Strategy: How the Chinese are setting themselves up for success (Part 4: Asia)

April 19th, 2014 7 comments

Chevrolet Enjoy India May 2013. Picture courtesy of motoroids.comThe Wuling Hongguang launched this month in India as the Chevrolet Enjoy.

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

In the first 3 parts of this series we observed that Chinese carmakers have managed their expansion into Africa, Latin America and Eastern Europe by securing less developed markets and using them as anchor points for a more widespread presence in these regions. In this context it’s interesting to note that in their own ‘backyard’, Asia, the same strategy has not been met with the same success, with only a handful of small markets in the region ‘cracked’ so far. However as you can expect, Chinese manufacturers are now busy working on correcting that situation, so they can finally surf on what is currently one of the most dynamic car markets in the world.

Chery QQ Myanmar 2012. Picture by Ryusuke IkedaChery QQ in Yangon, Myanmar

In Myanmar, as the market becomes normalised, all 1,000 Chery QQ imported by the Ministry of Industry sold out within a week in December 2012 in spite of seeing their original price more than double once various duties, taxes and licensing fees were added. The QQ is now a common sight in the main city in the country, Yangoon, mainly as taxis.

Chery M1 in Luang Prabang, Laos, January 2011.

Laos is the only other South-East Asian market where Chinese carmakers seem to be enjoying very healthy sales, with the Chery M1, QQ & Tiggo, JAC Tongyue and BYD F0 all noticed in the streets of Luang Prabang my dear Mum and Dad during their last trip there in January 2011.

Pyeonghwa Samchunri North KoreaThe Pyeonghwa Samchunri should be the best-selling vehicle in North Korea.

Neighbour North Korea is potentially the market in the world where the Chinese dominate the most, thanks to government links between the two countries. I estimate this based on the observation of rare videos of the streets of the capital Pyongyang. Local manufacturer Pyeonghwa assembles under license the Samchunri (aka Jinbei Haise) which should be the best-seller in the country, Brilliance BS4, FSV and Huanghai Shuguan, romantically renamed Ppoggugi 4WD. More recently, a batch of 200 Hawtai Lusheng E70 taxis were imported from China.

Micro Panda Sri Lanka February 2013Micro Panda in Sri Lanka

A little more to the West in Sri Lanka, Geely has associated with local brand Micro Cars to assemble and sell the Panda and MK (renamed MX7) to relative success. Micro Cars also assembles and sells Great Wall and Jinbei vehicles and ranked #2 in the country in February 2013. In India, Chevrolet launched the Enjoy in 2013 which is in fact a rebadged Wuling Hongguang and Chery assembles and sells the QQ in Pakistan, however no sales figures are available so far.

Change Freedom Dushanbe TajikistanChangHe Freedom in Dushanbe, Tajikistan

Another part of the world completely bypassed by most car manufacturers except the Chinese is all the Central Asian former Soviet nations. Even though official data is still rare for these countries, anecdotal evidence shows they are present there en masse. For example, did you know that judging by YouTube videos the Changhe Freedom must have been the best-selling car in Tajikistan for a couple of years before such minivans were abruptly banned over safety concerns in 2010? Lifan has been assembling cars in Azerbaijan since 2010 and the MG3 can already be noticed in the streets of the capital Baku. Finally Geely will export part of its Belarus production to Kazakhstan from 2014 onwards…

Geely MK2 Indonesia April 2012Geely MK2 taxi in Bali, Indonesia April 2012

All other significant markets in the region have resisted the Chinese assault so far. Chery apparently assembles cars in Indonesia, Malaysia, Taiwan, Thailand and Vietnam but their only claim to fame to-date has been the 27th place of the Chery Eastar in Malaysia in 2010. Geely assembles in Indonesia but the only models I saw in two weeks in Bali were a few MK2 taxis and one single Panda.

chana-era-cv6-changan-compactMalaysian advertisement for the Chana Era CV6

Hafei launched the Brio as the Naza Sutera in Malaysia in 2006, then renamed it Forza in 2007 without luck, while Chana’s attempt at launching the Era CV6 and CM8 there in 2009 also failed. Lifan assembles in Vietnam since 2007 and I did see one 520 sedan in Sapa when I travelled there but it seems DongFeng is having much more luck in the heavy commercial vehicle sector there. The situation is similar in Iran where Chery and Lifan have been assembling cars since 2006, and even though the Fulwin 2 hit a record #4 in April 2013, the volumes remain very small.

Manila Auto Show Foton2Foton Thunder at the Manila Motor Show, April 2013

However the Chinese carmakers’ situation in Asia may change rather quickly, judging at how dynamic the entire Chinese delegation was at the Manila Auto Show in the Philippines one year ago, as I detailed in my article Manila Auto Show 2013: Has the time come for Chinese manufacturers? According to Leon Herrera, CEO of Chery Motors Philippines, Chery is “aiming at a spot in the Top 5 at the end of 2013 year and between 10 and 15% of the market” by 2015 which is exceptionally ambitious given this is Chery’s second attempt at cracking the Filipino market after the first one failed.

Paradoxically, their proximity with Asia seems to have worked against Chinese car manufacturers so far, giving a surprisingly less positive balance sheet in a region where defiance towards Chinese domination may have hindered their progress. Potentially not for too much longer. Where there’s a will, there’s a way?

Stay tuned for the final Part of this series about Mature markets!

Categories: China, STRATEGY, World

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.

The analysis continues below!

Read more…

Photo Report: The Australian Outback in a Skoda Octavia (2/2)

April 19th, 2014 3 comments

Skoda Octavia Bourke April 2014Skoda Octavia in Bourke, NSW Australia

This Part 2 of my Photo Report on the Australian Outback, you can check Part 1 here.

Now that we’ve described how utes are extremely well represented in Outback Australia, let’s weigh the pros and cons of the AU$34,690 1.8l TSI Skoda Octavia Elegance I drove. Firstly I need to shed my European angle over the Skoda brand as it hasn’t had the same history in Australia. A good way was to listen to what my Australian friend and Lexus RX driver David had to say. He expected a small compact car to turn up and was surprised at how big the Octavia was. Definitely not a embarrassing car to be seen in, he compared it to arriving at the Sheraton with a new Mini  as he pointed out his interior designer had a Skoda. In Australia the Skoda name has an interesting quirk, as with most things European indeed.

Skoda Octavia MattGood old me with the Octavia and a Road Train

It’s true that a car represents who you are, and it appears that here one would rather be represented by Skoda than Kia, Hyundai or even Toyota. It just seems cooler. Given Skoda’s role in the Volkswagen Group in Australia is to compete with Japanese and Korean brands, they are on the right track here. Value for money is what Skoda has been renown for in Europe and it rings true in Australia too. It is very spacious for the price, the boot is cavernous and the cockpit feels more comfortable than my dad’s 5 year-old Audi A3. It’s tight on the road with the turbo charged engine delivering a sporty drive. The controls are intuitive, the sat nav zoom is satisfyingly granular and the altimeter very precise.

Skoda Octavia Mulga CreekFord Falcon SW and Skoda Octavia in Mulga Creek

A few pleasing details for a car of this price range: the cruise control automatically slows you down to keep at safe braking distance from the car in front without cancelling itself and resumes to the set speed again when the road ahead is clear, the bluetooth connectivity once set up actually works and recognises your phone without fail every time, to the point that it makes you feel the phone will stay connected in the car long after we’ve given it back! All in all, there are a lot of all thought out things in the Skoda Octavia.

Skoda Octavia kangaroo sign2Beware of kangaroos on the road!

If the fuel economy is neither here or there (by European standards) at 7.5l/km on our 1600km road trip, there are a few elements that remind you this is a car manufactured on a budget. The audio system lacks richness of sound no matter how you adjust it and even though it has got a subwoofer it lacks mid-range. The glovebox is flimsy, as are the electric window buttons and the boot cover, plus there is no sunglasses holder. Finally one of the frustrations of driving in the Australian Outback is swarms of insects throwing themselves onto the windscreen, and for this the Octavia’s lightweight wipers didn’t rise to the challenge. Now that you know what I think of the Octavia, let’s get back to the Australian Outback car landscape.

Toyota Prado Bourke April 2014Toyota Prado in Bourke

As far as SUVs are concerned, I was surprised to spot more than a few latest Toyota Prado and Ford Kuga in Bourke, while the Hyundai ix35 was a repeat occurrence on the 200km straight stretch of road between Dubbo and Bourke where only a dozen vehicles passed us by – half of them massive long distance trucks, called Road Trains here. I only spotted a couple of Mazda CX-5 over the two days spent in the Outback and whereas I have started seeing 3 or 4 new generation Mazda3 per day in Sydney, there were none in the area, seemingly indicating Mazda buyers tend to be city slickers.

Holden Commodore ute BourkeHolden Commodore ute in Bourke

Scott Holden CommodoreHolden Commodore ute driver Scott Kelly

An Australian specialty that is now an endangered species is the sedan-derived ute, and I saw a few new generation entry model Holden Commodore utes, something you’d be hard-pressed to spot in Australian cities. In Bourke I had the opportunity to interview Commodore ute driver Scott Kelly. Tellingly, his Commodore is a company car that gets changed over every 18 months after 90,000 km, so he tended to distance himself a little from it (A large part of Commodores sold in Australia nowadays are bought as fleet). Scott didn’t seem too fussed whether the car he drove was a Toyota, a Holden or a Ford, but while “Other cars can be flimsy, the Commodore gets you good protection from roos” in the form of a powerful V6 engine block and strong brakes – no roo bars on Scott’s car.

Del Great Wall SUVDel Borthistle and her roo barred Great Wall SUV

Another striking element when studying the car landscape in Bourke is the very high prevalence of Great Wall vehicles. Our hotel manager Del Borthisle is one happy owner: “About a year ago the fifth gear of my Toyota Hilux went for the second time on my way back from Goondiwindi (QLD) – 570km away – plus I had already had the engine done on it, so I thought it was time to get myself a reliable car. I do the trip a few times a month, and sometimes I can only decide to leave at the last minute so I really can’t afford to worry about whether my car is capable or not. My daughter already drives a Great Wall SUV and she suggested I do too. I went to the Dubbo (NSW) dealer – 370 km away –  traded my Hilux in, and within a week I was driving the Great Wall back to Bourke – they even fixed the roo bars in the meantime. I only paid $25,000 and have had absolutely no issues with it.”

Ford Fiesta sedan Narromine copyFord Fiesta sedan in Narromine

When asked what was her angle on the ‘made in China’ tag, she waves it off: “you know some of my clothes I buy from Australian brands fall apart after no time whereas clothes made in China last longer, so I don’t mind at all.” Del’s Hilux was 12 years and 250,000km old, and she admits “my brother drove all brands of utes and he always goes back to his Hilux, so I must have got the bad one of the batch but I just had enough.” If Great Wall has managed to convince buyers like Del in Outback Australia where reliability is crucial as the next town can be up to 500km away with no petrol station in between, it seems fair to say the Chinese carmaker has a bright future ahead of it, even though it is struggling a bit so far in 2014.

This concludes the first Australian Outback Photo Report of its kind, I hope you enjoyed!

Suzuki Pickup BourkeSuzuki Pick-up in Bourke

Categories: Australia

Strategy: How the Chinese are setting themselves up for success (Part 2: Latin America)

April 18th, 2014 5 comments

Chery QQ Brazil May 2011Brazilian Chery QQ

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

If Chinese carmakers have started exporting to Africa in the early 00′s, they set foot in Latin America even earlier, with JAC starting to export trucks to Bolivia back in 1990. Similarly to the strategy they adopted in Africa, Chinese manufacturers have initially focused on the less developed car markets in the region. They are now in the process of stepping up their involvement by launching in the bigger, more mature markets like Argentina and Brazil.

FAW S80 Uruguay 2013FAW S80. FAW is the 10th most popular brand in Uruguay vs. #16 at home in China.

In fact, the foundations the Chinese have built in secondary Latin American car markets are potentially their strongest in the world so far. The first logical anchor points in the region are Uruguay and Paraguay, both located between Argentina and Brazil and all part of the Mercosur, which makes it easier to export towards those two powerhouses as local assembly with 30% to 50% share of local components currently receive zero-tariff status inside the Mercosur. As a result both Chery and Lifan (40,000 units/year capacity) have assembly factories in Uruguay while Dongfeng has one in Paraguay.

In Uruguay, 26 of the 54 brands on sale are Chinese, capturing 23.3% of the market in 2013, up from 19.5% in 2012 – their highest country penetration outside of China and actually on par with the penetration of Chinese passenger cars within China! There are 8 Chinese carmakers in the Uruguayan Top 20 and 2 among the Top 10: Chery is 5th with 5.9% share and is even up to #2 in February 2013 with almost 10% of the market below just Chevrolet and above Volkswagen! FAW is 10th at 3.3%, followed by Geely at #13 and 2.7% (25 units short off beating Toyota!), BYD at #15 and Great Wall at #16.

DongFeng Mini Pick-up Paraguay 2012The DongFeng Mini Pick-up is now produced in Paraguay.

In Paraguay, the Chinese hold 9% of the passenger car market but 59% of the truck market! There were 10 Chinese among the Top 30 best-selling brands in 2013, led by ChangAn up 119% to #11, Haima up 37% to #16, Great Wall up 9% to #17 and Foton up 43% to #19.

Geely CK Cuba October 2011Geely CK Police car in Cuba

Peru is another very important hub for Chinese manufacturers in Latin America: it is one of the fastest growing car markets in the world, with the last 4 years all being new records topped up by 210,326 registrations in 2013, and is “facing” China on the Pacific Ocean, making it an enticing port-of-entry into the continent. Roughly 15% of the Peruvian car market go to Chinese models, and latest data shows JAC up 80% year-on-year in 2013 to #10 brand, Great Wall down 8% to #15, Chery up 8% to #17, Foton up 1% to 320 and Lifan up 73% to #20.

Local analysts even estimate that as much as 96 Chinese car brands (who knew there even were that many?!) are sold in Peru both formally in dealerships and informally by rogue vendors…

DongFeng S30 Venezuela February 2013The DongFeng S30 was the best-selling model in Venezuela in December 2012…

Venezuela is a slightly different situation because the exchanges with the rest of the region are more patchy, so Chinese carmakers’ success so far has stemmed either from local production – Chery has started assembling cars there in 2011 but no figures are available – or direct agreements with the Chinese government, like the unprecedented 4,000-unit batch of DongFeng S30 imported in late 2012 which enabled the model to simply take the lead of the sales charts in December of that year. The S30 went on to lodge 5 consecutive months within the Top 5 best-sellers in Venezuela across 2012 and 2013.

Chevrolet N300 Colombia December 2011Chevrolet N300

If we go up one notch to Chile - yet another record-breaking market at 378,000 sales in 2013, Chinese brands have a 11% market share (up from 7% in 2012!), with no less than 19 of them in the Top 50. They are led by Great Wall at #13, Chery at #20, JAC at #21, BYD at #26, Geely at #27, ChangAn at #28 and Dongfeng at #29. In Colombia, Chery is the first Chinese brand to have ever broken into the annual Top 10 at #10 in 2013 with 4,421 sales and 1.5% share. JAC (#13), Dongfeng (#17), Hafei (#21), Great Wall (#23), Geely (#29) and Zotye (#30) also rank inside the Top 30. Ecuador (with Chery ranking 11th and Geely 12th in 2013) and Bolivia are two other developing Latin American markets likely to have seen a recent flood of Chinese cars.

The Caribbean region is yet another under-developed zone most carmakers traditionally sidestep, except the Chinese. Geely regularly ships cars to Cuba, the last batch from October 2011 was composed of 1,300 Geely CK (now a common sight in La Habana as a police car) and 250 Emgrand EC7. In the Dominican Republic, a few Chinese models have already managed to break into the Full Year Top 20 like the BYD F3 (#9 in 2010), the DongFeng Cargo Van (#14 in 2011) and the Jinbei Haise (#18 in 2011).

JAC J3 Brazil December 2011Brazilian JAC J3

This all means that Chinese carmakers have now established a solid footing in almost all Latin American markets, working extremely hard to secure the foundations for long-term success in the region. They are now using these stepping stones to access Argentina (all-time high 955,000 units in 2013) and Brazil (record 3.6 million units in 2012), where the volumes really are. In Argentina, Chery has started assembling a limited amount of cars locally and as a result has seen a few models make their way up the ladder: both the Chery QQ (#47) and Tiggo (#53) reached their highest ranking so far in the country in March 2013.

In Brazil, JAC broke with the Chinese tradition and chose to enter the market all guns blazing on 18 March 2011, which they called J-Day. They simultaneously inaugurated 50 dealerships across the country and hired a famous TV presenter, Fausto Silva, as their ambassador in a multi-million dollar TV campaign.

JAC J2 Brazil February 2013. Picture courtesy of autossegredos.com.brThe JAC J2 is now the best-selling Chinese model in Brazil (#64 in April 2013)

However JAC’s strong start in the country has since fizzled out. The JAC J3 hatchback (#36) and J3 Turin sedan (#56) both hit their highest ranking only 3 months after launch in June 2011 while in the meantime the Chery QQ peaked at #36 in September 2011, but 2012 was harsh: J3 at -37%, J3 Turin at -40% and QQ at -25%, on the back of increased levies on imports. 2013 wasn’t better with JAC down 11% and Chery down 45% as a whole. In 2013 the JAC J2 became the best-selling Chinese model in Brazil but it only ranks 87th. Now both manufacturers realise their success in Brazil lies in local assembly: Chery is reportedly building a 150,000 annual unit-production facility in the São Paulo state while JAC is set to open a 100,000 annual vehicle-plant in the state of Bahia in 2014.

A very strong base in Latin America’s developing markets should ensure Chinese manufacturers surf on these markets’ predicted explosive growth in the next coming decades. The next challenge is to manage to crack more mature markets like Brazil and Argentina and this will require a much more significant level of investments in the form of large scale manufacturing operations. But the rewards could be priceless: thanks to its brand-new factory producing models tailored to Brazilian tastes, Hyundai has tripled its market share in the space of a few months… No doubt the Chinese are watching with tremendous interest.

Stay tuned for Part 3 of this series: Eastern Europe!

Categories: China, STRATEGY, World

Strategy: How Chinese carmakers are setting themselves up for success (Part 1: Africa)

April 18th, 2014 7 comments

Fennec fox. Picture courtesy of Fransisco Mingorance:National Geographic Traveler Photo ContestLike this fennec fox, Chinese carmakers have been walking against the wind in Africa. And it’s worked.

With the Beijing Auto show approaching fast, I though it would be timely to publish an updated version of my 5 Part strategy study of how successful Chinese manufacturers are abroad. Part 1 is Africa.

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

For the first time in the history of car manufacturing, Chinese carmakers sold 1 million cars outside of China in 2012, and estimates show chances are they have repeated that feat in 2013. Chinese manufacturers are now relying more and more on export markets to boost their bottom-line, especially as conditions have worsened for local passenger cars at home over the last couple of years. However as I described in my article “China: How local brands may finally find their mojo at home“, the Chinese are learning how to sell low-cost overseas and applying these strategies at home, making themselves more competitive in the process.

In fact, while the long-dreaded Chinese ‘invasion’ of the West European and American car markets is still a long way off, Chinese manufacturers have been working extra-hard under the radar to secure less developed markets that will form the bulk of the global car sales growth over the next couple of decades.

And this is why they will win.

Speranza A516 EgyptSperanza A516 in Cairo, Egypt

First case in point, Africa.

Apart from Toyota, Hyundai and a bunch of other Japanese manufacturers, no one currently has a lot of time for a continent that is still finding its way into development. Except the Chinese, who started assembling cars there almost a decade ago, as part of a push to be deeply involved in the infrastructure building of the continent. So we’re not just talking cars, but roads, rail tracks, mining and much more.

Egypt was the first cab off the rank when Chery used the Cairo plant previously run by Daewoo to assemble its cars under the Egypt-exclusive Speranza brand in 2004 – apparently because the Chery brand suffered poor quality perceptions after an earlier launch there. Success: Speranza was the 4th most popular passenger car brand in Egypt between 2008 and 2011, selling more than Toyota! Successful models include the A516 (#9 from 2007 to 2009) and the Tiggo (#14 in 2011). Since 2012 however, other Chinese manufacturers have stepped up a notch in Egypt…

Golden Dragon Haice Egypt 2012The Golden Dragon Haice was the best-selling Chinese model in Egypt in 2012.

The Golden Dragon Haice managed to rank as high as #6 in September 2012 and finished the year as the best-selling Chinese model at #15, and the Geely Emgrand EC7 has done much, much better, finishing the year 2013 in third position overall with almost 5% of the market on its own! King Long, Brilliance and JAC models have also started to appear within the monthly Top 30.

Holland Car Abay V2Holland Car assembles the Abay (aka Lifan 520) in Ethiopia.

In Ethiopia, Lifan and JAC have cooperated with Holland Car, the country’s first car brand, to assemble models locally including the Holland Car Abay (a rebadged Lifan 520), Tekeze (JAC Tongyue) and Awash (JAC B-Class), all named after Ethiopian rivers. Since 2010 Lifan assembles cars under its own name in the country and has recently introduced the X60 SUV. No sales data for that country so it’s hard to gauge their success (not as high as Lifan would want according to somalilandpress.com) but a second example of clever re-branding to fit the local culture as a first step.

Foton Slip SUP Kenya 2012The Foton SUP is assembled in Kenya since 2011.

In Kenya, Foton launched its first domestically produced truck, the SUP pick-up, in June 2011 using an existing local factory, and has opened its own US$50m assembly plant in Nairobi in March 2012 with a capacity of 10,000 annual units. Chery is also thinking about a Kenyan plant, initially limited to produce 1,000 units in 2013. As a result, Chinese manufacturers now hold 20% of the Kenyan car market…

Geely Emgrand EC8 Kuwait. Picture courtesy of qabaq.comGeely Emgrand EC8 in Kuwait

Either from these 3 assembling hubs or through straight exports from China, Chinese carmakers are organising their expansion towards other African countries. The Egyptian hub makes it more practical to export to Libya, Algeria, Sudan, Syria, Jordan, Saudi Arabia, Kuwait, the UAE and Iraq notably, where the Great Wall Deer seems to be particularly successful. Another potential hub for the region could be Iran where Chery has been assembling cars since 2006, with the Fulwin 2 hitting a record #4 last month.

JAC Tojoy MadagascarJAC was the #2 most popular brand in Madagascar at the end of 2012.

Ethiopia and Kenya can also be used as relays to Tanzania, Mozambique or Madagascar where some Chinese carmakers already have a solid presence: JAC was up to #2 brand with over 8% share over the third quarter of 2012 below only Nissan, and Great Wall was 7th in Q1 2013. Further West, Chinese carmakers now hold 20% of the Senegal and Cote d’Ivoire markets, with latest Cote d’Ivoire data showing Great Wall at #10 in 2010. The logical next step in Western Africa for Chinese car makers would be assembling cars in Nigeria…

Assembling cars in Nigeria would enable them to carve up a significant market share there as well as in neighbouring Ghana, Cameroon, Gabon, Mali and Burkina Faso, all at various stages of development but destined to grow fast in the next decade and beyond. South Africa also seems to be a missing link right now, however when you realise that it is currently the only mature market on the continent, it’s easier to understand why the Chinese haven’t spent too much energy trying to crack it yet. I will spend more time talking about Chinese carmakers’ strategies in mature markets in Part 5 of this series.

ZX Auto GrandTiger Libya 2011aZhongXing/ZX Auto GrandTiger in Libyan Civil War outfit

Another way Chinese models have come under the spotlight in export markets has been through government agreements, notably in Libya, albeit in a totally unexpected way (you also will see its impact on the Cuban car market in the next installment of this series). During the 2011 Arab Spring, Libyan rebels got their hands on a batch of 5,000 ZX Auto GrandTiger pick-ups that the government had recently received and fit their heavy artillery on them, catapulting the vehicle onto worldwide TV screens for a solid 6 months. A marketing opportunity that ZX Auto fully embraced, boasting about its reliability and featuring the Libyan civil war on giant LED screens at the 2012 Beijing Auto Show (see the full Libya article here).

Stay tuned for Part 2 of this series: Latin America!

Photo Report: The Australian Outback in a Skoda Octavia (1/2)

April 18th, 2014 7 comments

Skoda Octavia Road Train Nyngan April 2014Road Train vs. Skoda Octavia… Who wins?

I have been mentioning the new generation Skoda Octavia on BestSellingCarsBlog a lot in the past 6 months as it progressively climbed the European rankings to reach an all-time high 5th place in October and November 2013, ranking inside the Top 10 for 5 consecutive months between October 2013 and February 2014, whereas this had happened only twice before in the nameplate’s 16 year career. So far, 3.7 million Octavias have found a buyer since 1996.

Toyota Hilux Bourke April 2014The Toyota Hilux is likely to be the best-selling model in the Australian Outback

Is this dramatic step-change in sales justified? What does it feel like to drive the car? I was lucky enough to be lent an Octavia by Skoda for a few days and thought it would be a good opportunity to evaluate how it withstands the harsh Australian terrain and how it is perceived in this country. I took it for a 1,600 km road trip from Sydney to the small town of Bourke in the Australian Outback, this way also reporting to you on the car landscape in a very unique region in Australia with the help of my photographer mate David.

Skoda Octavia Sydney Opera House April 2014Starting point: Sydney with its iconic Opera House and Harbour Bridge

Skoda has a relatively short current history in Australia: it relaunched here in 2007 after being present from the 50s to the 70s. Skoda sales were up 3% in 2013 to 3,555 units at #25 – below Fiat and Peugeot and above Chrysler and Mini – and are down 11% so far in 2014 to 726 sales. Back in October 2012 at the Sydney Motor Show I had a long chat with Skoda Director at the time Matthew Wiesner who told me “Skoda’s role in the Volkswagen Group in Australia is to create a very strong presence amongst the Japanese and Korean brands. We aim to be somewhere between 1 and 2% of the market by 2019.” In 2013 Skoda’s best-seller in Australia was, wait for it, the Octavia at #132 overall and 37% of Skoda sales here.

VW Amarok Bathurst April 2014VW Amarok hiding behind its roo bar.

So it’s with Skoda’s best-seller worldwide and in Australia that we will explore the car landscape in Outback Australia, and it changes drastically as soon as you leave the outskirts of Sydney to cross the Blue Mountains and land in sheep shearing and cotton country in Bathurst, Dubbo and finally Bourke. Sturdier vehicles are required and the constant danger of having your car wrecked by kangaroos crossing the road at night means most 4WD are equipped with huge roo bars – the Australian equivalent to bull bars – I even spotted a Toyota Camry with one!

Holden Commodore BourkeNew generation Holden Commodore in Bourke.

Toyota Camry Australia April 2014Toyota Aurion between Dubbo and Bourke

The agricultural activity in the region pushes the market share of utes (Australian slang for pick-up trucks) way up. The Toyota Corolla and Mazda3, national and New South Wales leaders, are very scarce. Instead, the preferred passenger car options remain large cars like the all-new Holden Commodore, Toyota Camry and Kia Optima (a surprise to me as it only ranked #116 nationally in 2013), indicating that this region of Australia has kept the purchase pattern that characterised Australian sales 6 to 8 years ago.

Toyota Land Cruiser ute NarromineToyota Land Cruiser ute in Narromine.

In fact, the car landscape is closer to what Queensland or Northern Territory 2013 sales charts would indicate, which makes sense as the area I drove to is culturally closer to these two States. The Toyota Hilux should be the best-seller in the area by far, but the Mitsubishi Triton strikingly outperforms its national level here as well, as does the Toyota Land Cruiser 70 ute which has become iconic in the region as well as in mining Western Australia. I will venture an estimated Top 5 best-sellers in Outback New South Wales: 1. Toyota Hilux 2. Holden Commodore 3. Toyota Land Cruiser pick-up 4. Mitsubishi Triton 5. Toyota RAV4.

Mitsubishi Triton Nyngan April 2014Mitsubishi Triton in Nyngan

All utes are over-represented, especially the VW Amarok which has now infiltrated even the most remote stations both in its highest double cab 4WD spec and its lower plastic bumper 2WD spec, and the Great Wall V-Series (aka Steed), equally frequent throughout the trip. I also spotted two Mahindra Scorpio and one Tata Xenon. When I told you Australian farmers loved their utes, any utes, that’s what I meant.

Nissan Navara Bourke April 2014Nissan Navara in Bourke

Next we review what’s good and what’s not with the Skoda Octavia, and interview two Outback Australians about their latest car purchase: a Holden Commodore ute and a Great Wall SUV… Stay tune for Part 2 of this Photo Report!

Mazda BT-50 Bourke April 2014Mazda BT-50 in Bourke

Skoda Octavia Ford Ranger BathurstSkoda Octavia with Ford Ranger and Courier in Bathurst

Categories: Australia

Europe March 2014: Fiat 500 inside Top 10 for the first time

April 18th, 2014 25 comments

Fiat 500 Europe March 2014. Picture courtesy of whatcar.co.ukFiat 500

* See the Top 10 best-selling models and Top 30 brands by clicking on the title! *

The good news keep pouring in (at last!) for the European new car market: up 10% year-on-year in March to deliver a 7th consecutive month of year-on-year growth at 1,489,796 units. The First Quarter is up 8% on 2013 to 3,353,180 sales. Traditionally March sales are biased by strong seasonal UK sales at 31% of overall European sales vs. 18% over FY2013. As a result, the Ford Fiesta is a comfortable #2 at 44,491 sales, passing the VW Polo and Renault Clio year-to-date to also rank #2, the Vauxhall/Opel Corsa is up to #3 at 33,563 units, the Ford Focus up to #5 and 30,743 sales and the Vauxhall/Opel Astra up to #9 and 24,016 units – 8% higher than its March 2013 score.

VW Golf Europe March 2014. Picture courtesy of largus.frVW Golf sales are up 14% year-on-year in March.

Not satisfied with being once again and by far the best-selling model on the continent, the VW Golf also delivers the 2nd best year-on-year improvement in the Top 10 at +14% to 56,042 sales and +15% year-to-date at 129,559 units. The biggest gainer is the Fiat 500, boosted by strong results in the UK (monthly volume record), Germany, France and Italy and up 19% year-on-year to #10 with an all-time high 21,990 sales. This is the first time the Fiat Nuova 500 breaks into the European Top 10, an astounding 7 years after being first introduced to the public! Such a late blooming is extremely rare in nowadays car industry and is a testament to the consistently positive word-of-mouth the model has benefitted from throughout its career so far.

Nissan Qashqai Europe March 2014. Picture courtesy of largus.frThe new Qashqai and Note push Nissan up to #10 this month.

Brand-wise, unsurprisingly Volkswagen keeps the lead with 164,724 sales and 11.1% while Ford at #2 (+13%) and Vauxhall/Opel at #3 (+15%) outperform the market and reclaim the same ranks year-to-date. Renault is up a beautiful 23% to 95,987 sales but drops to #4 year-to-date like in 2013 while Peugeot is up 13% in 5th place. Notice also Nissan up 15% to #10 vs. #13 year-to-date, Skoda is up 20% to #12, Dacia up a huge 51% to #16 (+41% year-to-date), Mazda up 26% to #19 and Suzuki up 21% to #21.

Previous post: Europe 2 months 2013: Audi A3 and Renault Captur blitz up

Check also: Europe February 2014: Discover the Top 343 All-models!

Previous month (models): Europe February 2014: Skoda Octavia up 39%, Fiat Panda in Top 10

Previous month (brands): Europe February 2014: Renault and Peugeot on podium

One year ago: Europe March 2013: Nissan Qashqai and BMW 3 Series strike again

Full March 2014 Top 10 models and Top 30 brands Ranking Tables below.

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Categories: Europe

Cyprus March 2014: Range Rover remains in Top 10

April 18th, 2014 No comments

Range Rover Cyprus March 2014The Range Rover is at a very impressive #9 in Cyprus so far in 2014…

* See the Top 30 best-selling models by clicking on the title! *

Thanks to data provided by SEMO Cyprus and Analysis by INNOSOFT, I can share with you today a detailed models ranking for Cyprus over the First Quarter 2014. March registrations in the country are up a huge 79% year-on-year to 725 units, single-handedly bringing the year-to-date total into positive after 3 months at 2,099 sales, up 12% on 2013. The Toyota Yaris remains the best-seller in the country with 120 sales and 5.7% share ahead of the Ford Fiesta at 85 units and 4% while the Kia Rio jumps onto the podium with 81 sales and 3.9%. The Honda CR-V is down to a still outstanding 4th place (vs. #14 in FY13) ex-aequo with the Nissan Micra (vs. #13), the Toyota Corolla is up to #8 whereas the Range Rover brilliantly maintains itself inside the Top 10 at #9 with 67 sales and 3.2% share – only 5 units away from the 4th place! Notice also the Volvo XC60 landing at #12.

Previous month: Cyprus February 2014: Toyota Yaris new leader

Previous year: Cyprus Full Year 2013: Ford Fiesta keeps lead in market down 32%

Full First Quarter 2014 Top 30 models Ranking Table below.

Read more…

Categories: Cyprus

Algeria First Quarter 2014: Hyundai Accent #1, market down 30%

April 16th, 2014 7 comments

Hyundai Accent Algeria March 2014Hyundai Accent is the best-selling model in Algeria.

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

The Algerian new car market is definitely going through a tough time in 2014: down 30% year-on-year over the First Quarter to just 85,000 registrations, and this evolution has wreaked havoc in both brands and models sales charts in the country. Edged out by Peugeot last year, Renault is back in pole position in spite of sales down 18% to 13,884 units. It is now followed by Hyundai, up an impressive 11% to 11,574 sales and going from 8.8% share a year ago to 13.6% now. Peugeot is down a harsh 66% to #3, Toyota down 15% to #4, Dacia down 52% to #5, Kia up 46% to #7 and Nissan up 26% to #9.

Toyota Hilux Algeria March 2014The Toyota Hilux is up to #2 in Algeria so far in 2014.

Model-wise, it’s a complete reshuffle at the top: the Hyundai Accent jumps from 9th over the Full Year 2013 directly into pole position, and by far, with 8,201 sales and 9.6% share, even though a large part of its sales are achieved by the model from two generations ago, still on the catalogue. Up from #7 in 2013, the Toyota Hilux ranks 2nd at 4,577 units, the Dacia Logan is down from #1 last year to #3 with 4,179 units. The Renault Symbol is up one spot to #4, the Kia Picanto up 5 to #5, Toyota Yaris up 8 to #7 and the Peugeot 301 down 8 to #10.

Previous post: Algeria Full Year 2013: Now with the Top 200 All-models ranking!

Check also: Algeria Full Year 2013: Dacia Logan #1 for first time, Peugeot 301 at world-best #2

One year ago: Algeria February 2013: Renault Clio IV and Peugeot 301 impress

Full First Quarter 2014 Top 10 and March Top 5 brands and models Ranking Tables below.

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Categories: Algeria

Canada March 2014: Hyundai Santa Fe in Top 10 for first time

April 16th, 2014 1 comment

Hyundai Santa Fe Canada March 2014. Picture courtesy of motortrend.comHyundai Santa Fe

* NOW UPDATED with Top 248 All-models and Top 32 brands! *

New car sales in Canada are up a tiny 0.3% year-on-year in March to 157,228 registrations, bringing the year-to-date total to 358,857 units, up 0.9% on 2013. Ford keeps the lead of the brands ranking by far in spite of an 11% decline to 21,895 sales, followed by Toyota up 6% to 15,509 units. Chevrolet jumps onto the podium at #3 thanks to sales up 12% to 13,715. Other great performers include Nissan up 26%, Jeep up 41%, Lexus up 30% and Buick up 35%. Model-wise, the Top 4 best-seller are identical to the Full Year 2013 ranking this month: the Ford F-Series (-14%) leads ahead of the Ram Pick-up (+2%), Honda Civic (+0.2%) and Hyundai Elantra (-10%).

Jeep Grand Cherokee Canada March 2014. Picture courtesy of motortrend.comJeep Grand Cherokee. Jeep sales are up 41% in Canada this month.

Boosted by the new generation, the Toyota Corolla is up a fantastic 37% year-on-year to stop just 40 units short off the Elantra in 5th place. But the biggest gainer in the Top 10 is the Hyundai Santa Fe up 69% to land in 9th place, to my knowledge the nameplate’s first ever incursion inside the Canadian Top 10. Notice also the Nissan Rogue up 57% to #15, Chevrolet Equinox up 65% to #16, Nissan Versa up 108% to #25, the Jeep Cherokee down 11 spots on February to #29 and the Dodge Dart down a harsh 61% on March 2013.

Previous month: Canada February 2014: Dodge Grand Caravan on podium for first time in 18 months

One year ago: Canada March 2013: Dodge Ram at highest in over 3 years

Full March 2014 Top 248 All-models and Top 32 brands Ranking Tables below.

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Categories: Canada