Strategy: How can Chinese brands unlock their home market? (Part 3)

Great Wall Wingle

This is Part 3 of my special Strategy series about Chinese manufacturers at home. You can check out Part 1 (introduction and Medium & Heavy Trucks) here, Part 2 (Small, Medium & Large Buses and Light Trucks) 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 1 tonne Pick-ups, Mini Trucks and Minivans.

PICK UPS

One tonne pickups are actually part of the Light Truck segment we covered earlier totalling roughly 350,000 annual units, however I wanted to dedicate some more time on this segment because it was one of the biggest surprises of my recent trip to China. Worldwide, this sector is dominated by the Toyota Hilux, Isuzu D-Max, Mitsubishi L200, Nissan Navara, Mazda BT-50 and other VW Amarok, most of which are manufactured in Thailand. Up until now I had no access to sales data for pickups in China and I had only visited Beijing and Shanghai where civilian pickups are not even allowed in downtown areas! So this was an entire swath of the market totally unknown to me.

ZX Auto Grand Tiger

I ended up spotting thousands of pickups, as I describe in my article The pick-ups of Kashgar, South-Western China, and the big learning is: Chinese car buyers are actually not interested in foreign pick-ups. At all. In the week I spent in the Xinjiang Uyghur autonomous region, the only ones I spotted were the locally-produced Nissan D22, the Isuzu TF and the Ford F150 Raptor (what is Ford waiting for to officially import these into China?). Not a single Toyota Hilux, although I saw a lot of Hilux lookalikes! Official sales data for 2012 (and it shouldn’t have changed much in 2013) indicate the Great Wall Wingle is the best-selling pickup in China with 113,305 sales and a gargantuan 31.5% market share. Interestingly, 56% of Wingle sold in China in 2012 were diesel and 20% only were 4WD.

JMC Baodian

Contrary to my observations in Xinjiang Uyghur where the ZX Auto Grand Tiger could be threatening the Wingle for the pickup crown, nationally the JMC Baodian is #2 with 61,899 units and an outstanding 17.4% share, a fair way above the Grand Tiger at 37,837 and the Dongfeng Rich at 37,059. What does this all mean? Well in a region where sealed roads are often a distant memory, Chinese pickups are absolutely up for the task, to such an extent that vehicles hugely successful elsewhere don’t even register here. It’s not a surprise that the Great Wall Wingle has already made some inroads in export markets, notably in Australia.

Chana Star Pickup in Hotan, Xinjiang Uyghur – May 2014

MINI TRUCKS

The Mini Truck segment is a little vague as the only information I have is a list of brands, so I am assuming we are talking about the pick-up variants of the minivans we talk about later down in this article. In any case, the production figures are suspiciously low compared to the amount of ‘mini pickups’ I spotted in Xinjiang Uyghur, where they were often outselling their minivan variants. I may also have been in a region where mini pickups are especially successful. In any case, we are looking at 527,000 vehicle produced in 2013, 100% Chinese! Wuling dominates the category with 181,677 units (I estimate the Rongguang pick-up to lead the models charts), followed by Foton at 102,723, Dongfeng at 80,968 and Chana at 76,447.

Chana Taurus

MINIVANS

Minivans are notorious for their success in China and 2013 production figures confirm it: over 1.63 million of them came out of factories last year, 99.9% of them Chinese! Only the Suzuki Landy (1,899 units) makes a frail appearance in the models ranking, dominated by the Wuling Sunshine (463,800), Rongguang (359,400) and Dongfeng Xiaokang (166,100).

Beijing Auto Weiwang 306

For the first time on BSCB I can indeed share with you detailed Minivan production data, and this is particularly interesting for the detail of Chana Minivans, all grouped into one in the traditional monthly sales rankings. We learn that the Chana Star 2 is the most popular in 2013 with 127,135 units produced, ahead of the Star (80,393), Taurus (56,706) and Star 4500 (28,186). We also learn that Beijing Auto’s new brand, Weiwang, has been very well received: the Weiwang 306 already ranks 5th in 2013 with just under 90,000 units.

Dongfeng Xiaokang V27

Notice also the Lifan Foison at #8, the Beijing Auto Weiwang 205 at #10, Haima Fushida 2 at #14, GAC Gonow Xingwang at #16, Zotye Z10 at #17 and BAW Minivan at #20. So this is another segment that Chinese manufacturers have completely locked down, and are very unlikely to let anyone near: given how cheap all these Minivans are, there is actually no competition for them worldwide.

Haima Fushida 2

One issue: the Minivan segment seems to have plateaued somehow over the past 12 months, with the Wuling Sunshine down a harsh 36% year-on-year in April for example. Travelling through China I think I has managed to garner a few explanations to this Minivan pause, which I will detail in the next part of this series, so stay tuned!

Full Year 2012 Top 6 Pick-ups, Full Year 2013 Top 10 Mini Truck brands and Top 20 Minivan rankings below.