China July 2016: Focus on the All-new models

Borgward BX7

* See the July 2016 Top 393 All China-made models and Top 70 brands here *

With new car sales up a whopping 26% year-on-year in July, the Chinese market welcomes a boasting 8 all-new China-made models this month – 5 of which being Chinese SUVs and thus right on-trend – compared to just two in June but 9 in May. As is the tradition each month, BSCB puts a laser focus on these new entries to keep you up-to-the-minute about the largest car market in the world. The July 2016 class of all-new nameplates is a particularly momentous one as we welcome one marque reborn from the 1960s and one new Chinese marque instantly featuring three all-new nameplates…

Old and new Borgward logo

1. Borgward BX7 (#118 – 4.079 sales)

The most popular newcomer this month has a definite German accent to it, but the renaissance of the Borgward marque 55 years after it last made cars is anything but, rather funded and 100% owned by Foton Motor, property of the BAIC Group. As I described in our annual ranking of the most impressive Chinese carmakers at the Beijing Auto Show where Borgward placed at a stunning #3, Foton did a stellar job at reviving the once legendary marque. Its marketing efforts at the Show focused on its heritage, playing up the “Since 1919″ slogan despite the half-century production interruption and enumerating the brand’s achievements at the peak of its glory in the fifties: “A direct competitor to Mercedes”, “One of Germany’s Top 4 Carmakers” (along with Volkswagen, Opel and Mercedes), “The most complete product lineup of the time” and “Cumulative sales of 1 million units”.

Last September, I cringed at how much of a faux pas it was to relaunch the brand at the Frankfurt Auto Show, especially with a misleading “accessible premium” positioning. I stand by it, it was a mistake. But if the only objective was to get press in China and make the brand look more premium here – like anything European it seems – then it may have been a good idea. The BX7 is now in market almost a year after its German unveiling, and Borgward has made sure to feature numerous test-drives in Germany (such as the one pictured above) to prolong the illusion – as not a single Borgward will be manufactured in Germany, something the brand’s website conveniently bypasses. The Chinese name for Borgward (Baowo 宝沃) is a clever mix of BMW (Baoma 宝马) and Volvo (Woer’Wo 沃尔沃)… “Any similarities with existing marques would be purely coincidental” – not.

Borgward 230

As we saw in Beijing, the smaller BX5 and BX6TS are already on their way and will enlarge the brand’s lineup in the coming months. For now, the BX7 is ideally sized for a Chinese car market hungrier than ever for compact Chinese SUVs, and a first appearance above 4.000 monthly sales is a very satisfying figure indeed for what is basically an unknown brand – beyond what BSCB would have originally set as a bar for success. Reported Chinese sales however tend to be wholesale deliveries to dealers, so we should wait a few months to really declare this launch successful – or not.

If BAIC’s brands are still displayed in a joyous mess at every Auto Show (Senova, Huansu, Weiwang, Changhe, Foton, Gratour…), Borgward stands apart and it can only be beneficial for its sales performance. A much needed boost, as the BX7 is basically a rebadged BAIC: it is in fact the same vehicle as the BAIC Huansu S6, Weiwang S50 and Senova X65. The price is much higher though, from 169.800 to 242.800 yuan ($25.600-36.600) compared to the S6 (79.800-116.800), S50 (95.000-110.000) and X65 (106.800-156.800). All three nameplates have found their market, so chances are the BX7 will too but it might be tougher to convince Chinese buyers to fork out that much money for a rebadged BAIC.

Bar for success: 5.000 monthly sales

Cowin C3

2. Cowin X3 (#128 – 3.744 sales)

4. Cowin V3 (#212 – 1.296 sales)

5. Cowin C3 (#215 – 1.205 sales)

This month it’s not just one but three new nameplates from Chery spinoff brand Cowin that enter the ranking. Cowin, formerly a Chery sub-brand, transitioned into full-blown marque in August 2014 and premiered at the Chengdu Auto Show in September of that year. Yet its first appearance at a major Chinese Auto Show was in Beijing last April, and a cascade of new, sharply designed and perfectly relevant nameplates meant it ranked #5 in our list of the most impressive Chinese carmakers at the Show. The Cowin brand, aimed at younger buyers living in second and third tier cities and purchasing their first vehicle, now makes its very first appearance in the Chinese sales charts.

Cowin X3

As we detailed in China 2016 Photo Report: The Chinese car dealerships of Xining, the Cowin C3 sedan and C3R hatchback have been on sale in China for almost a year, yet the nameplate only appears now in the ranking at #215 with 1.205 sales. Delayed reporting sometimes occurs in China when a new brand appears in market. The X3 5-seat SUV, unveiled in Beijing in April, is for its part all-new. It is based on the tried-and-tested Chery Tiggo 3 with an entirely new and very modern design. Despite being priced from 63.600 to 93.900 yuan (US$ 9.600-14.200), the X3 features a 10.1 inch touchscreen in the centre console, something that is sure to attract a younger clientele. It is logically priced at a 7.000 yuan ($1.000) premium over the ageing Tiggo 3 (56.900-86.900 yuan) and enters one of the most crowded segments in China. Available with a 1.6L petrol with 127hp mated with a five-speed manual or automatic, it will compete squarely with such blockbusters as the Baojun 560 (66.800-92.800), BAIC Senova X35 (65.200-88.200), Brilliance V3 (59.700-102.700), Changan CS35 (72.400-94.400), Dongfeng Fengguang AX7 (64.700-82.700) and Ford Ecosport (69.800-100.800).

Cowin V3 

Unveiled like the V3 at the last Beijing Auto Show in April, the V3 has been categorised as a 7-seat SUV even though it is actually a rebaghed variant of the Karry K50 MPV. Powered by the same engine as the X3, the V3 is competitively priced between 60.800 and 77.800 yuan (US$9.200-11.700). It’s a clear premium over the Karry K50S, the SUV-esque variant of the K50 (50.800-68.800) but its SUV categorisation places the V3 as one of the cheapest 7-seaters in market, competing with the Changan CX70 (64.400-80.400) and Lifan Myway (55.700-76.800). Over in the MPV aisle, the X3 competes with the tremendously successful – but lately struggling – Baojun 730 (59.800-82.800). Chery/Cowin have played all the right cards to be successful here too with the V3. In this context, regular stints at 5.000 monthly sales would mean success for either the V3 or the X3, but these two could go much higher with their cutthroat pricing and attractive design.

Bar for success: C3: 3.000 monthly sales, X3 and V3: 5.000 monthly sales.

3. Roewe RX5 (#190 – 1.620 sales)

Also unveiled at this year’s Beijing Auto Show, the RX5 is a much-anticipated and very sleek addition to the Roewe lineup, the Chinese version of the defunct Rover marque, now owned the SAIC Group. Dubbed by the brand as “the world’s first mass-produced super internet SUV”, the RX5 is the first model equipped with the Yun OS software jointly developed with Chinese tech Alibaba, the Chinese Amazon. Roewe wants to attract a younger audience with the RX5, targetting the 26-35 year-old age bracket which has traditionally been the territory of SAIC’s other main brand, MG. The RX5 is indeed based on the same platform as the MG GS but priced higher at 97.800-177.800 yuan (US$14.750-26.800) vs. 84.700-153.700 for the MG GS.

This way, the RX5 competes with the entry-premium Chinese SUVs, such as the hugely successful GAC Trumpchi GS4 (99.800-153.800), Haval H6 Coupe (118.300-159.800), Geely Boyue (98.800-157.900), Leopaard CS10 (96.300-146.400), Qoros 5 SUV (119.900-178.900) and even the Haval H7 (145.300-165.300). On the other hand, although pricey for a Chinese SUV, the 4.54m long RX5 remains a very good deal when compared to China-made foreign offerings which demand a similar price for a distinctly smaller car such as the 4.29m Honda Vezel (118.800-175.800 yuan), 4.29m Mitsubishi ASX (93.800-150.000), 4.27m Hyundai ix25 (95.800-168.000), 4.28m Buick Encore (99.700-164.900), 4.27m Kia KX3 (85.800-159.800) or 4.17m Suzuki Vitara (99.500-158.800).

Roewe RX5 interior 

Sales-wise, the Roewe brand has recently been re-energised by the new 360 sedan that peaked at a cool 8.437 units last January, however still far from the brand’s nameplate record of 15.883 sales hit by the 350 in December 2013. But Roewe has never been able to rely on solid SUV sales, with the antique W5, a rebadged Ssangyong Kyron, never taking off since its 2011 launch. In this context, the 1.620 sales delivered by the RX5 for its inaugural month are actually a good performance already: the W5 has not signed a four-digit month since April 2014 (1.121) and only beat the RX5 July figure once: in January 2014 when 2.014 units found a new home. But the RX5 can – and should – go much higher, potentially to 5-digit monthly sales. The MG GS’s record is 6.741 back in December 2015, and a similar score hit regularly would already be a gage of success for the RX5.

Bar for success: 6.500 monthly sales

6. Luxgen 3 Sedan (#362 – 47 sales)

Another nameplate unveiled at the Beijing Auto Show last April, the Luxgen 3 Sedan has already launched in Taiwan where it is currently knocking at the Top 20’s door. Luxgen is a brand launched a few years back by the Taiwanese Yulong Group. The 3 Sedan is manufactured in China by the Dongfeng-Yulong joint-venture and is priced from 59.800 to 96.800 yuan (US$9.000-14.600), meaning it is entering arguably the most successful, crowded and competitive segment in the Chinese market. It will compete with the likes of the VW Jetta (5.08-10.04), Santana (5.19-9.88) Geely Emgrand EC7 5.70-8.73, Chagan Eado (starting at 56.900), Ford Escort (6.88-9.18) and Chery Arrizo 5 (5.59-9.49). Unfortunately, its dated Dongfeng 1.6L four-cylinder petrol 124hp engine, mated with a five-speed manual or CVT may make it a harder sell than it already is. Luxgen’s success in China has so far relied on SUVs, with the 6 SUV hitting a record 7.647 sales in January 2015. The 5 Sedan, launched in April 2015, only posted a four-digit sales month once, in May 2015 (1.956) so the 3 Sedan can only hope for a small slice of the gargantuan Chinese compact sedan cake.

Bar for success: 2.000 monthly sales

7. VW Phideon (#373 – 28 sales)

Unveiled to the world at the 2016 Geneva Auto Show last March even though this is a China-only nameplate, the Phideon is the new flagship VW sedan as the Phaeton production ended on the same month. It is manufactured at SAIC-Volkswagen’s No.3 plant in Anting, Shanghai, on the MLB platform that has also given birth to the high-selling Audi A6L. The Phideon is 5.07m long and proposed with a choice of two engines, a 2.0TSI and a 3.0T V6, both paired to a 7DSG. The Phideon is a very interesting addition to the Volkswagen range that had lately focused its efforts on its most affordable offerings such as the Jetta, Santana and Bora in order to fend off more and more competitive Chinese carmakers.

The premium sedan segment is alive and well in China though, and definitely worth another look by Volkswagen. The BMW 5 Series is the best-seller so far in 2016 (81.799 units), followed closely by the Audi A6L (79.879). It’s therefore a smart move from Volkswagen to try and upgrade its current Passat and Magotan customers (adding up to a whopping 182.171 units in the first seven months of 2016) towards a more affordable option than the Phaeton was (528.000 to 1.200.000 yuan or US$79.600-180.900). In comparison, the Phideon is priced at 359.000-670.000 yuan (US$54.100-101.000). That’s significantly higher than the A6L (249.000-503.200) and roughly at the same level as the imported A7 (418.600-656.600), ensuring minimal A6L/Phideon cannibalisation. Faithful to its traditionally crystal-clear segmentation, Volkswagen has priced the Phideon entirely out of the Passat/Magotan range (133.800-304.600) with only the top-end imported Passat Variant (379.600 yuan) sliding in. Similarly, the VW CC (252.800-342.800) doesn’t infringe on Phideon territory.

With a very clear positioning in the market and within the Volkswagen Group’s stable, how far up can the Phideon go sales wise? This predictive exercise is actually a delicate task, because never before had the Volkswagen brand produced such an expensive nameplate in China. Its previous attempt as selling full-blown luxury has backfired, even in China, with the Phaeton only finding 1.581 customers in FY 2015 for its last full year in market. The success of the A6L can’t be held as a benchmark as it comes on the back of a couple of decades of market integration. The Mercedes S-Class, more expensive (769.800-2.450.000 yuan) sold just under 27.000 units last year and the VW CC, currently the most expensive China-made VW, should reach the same level in 2016. The novelty effect should push the Phideon slightly higher on an annual basis.

Bar for success: 3.000 monthly sales

8. Geely Vision SUV (#384 – 4 sales)

The most discreet all-new July nameplate in China is also the most intriguing. The Vision SUV, or Vision X6, is in fact a facelifted Geely GX7 with a new and very nice face to fit with Geely’s current design standards. The Vision SUV makes it three new Geely SUV in the past few months alongside the Boyue and Emgrand GS. Although very late in catching up with the SUV madness, Geely has now hit the ground running. The Vision SUV is powered by a choice of 1.8 139hp engine with 5-speed manual and 1.3T 133hp engine with CVT. The price should stay around the same area as the GX7 (55.900-119.900 or US$8.400-18.100), meaning very competitive for a 4.60m-long SUV. The GX7 peaked at 7.675 sales back in January 2015, and we expect more from the Vision SUV.

Bar for success: 7.500 monthly sales

Previous month: China June 2016: Focus on the All-new models

One year ago: China July 2015: Focus on the All-new models