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China 1st Quarter 2015: Baojun 730 and Ford Escort superstars

Baojun 730 China Q1 2014. Picture courtesy of chexun.net200.000 Baojun 730 have found a buyer in less than 9 months.

* See the Top 377 All-local models ranking by clicking on the title *

As is the tradition on BSCB, after going through detailed Chinese sales figures for March we explore the First Quarter volumes in order to extract longer-term trends. The Chinese passenger car market is still up by a robust 9% to 5.31 million units over the period but just 4% to 6.15 million deliveries including commercial vehicles. Some would say it’s the beginning of the end, I say it’s a very normal cooling off of market growth, not of the market as a whole. These quarterly detailed updates will turn out to be critical this year as the Chinese market is evolving so fast that if you miss a couple of months, you end up missing a significant part of the puzzle that this market is.

Haval H6 CoupeThe All-new Coupe variant will push Haval H6 sales further up this year.

The SUV segment is currently going through a euphoric time in China. Sales are up 40% year-on-year, and in what may be the most interesting reversal of fortunes in the past few years in this marker, domestic manufacturers are reaping most of the benefits of this new trend: sales of Chinese-branded SUVs have more than doubled compared to the same period last year, bringing their market share in the segment to a splendid 56%. The Haval H6 of course is leading the charge, stepping onto the national podium for the first time at #3 with sales up 29% to 87,749 vs. #11 a year ago.

Honda XR-V China December 2014. Picture courtesy of Toyota, Honda is banking on the SUV craze with the XR-V/Vezel twins.

This SUV craze has had a tremendous impact on the entire Chinese market and is starting to trigger a power shift between domestic manufacturers and foreign ones. As a foreign manufacturer present in China, if you don’t have at least one affordable SUV in your lineup, chances are you underperformed so far in 2015. Hyundai (ix25), Kia (KX3), Honda (XR-V/Vezel), PSA (2008, C3-XR) and GM (Buick Encore, Chevrolet Trax) are safe, but the best example of a company struggling because of the absence of any small SUV in its range is Volkswagen, still #1 brand in China but in difficulty with sales down 0.1%.

VW Golf China March 2015. Picture courtesy of bitauto.comAmong VW models, only the Golf frankly outperforms the market so far in 2015.

All mass market Volkswagens bar the Jetta (+10%) and Golf (+22%) underperform the market over the period: the Lavida is down 5% at #2, the Santana is slightly under the market (+8% at #4), the Sagitar is down 2% (#8), the Passat down 10% (#10), Tiguan up 1% (#11), the Bora down 7% (#21), the Polo down 1% (#24) and the Magotan down 14% (#28).

JAC Refine S3 China 2014. Picture courtesy JAC Refine S3 symbolises the Chinese SUV revival in 2014-2015.

In fact, 7 of the 10 best-selling SUVs in China over Q1 2015 are Chinese, that’s an all-time record for any quarter in the history of automobile in this country. Below the H6, the VW Tiguan is the only foreigner in the Top 8 SUVs at #11 overall, and is followed by the JAC Refine S3 (#22), ChangAn CS35 (#27). Haval H2 (new), ChangAn CS75 (new), Beijing Auto Huansu S3 (new) and Zotye T600 (+371%).

Top 10 best-selling SUVs in China – 1st Quarter 2015:

PosModelQ1 2015/14Q1 2014
1Haval H687,74929%67,890
2VW Tiguan67,2281%66,326
3JAC Refine S353,712new0
4ChangAn CS3549,70484%27,053
5Haval H241,743new0
6ChangAn CS7541,734new31
7Beijing Auto Huansu S340,173new0
8Zotye T60029,759371%6,313
9Ford Kuga29,331-11%32,829
10Hyundai ix3528,944-22%37,192

Venucia T70 China February 2015. Picture courtesy Venucia T70 could become one of China’s Top 10 best-selling SUVs later this year.

The Chinese stranglehold on the SUV market is about to get even tighter as the rhythm of new launches has all but slowed down: the Venucia T70 could come flirting with the Top 10 SUVs in the next quarter or two, the JAC Refine S2 will build on the astonishing success of its big brother and the Baojun 560 is the biggest wild card the segment has seen so far, judging by the tremendous success of its MPV counterpart the Baojun 730. And that’s only 3 out of at least a dozen new affordable Chinese SUVs about to be launched in the coming few months…

Beijing Auto Weiwang M20. Picture courtesy of Beijing Auto Weiwang M20 is hoovering sales off the Wuling Hongguang.

Which brings us to the other segment on fire in 2015: MPVs. Led once again by the Wuling Hongguang despite sales having peaked out (-10% to a still gargantuan 189,432 units in just 3 months), this segment has grown by roughly 30% so far this year, with the addition of numerous affordable Chinese options: the Baojun 730 is the most successful passenger car launch ever in China, clocking up an unbelievable 183,600 deliveries since its launch last August, including 84,526 this quarter (#5 overall). The Chana Honor (#16), Dongfeng Fengguang 330/360 (#26) Dongfeng Joyear MPV (#41) and Beijing Auto Weiwang M20 (#44) also see their sales surge year-on-year. This is it: the majority of Chinee small business owners have now upsized to MPV and ditched microvans, down an abysmal 30% so far in 2015.

Top 10 best-selling MPVs in China – 1st Quarter 2015:

PosModelQ1 2015/14Q1 2014Pos
1Wuling Hongguang189,432-10%210,1091
2Baojun 73084,526new0
3Chana Honor61,88431%47,39620
4Dongfeng Fengguang 330/36050,089142%20,70168
5Dongfeng Joyear MPV31,69928%24,71754
6Beijing Weiwang M2030,28687%16,16589
7Dongfeng Future28,979-23%37,47928
8Buick GL818,997-21%24,09458
9ChangAn Ouliwei18,93319%15,85693
10JAC Refine13,386-16%16,00590

Geely Vision China 2015. Picture courtesy 91aiche.comThanks to a completely new model, Geely Vision sales are up 6-fold on last year.

But the SUV and MPV segments are not the only ones where Chinese manufacturers are turning the tables around. 4 of the 5 sedans that registered the largest year-on-year gains in the Top 100 are Chinese: the Geely Vision is up 485% to #43, the BYD F3 up 247% to #30, the Geely EC7 up 87% to #17 and the ChangAn Eado up 57% #19. Only the Toyota Corolla, thanks to the addition of a new generation places in the Top 5 at +72% to #31. Other foreign gainers include the Skoda Octavia (+55% to #38) and the Peugeot 308 (+51% to #45) here too thanks to new generations.

Ford Escort China December 2014. Picture courtesy of auto.163.comThe Escort is exactly what Ford needed to turn up the heat in China.

If you still needed to get convinced that the Chinese car market is more dynamic than ever, one figure should suffice: there are 19 all-new models ranking inside the Q1 2015 Top 100. Below the Baojun 730 at #4, the other superstar is the Ford Escort, extremely impressive at #18 and 59,083 sales, even cracking the overall Top 10 in March to become the American manufacturer’s best-seller almost single-handedly lifting Ford up to #5 brand in the country. This is a game changer for Ford.

Out of the 19 new entrants, 9 are Chinese SUVs, 5 foreign sedans, 4 foreign SUVs, one Chinese sedan (the Beijing Auto Senova D50) and one Chinese MPV. In short, a perfect snapshot of the trends at play in the market this year. The Buick Envision (#56), Hyundai ix25 (#61), Honda Vezel (#63) and XR-V (#68) lead the foreign SUV charge with 3 entrants in the B segment, while the Toyota Levin (#64), VW Lamando (#69), Mazda3 Axela (#71) and to a lesser extend the Kia K4 (#79) have made their mark already.

Full Q1 2015 Top 377 All-local models vs. Full Q1 2014 figures below.

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