Strategy: How can Chinese brands unlock their home market? (Part 2)
This is part 2 of my special Strategy series about how Chinese carmakers can achieve a better market share in their home market. You can check out Part 1 (introduction and Medium & Heavy Trucks) here, Part 3 (Pick-ups, Mini Trucks and Minivans) here and Part 4 (Commercial Vehicles summary and MPVs) here. We are exploring the Chinese market segment by segment and studying how local brands fare in each segment, going from big to small. Today we go through Medium & Large Buses, Small Buses and Light Trucks.
MEDIUM & LARGE BUSES
175,266 Medium and Large Buses came out of Chinese production lines in 2013, keeping in mind an estimated 10% of these get exported. If Chinese brands held a whopping 97% of the Medium and Heavy Truck market, their domination in this sector is similar, holding 96.7% of last year’s production with Toyota (3.2%) and Hino (0.1%) the only foreign manufacturers in the ranking. Note this doesn’t mean these two are the only foreign buses to be sold in China but imports in this sector are anecdotal.
With a total of 175,000 Medium and Large Buses produced in China in 2013, only 3 manufacturers stood above 10,000 units. Yutong, which claims to be the #1 bus manufacturer in the world, aptly takes the lead with 29.4% share, followed by King Long at 19.8% and Dongfeng at 7.5%. Lots and lots of obscure brands in the ranking: have you ever heard of Ankai, Zhongtong, Yaxing, Sunwin, Lushan, Hengtong, Guilin, Nanjun, Sunlong or Zhongke? Didn’t think so.
Jinbei Haise in Beijing – Jinbei dominates the Small Bus segment in China.
I have separated this category for the Medium & Large Buses because they involve significantly different brands. Almost 400,000 small buses came out of Chinese factories in 2013 (389,963 to be precise) and if the Chinese brand ratio was 97% among Medium & Heavy Trucks and 96.7% among Medium & Large Buses, here we are simply looking at… 100% Chinese. Easy. Even though a lot of Small Buses are in actual fact derived from various generations of Toyota Hiace, there is no such thing as a foreign small bus produced in China, and imports are scarce.
Jinbei leads the ranking in this category with 104,265 units produced, and it makes sense given the extremely high number of Haise I saw in Beijing and Chongqing. Less so as you get in the countryside though. JMC follows with 68,062 units while Yuejin rounds up the podium at 42,977 units. Notice also Dongfeng at #4, Foton at #5, JAC at #6, ChangAn at #12, Beijing Automobile Works at #15 and Chery at #20.
Last category for today is the Light Truck segment, one of the most popular in the country with just under 1.9 million units produced locally in 2013. Once again an astounding 99.2% of these are Chinese, and with imports limited in this category, foreign carmakers are left with bread crumbs. Keep in mind we are also looking at a few hundred thousand exports within this figure as well, as Light Trucks are potentially with Medium & Heavy Trucks the segment where Chinese carmakers have been the most successful to-date overseas.
If we look at the production ranking by brand, Foton dominates with 379,335 units ahead of JAC at 220,068 and Jinbei at 180,840. Dongfeng, JMC, Great Wall, Yuejin, FAW, Qingling and ZX Auto round up the Top 10 which is roughly consistent with my observations on the ground earlier this month. Sales-wise, we know that the Foton Forland sub-brand accounts for a large part of Foton’s overall score in this segment with 346,391 units sold at home last year. It is followed by the JAC Light Truck at 221,116 sales, the Jinbei Light Truck at 178,252 and the Dongfeng Light Truck at 165,779 – all consistent with their production figures.
A sub-segment of Light Trucks is Pick-up Trucks and I will cover this sector in a separate update as for once I can share with you exclusive sales figures by model (albeit 2012 ones). The Pick-up segment was one of my biggest surprises during the visit I made to Chinese countryside earlier this month so it deserves its own write-up. Stay tuned for Pick-ups, Mini Trucks and Minivans next…
Full Year 2013 Top 20 Medium/Large, Small Buses and Light Truck brands rankings below.