Poland, Czech Republic and Slovakia, gains 8% to improve its market share to a very solid 7.2%. Whereas it is now over 60,000 sales again, its little sister the Skoda Fabia drops under 40,000 at 39,862 (-12%) and 4.5% market share at #2.

#1 in 2008, the Dacia Logan suffers from the weakness of the Romanian market and drops 15% at 31,246 sales and 3.6%, followed by the VW Golf gaining 1 spot in 4th (2.8%). The Opel Astra (+34% in 6th) and VW Polo (+23% in 10th) deliver the best performances of the Top 10.

Previous year: Central & Eastern Europe 2009: Skoda Octavia new favourite

Full Year 2010 Top 10 Ranking Table below.

Read more…

Central & Eastern Europe 2009: Skoda Octavia new favourite

January 11th, 2010 No comments

Skoda Octavia

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

In a market down 28% to 924,338 registrations, the Skoda Octavia becomes the best-selling model in Central and Eastern Europe with 58,526 sales, down ‘only’ 18% for a 6.3% market share. The Skoda Fabia is also up one spot to #2 in spite of sales down 35% to 45,320 units and 4.9%. With the Romanian car market annihilated by the crisis (-52%) the Dacia Logan falls to third overall with 36,819 sales and 4% share.

The Kia Cee’d is up 2 spots to #5 with 26,950 units, followed by the VW Golf (-5%), Ford Focus (-35%) and Renault Megane (+1%). Note Central & Eastern Europe figures include Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Serbia, Slovakia and Slovenia.

Previous year: Central & Eastern Europe 2008: Dacia Logan resists Skoda assault

Next year: Central & Eastern Europe 2010: Skoda Octavia strengthens lead

Full Year 2009 Top 10 Ranking Table below.

Read more…

Central & Eastern Europe 2008: Dacia Logan resists Skoda assault

January 11th, 2009 No comments

Dacia Logan

* See the Top 8 best-selling models by clicking on the title! *

Even though sales in Romania are starting to decrease, the Dacia Logan manages to stay on top of the Central & Eastern European models ranking for the 4th consecutive year in 2008 with 75,858 sales and 5.9% but the two favourite Skodas are not far and for the first time the Octavia sells better: it ranks #2 with 71,105 units and 5.5% just above the Fabia at 70,062 sales and 5.4%.

Far below we find the Ford Focus (2.6%), Renault Clio (2.5%) and Kia Cee’d (2.3%). Note Central & Eastern Europe figures include Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Serbia, Slovakia and Slovenia.

Previous post: Central & Eastern Europe 2005-2007: Dacia Logan reigns

Next year: Central & Eastern Europe 2009: Skoda Octavia new favourite

Full Year 2008 Top 8 Ranking Table below.

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Central & Eastern Europe 2005-2007: Dacia Logan reigns

January 11th, 2008 No comments

Dacia Logan

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

With Romania now one of the main powerhouses of the region as far as new car sales are concerned, it was logical that the leader there held a prominent position in the Central & Eastern European rankings. Launched in late 2004, the Dacia Logan is a runaway success in its native country, grabbing upwards of 40% market share in Romania. Even though it is much shyer in the rest of the region, Romanian sales are enough to make it the best-seller overall all through the period with 71,549 sales over the first 9 months of 2005, 56,125 over the first half of 2006 and 52,750 over the first half of 2007.

The podium stays unchanged throughout, with the Skoda Fabia at #2 and the Skoda Octavia at #3. The Opel Astra is #4 in 2005 and 2007, passed by the Renault Clio in 2006, the Renault Megane is #5 in 2005, the Ford Focus #5 in 2007, the Peugeot 206 is #7 in 2005 and the Toyota Yaris #7 in 2007. Note Central & Eastern Europe figures include Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

Previous year: Central Europe 2004: Skoda Fabia, Octavia and Peugeot 206 on podium

Next year: Central & Eastern Europe 2008: Dacia Logan resists Skoda assault

Full 9 months 2005, 6 months 2006 and 2007 Top 10 Ranking Tables below.

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Central Europe 2004: Skoda Fabia, Octavia and 206 on podium

January 11th, 2005 No comments

Skoda Fabia

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

I only have data for the first 9 months of the year and over that period 732,004 vehicles were sold in the region. Like in 2002 and 2003 the Skoda Fabia is the best-selling model by far with 76,882 sales, more than double the amount of the #2 the Skoda Octavia at 32,278 units.

The Peugeot 206 rounds up the podium with 22,512 sales, followed by the Renault Megane, Opel Astra, Ford Focus and Suzuki Ignis. Note Central Europe includes sales for Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

Previous post: Central Europe 2002-2003: Skoda Fabia above 100,000 sales

Next post: Central & Eastern Europe 2005-2007: Dacia Logan reigns

Full 9 months 2004 Top 10 Ranking Table below.

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Central Europe 2002-2003: Skoda Fabia above 100,000 sales

January 11th, 2004 No comments

Skoda Fabia

* See the Top 50 best-selling models by clicking on the title! *

Exceptional results over the period for the Skoda Fabia: it sells 120,645 units in 2002 and 128,001 in 2003 in the region, by far the best-selling model in Central and Eastern Europe. The Suzuki Swift, #2 in 2002 with 54,448 sales, drops to #9 the following year and is replaced by the Skoda Octavia in 2003 at 45,818, up one spot and 1% year-on-year. The Peugeot 206 rounds up the podium in 2003 with 41,648 units, up a healthy 18%.

The Opel Astra also shoots up 28% and 2 ranks to reach #4 in 2003, followed by the Opel Corsa (+47%) and Renault Megane (+37%). The Renault Thalia ranks #7 and the Daewoo Matiz #8. New entrants include the Suzuki Ignis at #15, the Dacia Solenza at #18, Daewoo Kalos at #23 and Fiat Panda at #24.

Next year: Central Europe 2004: Skoda Fabia, Octavia and Peugeot 206 on podium

Full Year 2002 Top 40, 2003 Top 50 Ranking Tables and sales of every model below.

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