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China January 2018: Focus on the All-new models

Traum S70

As per the BSCB tradition, after covering January sales in detail, we now focus on the all-new locally produced launches so you can stay up-to-date on the fastest-evolving automobile market in the world. After seven new entrants in December, the 2018 year starts with 9 newcomers for January vs. just 6 a year ago, but none reach 2.000 units for the month. Illustrating the incredible dynamism of local manufacturers, 7 of these 9 new entrants are Chinese, 3 of them inaugurating a new brand – as many as last month. One is Japanese and one is Czech, while in terms of segments we have 5 SUVs and 4 Sedans, the latter being interestingly high. But fear not, you can stay up-to-the-minute on the fast expanding list of all active Chinese brands by consulting our Exclusive Guide to all 143 Chinese Brands.

1. Traum S70 (#245 – 1.519 sales)

First off the starting blocks in January is new brand Traum, created by Zotye Auto in June 2017 and German for dream. The Chinese name is Junma (君马) translated as Supreme Horse. All Traum-branded vehicles will be manufactured by Jiangnan Auto, a subsidiary of Zotye which until now was reduced to selling a 1985 Maruti 800. Traum already has two nameplates to its name: the MEET3 based on the Zotye SR7 and this S70, looking pretty sharp with a gaping grille, aggressive headlight and a floating roofline. Priced from 81.900 to 115.900 yuan (US$12.900-18.300) and powered by a 156hp 1.5T engine mated to a 5-speed manual or 6-speed automatic, the S70 enters the most cluttered segment in China: compact SUVs, that also houses the best-sellers in the overall SUV segment such as the Haval H6, GAC Trumpchi GS4 and Geely Boyue. The task is difficult but not impossible, as Zotye has already demonstrated with the success of the Hanteng brand.

Traum S70 interior. Picture autohome.com.cn

The S70’s pièce de résistance is, as it is the case for more and more Chinese vehicles, to be found inside with a tremendous 25 inch touch screen combining the instrument panel and entertainment unit looking very luxurious indeed, especially for the price it’s asking. A seven-seat variant will be launched later, putting all the cards in its game to guarantee a solid success. All the elements are united for the S70 and future Traum nameplates to find its place in the crowded Chinese SUV market. A long-term objective of 5.000 monthly units will establish the brand the same way Hanteng did 18 months ago.

Bar for success: 5.000 monthly units

2. Lifan X70 (#263 – 1.238 sales)

Alternating ok months with disastrous ones (-27% in October, -16% in December, +10% in January), Lifan edged up 3% in 2017 at home with just under 110.000 units. The carmaker knows its salute is in the SUV segment, but after showcasing a stream of concepts in the local Auto Shows over the past 3 years, the actual launches have been far and few between. The Myway managed to stir some interest at launch (10.080 units in December 2016) but has been down roughly 50% year-on-year every month since last June, and the X80 has but registered a blip on the radar. We are still waiting for the X40, just as both the X50 and X60 are starting to painfully show their age. In comes the X70, and it does show some significant improvement design-wise, thankfully staying clear of copycats such as the outrageous Xuanluan MPV, a clone of Ford S-Max.

Lifan X70 interior.

Launched as a concept at the Shanghai Auto Show in April 2015, it took almost three years for the X70 to hit the market, and strangely it seems to have reached faraway shores faster than its home turf, with the X70 already featured and test-driven on both Argentinean and Russian car websites, markets where Lifan has managed to make some significant in-roads accompanied with Chery. Interior-wise, the progress is also showing, but the comparison set is particularly low, with Lifan still creating some of the worst-finished cockpits in the Chinese industry. No price info yet for the X70, but expect it to start around 70.000 yuan (US$11.000). The X70 is powered by a 2.0 engine mated with a 5-speed manual or CVT.

Bar for success: 4.500 monthly units

3. GAC Trumpchi GA4  (#269 – 1.164 sales)

Present at the Detroit Auto Show both in 2017 and 2018, GAC has reaffirmed its plan to enter the hyper-competitive (and saturated) U.S. market by the end of 2019. An ambitious target that would make it the first Chinese manufacturer to venture into the home of Donald Trump. GAC is counting on its Chinese joint-venture with FCA (Jeep and Fiat) to ease the process. At home, the carmaker has had a very impressive run over the past three years. The GS4 crossover has put the brand on the map with an unthinkable 800.000 units now in market, and the GS8 was the first large Chinese SUV to hit 10.000 monthly sales. The GM8 MPV is intending to reproduce the same segment-bending prowess just as the GS3 crossover is looking like a hot shot already. Sedans: like the majority of Chinese carmakers, not GAC’s forte.

GAC Trumpchi GA4 interior. Picture autohome.com.cn

That doesn’t mean GAC should give up, and it is launching this GA4, as polished outside and inside, to try and follow in the steps of Geely which has been hugely successful with its sedan lineup lately. The GA4 is powered by a 137hp 1.3T or a 114hp 1.5 mated with a 5-speed manual or 4-speed auto and is priced from 73.800 to 115.800 yuan (US$11.600-18.300). It will compete full-frontal with the Geely Emgrand GL (78.800-115.800), MG 6 (96.800-132.800), Venucia D60 (69.800-111.800) and Changan Raeton CC (89.900-138.900), a really tough bunch to compete with as they all offer wildly improved perceived quality and aggressive designs. The GA3 hit 8.585 sales for its 5th month of sales in December 2014 but has only hit 1.000 units three times in the past 3 months, while the GA6 lately oscillates between 2.000 and 3.200 sales and the GA8 just crossed the 1.000 unit-milestone for the first time this month. GAC should contain its enthusiasm for the GA4: high volumes are reserved to crossovers nowadays.

Bar for success: 3.500 monthly units

4. Skoda Karoq (#341 – 380 sales)

Launched in April 2017, the Skoda Kodiaq hit 7.000 sales in December. Skoda is on a roll, and just launched the locally-produced Karoq only a couple of months after its European debut. The Kamiq, slotted below the Karoq, will follow shortly with an official presentation scheduled for the Beijing Auto Show next April. The Karoq is set to replace the Yeti, launched here in October 2013 and whose 8.101 sales in January seem highly dubious, given they constitute – and by far – the nameplate’s volume record (previous best: 5.561 in December 2015). Skoda will want the Karoq to improve on the Kodiaq as it is smaller but also more affordable. Skoda’s positioning in China is much more high-market than it is in Europe, trying for a level of sophistication rivalling Volkswagen by playing on heritage with the “Since 1895” tagline – something that VW can’t emulate.

Skoda Karoq interior. Picture autohome.com.cn

If this is good for the bottom-line, sales volumes in turn can’t be expected to match those potentially reached in parts of Europe. Local press pits the Karoq against the blockbusters Haval H6, Changan CS75, Roewe RX5 and Geely Boyue as these four nameplates have managed to lift the brand image of Chinese manufacturers to such a level that the question is now genuinely raised as to whether to choose a foreign brand – traditionally always considered superior – or the best of the Chinese crop. Competing with local brands is not what Skoda had in mind and it indicates their ambitious aim at sophistication cannot really gel once the cockpit betrays its low-cost European origins.

Bar for success: 7.000 monthly units

5. Yudo π1 (#344 – 356 sales)

Yudo New Energy is an electric vehicle company partly owned by Fujian Motor and the Putian city, located in the eastern Fujian province. The brand’s first two production models, the π1 and π3 crossovers, were both unveiled at the Shanghai Auto Show in April 2017, with a commercial launch for the π1 happening in July 2017. Delayed reporting means wholesales figures have only become available in January 2018 at a low 356. Retail figures sourced elsewhere nevertheless indicate 2.258 sales for 2017 including 2.029 π1 in December.

Yudo π1 interior. Picture autohome.com.cn

Priced between 138.900 and 197.500 yuan before green cars subsidies (US$21.900-31.100), the π1 competes with the 2017 best-seller in the segment, the BAIC EC-Series (151.800-164.800 yuan) as well as other electric vehicles such as the smaller Changan Benben EV (154.800-171.800 yuan) and the larger BAIC EX-Series (192.900-202.900 yuan). The success of electric vehicles remain for now heavily dependent on car-sharing schemes in China, with private ownership still nascent. Yudo’s association with a province may restrict its expansion across the nation and muzzle its sales though.

Bar for success: 2.500 monthly units

6. FAW Junpai A50 (#349 – 321 sales)

Founded in 1953, First Automotive Works, or FAW, was the very first Chinese carmaker. Its state-owned structure has traditionally hampered its development but thanks to a slew of low-cost crossover the brand is up 3% at home in 2017 to 191.000 passenger car sales. FAW has remained far from the headlines though and in just over a decade has become almost anonymous, whereas it had China’s passenger car best-seller in 2005 with the Xiali N3. Far are the times Heavy trucks are another specialty. FAW splits itself into a handful of sub-brands rebadging the same vehicles. Besturn is for slightly more sophisticated fares whereas both Senya and Junpai are manufactured by FAW-Jilin, the latter specifically aimed at replacing Xiali low-cost models. Accordingly, the A50 sedan is available at cut-throat pricing: from a mere 60.000 to 68.000 yuan (US$9.500-10.700)! That’s a lot of – relatively modern and good-looking – car for the money, the A50 coming in at 4.59m long.

FAW Junpai A50 interior. Picture autohome.com.cn

Powered by a 112hp 1.5 engine mated with a seven-speed DCT, it also has some oomph and a respectable interior (especially for its price) that will surely help it fight the likes of the Chery Arrizo 5 (63.900-97.900 yuan), Geely Vision (53.900-72.900 yuan) and Great Wall C30 (54.900-74.900). The Junpai A50 will exclusively be aimed at third- and fourth-tier cities as well as rural areas. Unfortunately the precedents for Junpai sedans are dismal: launched in August 2016, the A70 only managed two 4-digit sales month and a grand total of 8.103 units since launch. FAW will rather look to the similarly-sized (but frankly dearer) Besturn B30 for inspiration: a personal best of 6.219 units in January 2016.

Bar for success: 3.500 monthly units

7. Cowin E3 (#372 – 151 sales)

In 2014, Chery decided to graduate its Cowin lineup into a fully fledged low-cost brand aimed at younger first-time buyers in second and third tier cities. But despite the services of a new design agency led by Pininfarina’s ex-director Lowie Vermeersch and two large and affordable crossovers, the V3 and X3, Cowin sold less than 50.000 new cars in 2017. Worse: sales are freefalling 66% at the start of 2018. Chery seems to already have given up: the X5 crossover is a rebadged Chery Tiggo 5 and for this E3, Cowin doesn’t makes the effort of renaming the car! This is indeed a Chery E3 with subtle cosmetic adjustments.

Cowin E3 interior. Picture courtesy autohome.com.cn

Problem: this is a very low margin, highly competitive segment with numerous Chinese offerings already well established and the Chery E3 wasn’t even a blockbuster to start with, peaking at 10.678 wholesales for its 5th month in market in January 2014 but failing to hit 2.500 monthly sales since March 2016…  Powered by the same 109hp 1.5 engine as the Chery mated with a 5-speed manual, to add insult to injury the Cowin E3 is not even particularly cheap: priced from 52.900 to 72.900 yuan (US$8.300-11.500). It is undercut in price by larger and arguably better vehicles such as the Geely King Kong (43.900-65.900 yuan), BYD F3 (43.900-77.900 yuan) and even a foreigner: the Hyundai Verna (49.900-73.900 yuan). You will have guessed it, the very launch of the Cowin E3 seems like a waste of marketing money.

Bar for success: 3.000 monthly units

8. Acura TLX-L (#377 – 137 sales)

Acura is a newcomer on the local production scene, with its first China-made nameplate being the CDX crossover launched in March 2017 and exclusive to this market. After 10 consecutive months above 1.000 units and a peak at 1.962 in December, the CDX crumbled in January at just 500 wholesales, coinciding with the release of the brand’s second local product: the TLX-L, an extended wheelbase variant of the TLX sold in America. It follows in the steps of almost all premium carmakers selling extended variants of their worldwide best-sellers to satisfy a Chinese clientele that gets chauffeured and therefore needs extra space in the back.

Acura TLX-L interior. Picture courtesy autohome.com.cn

All-in-all, 13.191 China-made Acuras were sold in China over the Full Year 2017, less than half the amount of China-made Infinitis sold in the same period (27.826) and only one-tenth of all imported Lexus (130.348). In other words, a disappointment. And given the SUV craze that is hitting China much like the rest of the world, it’s not certain that a sedan will help. Powered by a 208hp 2.4 engine mated with an 8-speed DCT, the TLX-L is priced from 279.800 to 379.800 yuan (US$44.100-59.900) and enters a segment already cornered by the Audi A4L (292.800-409.800), Mercedes C-Class L (312.800-489.000), BMW 3 Series L (288.000-486.900), Cadillac ATS-L (298.800-428.800) and Infiniti Q50L (279.800-409.800). Brand loyalty is much higher with premium marques in China, therefore convincing German premium owners to switch to little-known Acura that offers no price advantage will prove a challenge, a very big challenge indeed. An improvement on the slow-selling CDX is expected.

Bar for success: 2.500 monthly units

9. XPeng G3 (#403 – 39 sales)

Third new Chinese brand to make its first appearance in its home sales charts this month, Xiaopeng Motors or XPeng was founded in 2014 as an R&D bureau but is now launching its first vehicle, the electric crossover G3. XPeng Motors recruited former employees from Guangzhou Automobile, BMW, Lamborghini, BYD, ALi, Tencent, Huawei, and Samsung to help with the creation of the G3. Smartly, XPeng has chosen to opt out of manufacturing the G3 itself, instead giving this responsibility to Haima Auto in a factory located in Guangdong Province.

XPeng G3 interior. Picture autohome.com.cn

That will help reduce fixed costs and may mean the company will be able to provide high volumes if the G3 is met with success: the factory’s initial annual capacity is 50.000 cars, with a full capacity of 100.000 cars. It’s hard not to mention the Tesla Model X when looking at the G3, whose angled lines and extravagant touch screen remind of the American superstar. For a fraction of the price, Chinese carbuyers can now afford to drive a local equivalent that has started being surrounded with significant buzz. Initial sales are contained but the sky is the limit for this new startup. Based on the factory’s capacity, 3.500 monthly sales as a long term target seem like a reasonable bar for success.

Bar for success: 3.500 monthly units

Previous month: China December 2017: Focus on the All-new models

One year ago: China January 2017: Focus on the All-new models

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