China August 2014: Focus on the all-new models
* See the Top 319 All-local models ranking by clicking on the title! *
As is the tradition on BSCB we pay special attention to the all-new models making their first appearance in China each month. And August 2014 has been the busiest month since we started this new monthly update over a year ago. No less than 8 new entrants, and most of them are pretty high profile models with very strong potential.
1. Baojun 730
One of the most important launches of the year, the Baojun 730 lands directly at #26 with 12,006 sales. Assuming this is the correct figure for August (and not the addition of pre-sales occurring over a couple of months), the Baojun 730 is already the #2 MPV below the Wuling Honguang and it simply delivers the strongest first month of any passenger car in China… ever. Previous best is the Hyundai Elantra Langdong at 11,613 units back in August 2012, however that wasn’t a ‘true’ first month as the model was incorporated into overall Elantra nameplate sales for a couple of months at first. The 730 is also the second best first ranking below that same Elantra Langdong (#21). Based on the Langdong’s first month vagueness, the Baojun 730 could well be the first passenger car in China to directly sell over 10,000 units for its first month.. All these records broken already, and there is a very good reason behind it.
A few months ago following my trip to remote Western China, I noted that a large part of the rural Chinese population, now getting wealthier, was upgrading from minivans to MPV in order to accommodate both a commercial use of their vehicle but also extended family transport (see Strategy: How can Chinese brands unlock their home market?). The advertising illustration above is spot on and reflects the main reason behind the booming popularity of affordable MPVs: the practicality and roominess of a large van for the price of a sedan. The Wuling Hongguang is head and shoulders above all other models in the Chinese market (let alone MPVs) so it does make sense that a similar model created by the same company would also be a hit.
Baojun is a relatively new low-cost brand initiated 3 years ago by the SAIC-GM-Wuling joint-venture with the 630 sedan. This sedan has been successful enough to keep the Baojun brand afloat (as opposed to Linian or Ciimo) but only crossed the 10,000 monthly sales milestone once (10,220 in December 2013) and broke into the top 50 twice since its original appearance in August 2011 (#46 in October 2012 and #49 in December 2013). So the 730 has already smashed the brand’s records for its first month. The Baojun 730 debuted at the Beijing Auto Show and I reported about it at the time. According to Carnewschina, the 730 starts at 69.800 yuan and ends at 81.800 (US$11.400 – 13.300), an absolute bargain indeed and as such without real competitor as it slots below the Wuling Hongguang in terms of price.
2. Toyota Levin
A new nameplate but a familiar model, the Toyota Levin lands at #62 with 6,588 sales. This is one fine example of the counter-productive (?) joint-venture situation in the Chinese automotive market. Toyota has two joint ventures in China: while FAW-Toyota gets the European model, supposed to look sophisticated (read boring) and aimed at older buyers, Guangzhou-Toyota gets a sporty (only in design) version of the US model, aimed at younger buyers. The engines and prices (120.000-160.000 yuan, that’s US$19.550-26.100) are exactly the same though. The new gen Corolla is currently accounted for under the general ‘Corolla’ nameplate at #16 this month.
What’s the Levin potential? Well it is already Toyota’s 4th best-selling sedan below the Corolla, Camry and Vios, all established nameplates with years of previous sales behind them. So in a way we already have a mission accomplished here, and any future milestones (a Top 50 seems assured but a Top 25 harder) will be impressive. Tycho from Carnewschina gives a pretty accurate description of this join-venture doubling up mess: “All this waste of resources and marketing money is a rather typical result of the weird joint-venture system. Volkswagen, Honda and others are also selling various cars manufactured by their various joint ventures that are competing with each other, instead of with the competition. The Toyota marketing plan sounds like a good idea in theory.” But then a ‘sporty’ Toyota Corolla was also seen on the Toyota booth at the Beijing Auto Show. Wait wasn’t it supposed to be the sophisticated, boring one of the two?
Having said all this, the Levin delivers in terms of sales. So perhaps this double joint-venture situation is not that penalising after all.
Next we have two small SUVs by the same automaker, making their first appearance in the Chinese ranking exactly at the same time, along with a new sub-brand: Beijing Auto Huansu (translated as ‘magic speed’). These two SUVs are built in the city of Chongqing by Beiqi Yinxiang Automobile, a new joint-venture between Beijing Auto (Beiqi) and the Yinxiang Motorcycle Group, and as such they both sport the logo of the joint-venture and not the Beijing Auto one – confusing, as always. This joint venture also makes the new Beijing Auto Weiwang M20 mini-MPV that launched on the Chinese market last year (and yet another sub-brand!).
3. Beijing Auto Huansu S3
The Beijing Auto Huansu S3 lands directly at #85 with 5,280 sales. It is a seven-seater very affordably priced between 61.800 and 72.800 yuan (US$10.100-11.900), positioning it across the two fastest growing market segments in China: small SUVs and MPVs. As described above with the Baojun 730, many Chinese car buyers, especially young families, have discovered these segments as a preferable alternative over similarly prices sedans or hatchbacks that tend to be much smaller inside. On top of this, the Huansu S3 is one of only two mass seven-seats SUVs at this price level, competing with the FAW Daihatsu Xenia S80 (#204). In this context its current ranking is already redefining the budget 7-seat SUV sales potential, so anything frankly up like a Top 50 ranking would trigger other Chinese carmakers to follow suit very soon.
4. Beijing Auto Huansu S2
The 5-seater variant of the S3, the Beijing Auto Huansu S2 launches a little lower at #122 and 3,520 units. Price starts at an even more enticing 58.800 yuan (US$9.600) and ends at 69.800 yuan (US$11.400). While the S3 ventures into unknown (but promising) territory given its larger size, the S2 slots into a very successful segment in China, competing with the Great Wall M4 (best ranking: #23), Chery Tiggo3 (currently #28) and Changan CS35 (best: #43), all crossing the 10,000 monthly sales milestone at some stage. It might take a bit of time to establish the Beijing Auto brand in this segment but the demand is there and a Top 60 ranking within the next 12 months would be a fantastic achievement.
5. GAC Trumpchi GA3S
Not really a new model per se but worth mentioning because of its uniqueness, the GAC Trumpchi GA3S arrives in 157th position with 2,333 sales in August. It is the sporty version of the GAC Trumpchi GA3 launched 18 months ago and currently ranking #256 with 399 units sold, after peaking at #135 and 4,041 sales last December. There. That’s why I’ve singled out the GA3S as it sold almost 6 times more than its ‘non-sporty’ version in August, which is rather unusual and extremely interesting. Guangzhou Auto (GAC) has two sub-brands, each with their own logo: budget Gonow and masstige Trumpchi, one of the most impressive carmakers at the Beijing Auto Show in my view (I ranked it #3) while Gonow was one of the worst at #28… A history-making large scale product placement in Hollywood mega-budget Transformers 4 this year is starting to put GAC Trumpchi on the worldwide map and the GA3S could soon join the GS5 SUV (best ranking: #56) inside the monthly Top 100.
6. Kia K4
Another very important new nameplate to make its first appearance in the Chinese ranking in August is the Kia K4 at #163 with 2,094 sales. The K4 is a China-only compact sedan, Kia’s version of the very successful Hyundai Mistra that has sold over 10,000 monthly units in China for the past 6 consecutive months after peaking at 11,749 last January. Even though Kia pushes the premium design cues as hard as Hyundai does in China, it is positioned cheaper and as such the K4 starts lower at 128.800 yuan (US$20,990) vs. 149.800 (US$24.700) for the Mistra. Both models end at 189.900 yuan (US$31.300). Other main competitors are the VW Sagitar (#4 in August), Honda CRider (personal best of #10 last December) and Citroen C4L (#70 highest). Chinese sales of Kia sedans average around 75% of their Hyundai counterparts, which would place the K4 just under 100,000 annual units and edging into the Top 50. Still far from it but it should be the benchmark for success.
7. JAC Refine S3
The fifth new Chinese model to make its debut at home in August is the JAC Refine S3, originally unveiled at the Beijing Auto Show, at #166 with 2,000 units sold. The Refine S3 is yet another mini SUV taking advantage of the sales surge in this segment over the past 24 months. It is priced between 65.800 and 84.800 yuan (US$10.700-13.800) and, like the Beijing Auto Huansu S2 described above, will compete against the 10,000 monthly sale-topping Great Wall M4, Chery Tiggo3 and Changan CS35. JAC already has a foot in the SUV segment with the Refine S5 (#151 so far in 2014) so may have an easier time than Beijing Auto to impose its own S3. However we may be nearing saturation in the Chinese mini-SUV segment: is there really more room for yet another mini clone of the Hyundai ix35? JAC thinks so as the S3 is part of a heavy SUV attack that will also include the S2 and the Heyue S1 in the coming months.
8. Cadillac ATS-L
Finally the 8th and last new entrant this month in China is a model well known to all of you but which has just kicked off local production, thus now allowing it a spot in this ranking (no imports model data is communicated in China): the Cadillac ATS at #197 with 1,160 sales. However as it is the case for most sedans in the luxury category, the owner is not the driver and more backseat legroom is required: the Cadillac ATS is manufactured in China exclusively in an extended wheelbase version called ATS-L, like the BMW 5 Series L and Audi A6L. The ATS-L is only the second Cadillac to rank in China this year along with the XTS at #145 in August and #149 year-to-date, so it is starting at a solid level for the brand and in time to pre-empt Lincoln’s launch in the country.
Previous month: China July 2014: Focus on the all-new models
One year ago: China August 2013: Focus on the all-new models
Full August 2014 Top 319 All-local models Ranking Table below.