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STRATEGY: How can Chinese brands unlock their home market? (Part 5)

GAC Trumpchi GS5 China May 2014. Picture courtesy of yiche.comGAC Trumpchi Transformers The GAC Trumpchi GS5 features in the Hollywood blockbuster ‘Transformers – Age of Extinction’

* See the Top 76 All-models and Top 43 All-brands rankings by clicking on the title! *

This is Part 5 of my special Strategy Series on Chinese manufacturers at home. You can check out previous parts of this series here: Part 1: Introduction and Medium & Heavy TrucksPart 2 :Small, Medium & Large Buses and Light TrucksPart 3: Pick-ups, Mini Trucks and MinivansPart 4: Commercial Vehicles summary and MPVs.

Today we explore the SUV segment, one of the fastest growing in China. Over the Full Year 2013, just under 3 million SUVs found a buyer in the country – 2,988,329 exactly –  and 1.2 million of them or 39.8% were Chinese models. So far in 2014 after 5 months, Chinese penetration of the SUV segment is stable year-on-year at 39.6%. In May, Chinese SUVs grew 32% to 122,143 registrations in an overall SUV market growing 38% at 318,190 units, resulting in a weaker 38.4% market share. April was at 40.2%. To put these market shares in perspective, Chinese penetration is around 37% at the moment across all segments.

Haval H9 2014 Beijing Auto ShowHaval H9 at the 2014 Beijing Auto Show

So this means Chinese manufacturers are doing slightly better in the SUV segment than they are overall, but also that they have managed to maintain their share in this fast-growing segment, doing a good job at countering the multitude of new foreign SUVs that keep being launched in the Chinese market. And this is no mean feat. A lot of Chinese manufacturers are starting to show great skills at making (almost) world-class SUVs.

Haval Dakar Rally 2014. Picture courtesy of bitautoHaval Racecar at the Dakar Rally 2014

Chinese carmakers wouldn’t be a near 40% market share in the SUV segment if if wasn’t for Haval, formerly one of Great Wall’s sub-brands that was promoted to full-scale SUV-specialised brand in 2013. Haval claims it has been the best-selling SUV brand in China for the past 11 consecutive years, which is technically correct if we take into account its sales as a sub-brand up until 2013. In May Haval holds 25% of the SUV market in China with just under 30,000 sales, above Toyota (22,840) and Hyundai (20,304).

ChangAn CS35 China May 2014ChangAn CS35

Haval was by far the most impressive Chinese brand at the 2014 Beijing Auto Show with world-class stand, models and staff (see Beijing Auto Show 2014: The most impressive carmaker: Haval). The H6 is currently the most popular SUV model in China with a whopping 118,700 sales in just 5 months so far in 2014, ahead of the VW Tiguan (107,300) and Honda CR-V (78,800). Illustrating its commitment to premiumise the Haval brand, Great Wall has postponed the launch of H8 twice amidst quality concerns, and the huge H9 (picture above), unveiled at this years’ Beijing Auto Show, will launch in H2 2014.

10. Chery Tiggo 5Chery Tiggo 5 in Chongqing, China – April 2014

Chery is the only other Chinese manufacturer to rank among the Top 10 SUV brands in May at #8 in-between Audi and Honda thanks to the Tiggo which has now developed into a range. The Tiggo used to be the best-selling Chinese SUV years ago but has weakened in recent times. The arrival of the Tiggo 5 could reverse the trend: it ranks #14 SUV model this month with 7,650 sales while the original Tiggo, now facelifted, is #17.

Zotye T600 Ürümqi April 2014Zotye T600 in Ürümqi, Xinjiang Uyghur Autonomous Region – China April 2014

The Haval H6 is followed by no less than 7 foreign SUVs before we find the 2nd best-selling local model: the ChangAn CS35 at #9 with 8,977 units (+57%),  spotted my times during my recent trip to China, especially in the countryside. The BYD S6 ranks #15 (+47%) while the GAC Trumpchi GS5 is #18 (+20%), managing to snatch its own Transformers character in Michael Bay’s Hollywood blockbuster movie released just a few days ago. Interesting evolutions include the FAW Besturn X80 at #26 (+97%), the Zotye T600 landing at #29 and the Landwind X-Series at #37 (+51%).

Landwind X8 China May 2014. Picture courtesy of bitautoLandwind X8

All-in-all, for now only Great Wall with its Haval brand is playing in the ‘premium’ SUV segment, with all other Chinese manufacturers competing in the budget end of the market. FAW with its Besturn sub-brand and Zotye are slowly but surely distancing themselves from the budget stigma and could join Haval in the quality stakes shortly. Design and quality have improved greatly over the past couple of years but the Chinese will need to continue to work very hard to hold off a continuous flow of new foreign SUVs and keep their market share at around 40%, let alone improve it. Big SUVs are especially successful in remote areas, so Haval’s strategy to go bigger, better and more expensive could pay off nicely. More local manufacturers need to follow these unbeaten tracks to ensure a prosperous future in the SUV segment.

Next Part in this Strategy series will be Passenger Cars, by far the segment where Chinese manufacturers perform the poorest.

Full May 2014 Top 76 All-models and Top 43 All-brands Ranking Tables below.

China May 2014 – brands – SUV only:

1Haval (Great Wall)29,568
18Great Wall6,427
32Beijing Auto (BAIC)1,946
38Zhongxing (ZX Auto)1,329
39SAIC Roewe780

China May 2014 – models – SUV only:

1Haval H624,40456%1118,666217,88911
2VW Tiguan19,77830%2107,310199,78222
3Honda CR-V14,396-1%378,826199,33333
4Toyota RAV413,52292%653,461117,80067
5Hyundai ix3512,0480%461,158156,87644
6Ford Kuga11,39344%555,32495,89159
7Nissan X-Trail11,058740%925,91915,3272241
8Audi Q59,483-1%745,890102,51478
9ChangAn CS358,97757%845,25575,643814
10Audi Q38,494129%2333,32037,3611430
11Kia Sportage R8,0616%1239,47088,2851212
12Nissan Qashqai7,988-26%1045,011124,589106
13Toyota Highlander7,93924%1138,83195,2161310
14Chery Tiggo 57,650new1332,8565,5141550
15BYD S67,49347%1644,47593,1681111
16Ford Ecosport7,40419%1532,20259,6801819
17Chery Tiggo7,103-5%2821,81378,2452713
18GAC Trumpchi GS56,68520%1831,44665,7422016
19Buick Encore6,50099%2132,82161,5631618
20Great Wall M46,157-33%1445,119128,05495
21Hyundai Santa Fe6,02720%2032,37274,4371715
22Mitsubishi ASX5,715160%2919,26736,0542931
23Peugeot 30085,49714%2228,08152,3182123
24Geely GX75,42082%1723,26052,4402522
25Chevrolet Trax5,293new417,13943 –
26FAW Besturn X805,26597%1932,12241,5051927
27Haval H55,164-18%2523,83361,8752417
28Lifan X605,007-6%2422,30756,6472620
29Zotye T6004,792new3214,5764333763
30Peugeot 20084,510new436,17446 –
31Mazda CX-54,279new2623,92322,5492336
32BMW X13,96365%2718,68822,9133035
33Mercedes GLK3,85222%3116,94539,3733228
34Suzuki S-Cross3,733new3020,9341,6272859
35Kia Sportage3,591-1%3318,59544,9523125
36Chevrolet Captiva3,3374%3416,51037,6113329
37Landwind X5/X6/X8/X93,19851%3516,42420,9833437
38Haima S53,193new366,17945 –
39JMC Yusheng2,423657%4012,78614,2893942
40Hyundai Tucson2,229-53%3915,75652,6923621
41JAC Refine S52,040-35%4215,96131,2263533
42ChangAn CS751,758new612,12759 –
43Skoda Yeti1,727new468,1074,0904154
44Haima S7 Knight1,576-55%3813,28542,2513826
45Brilliance V51,567-60%3712,63247,9364024
46Yema F121,556260%494,8985,6884949
47Changfeng Kingbox DUV1,387-30%447,43023,4164234
48Zhongxing C3 Urban Ark1,329new662,697056 –
49Hawtai (Baolige) B351,11341%504,0259,6655246
50Toyota Prado1,072-3%456,25518,3544439
51Hawtai Santa Fe1,021-37%474,44316,6045140
52Beijing B40995new553,295055 –
53Luxgen 7 SUV963-4%544,96620,2214838
54BAW (Beijing) Jeep80017%511,8915,2816151
55Roewe W5780-20%485,84910,5074745
56Luxgen 6 SUV751new –75165 –
57Gonow Saboo G3/Aoosed G5735245%523,3853,4165456
58Huanghai Aurora646-34%534,47811,7365044
59Jonway A380561-33%562,5358,0075748
60Mitsubishi Pajero Sport548new632,2273,3545857
61Chery X138434%571,99912,7186043
62Mitsubishi Pajero352314%646573,6406655
63Toyota Land Cruiser 200307-28%581,7725,2466352
64Zotye T200 (5008)293-91%623,84333,2485332
65Great Wall M2270-71%591,8369,6116247
66Nissan Paladin214-49%601,2174,6206453
67BAW (Beijing) Beiqi 2020 series102new682092917068
68Rely X573-46%73864337464
69Yema F1047-81%713472,7416858
70BAW (Beijing) 00746-79%651394557262
71Changfeng Leopaard46n/a –42767 –
72Dongfeng Oting41-21%672777786960
73Hawtai Terracan2547%69733787565
74Nissan Murano2310%721123777366
75Changfeng CS618-66%701575537161
76BAW (Beijing) Luba3-97% –43187667
TOTAL Chinese SUV122,14332%589,4451,189,684
TOTAL SUV318,19038%1,489,4362,988,329


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