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China Retail First Half 2019: Drive to reduce inventory triggers 4.6% uptick

Honda posts the largest year-on-year gain in the Top 13.

A last minute sales rush in June to clear out non-compliant vehicles ahead of the implementation of Stage 6 emissions standards means the Chinese retail market is actually up 4.6% over H1 2019 to 10.630.614 units. It has been a very interesting period, with dealerships spending the majority of the year so far trying to clear unsold inventory with heavy discounts instead of ordering more stock. As a result, wholesales (factory shipments to dealerships) have remained depressed all through the period whereas retail sales (dealership sales to end-consumers) have seesawed depending on the context – sales rushes in January ahead of the Chinese New Year holiday and in June ahead of Stage 6 emissions implementation – as you can verify on the table below. BSCB is the only media to go into the detail of both wholesales and retail sales in China. You can consult the H1 2019 Wholesales Report here.

China H1 2019 – Wholesales/Retail sales monthly comparison:

China 2019JanFebMarAprMayJunH1
Wholesales-15.8%-13.8%-5.2%-14.6%-16.4%-9.6%-12.4%
Retail27.5%-34.4%-5.3%-7.0%-4.4%41.7%4.6%

This is a very unusual environment as traditionally, wholesales ordered a certain months get sold as retail during the following couple of months, balancing the overall total. Not at all in 2019. The upside: thanks to an artificially boosted month of June (+42%!), the Chinese market starts H2 with a somewhat cleaner slate and wholesales could see the end of the tunnel now that Stage 5 vehicles can’t be registered anymore and Stage 6 vehicles absolutely must be ordered from the factory.

Volkswagen takes advantage of an all-new SUV lineup led by the T-Roc.

In this context, a striking 5 of the 7 best-selling brands easily outpace the retail market and post fantastic double-digit gains during the First Half. The leader remains Volkswagen (+11.9%), greatly helped by the (late) arrival of a complete SUV lineup now including the T-Roc (53.713), Tharu (50.448) and Tayron (44.219) among the most popular new launches outright over the period, joined by the T-Cross (6.004). The Tiguan (+8.6%) isn’t affected, and the Passat (+31.3%), Lavida (+26.1%), CC (+25.7%) and Bora (+4.3%) also help the brand into positive. Honda (+38.7%) easily claims the largest gain in the Top 13 and has established itself as a clear #2 whereas it only ranked #4 a year ago, this thanks to the renewal of its best-sellers the CR-V (+241.1%), Crider (+65%), Accord (+44.4%), Civic (+27.7%), the launch of the Inspire (23.589) and Envix (12.949) and strong scores by the Fit (+83.9%), Odyssey (+26.8%), Gienia (+24.9%) and Avancier (+13.9%).

The F7 helps Haval up 25.4%.

Toyota (+14.5%) completes a very dynamic podium, enjoying the (late) arrival of the twins IZOA (31.765) and C-HR (30.150) but also the Avalon (6.761) as well as strong holds by the Yaris L Sedan (+47.4%), Prado (+47.3%), Yaris L (+38.3%), Camry (+27.6%) and Highlander (+15%). Below Geely (-1.4%), Nissan (+11.5%) is also in great shape even though its range is ageing, surfing on the success of the new Terra (+148.3%), Tiida (+27.3%), Sylphy (+24.9%), X-Trail (+18.8%) and Qashqai (+17.1%). Haval (+25.4%) is the last double-digit gainer in the Top 10, taking full advantage of successful launches by the F5 and F7 bringing almost 65.000 additional sales, the H4 (+127.1%) and M6 (+164.7%). Hyundai (+5.7%) is also up thanks to the Celesta (+181.3%), ix35 (+48.5%), ix25 (+42.6%), Verna (+41.1%), Reina (+29.3%) and the new La Festa (38.620). Wuling (-2.7%) edges down but Baojun (-25.2%) is the hardest hit in the Top 10 due to freefalls by the 310W (-56.5%), 310 (-47.4%), 510 (-41.4%) and 730 (-30.7%) and despite the arrivals of the 360 (+276.8%), 530 (+14.6%), E200 (12.889) and RS-5 (6.096).

Hongqi is up 331.3% partly thanks to the new E-HS3.

Below, Hongqi (+331.3%), Borgward (+186.2%), Qoros (+85.5%), Lynk & Co (+60.9%), BMW (+46%), Jinbei (+44.8%), BYD (+38.7%), Chery (+34.9%), Roewe (+29.7%), Volvo (+25.8%), Cadillac (+23.5%) and JAC (+19.1%) all impress in the Top 50. The most popular new arrivals are Jetour (#38), Ora (#46), Bestune (#48), Weltmeister (#66), COS (#73), Neta (#78), Exeed (#80) and Dorcen (#84), all selling over 2.000 units. In the naughty corner, we find among the Chinese Sinogold (-96.1%), Kandi (-91.6%), Lite (-88.6%), Bisu (-83.6%), Zotye (-70.2%), Haima (-68.8%), Zhi Dou (-58.7%) and Soueast (-52.1%), and among foreigners Fiat (-72.3%), Suzuki (-64.2%), Renault (-61%), Luxgen (-56.6%), Peugeot (-52.9%), Land Rover (-43.7%), Citroen (-41.9%), Ford (-37%) and Jeep (-33.5%).

The Geely Binyue is the best-selling new launch.

Over in the models ranking, the podium is unchanged on the FY2018 with the VW Lavida (+26.1%) and Nissan Sylphy (+24.9%) both posting fantastic scores ahead of the Toyota Corolla (-10.1%) awaiting its renewal. The Wuling Hongguang (-8.1%) and Haval H6 (-5.3%) are both up one spot to #4 and #5 respectively, while the remainder of the Top 10 is entirely composed of Volkswagens: the Tiguan (+8.6%), Santana (+2.9%), Jetta (-1.2%), Sagitar (-2.2%) and Bora (+4.3%). Notice also the Roewe i5 shoots up 356 spots to #25. Out of more than 100 new nameplates hitting the retail sales charts over the past 12 months, the Geely Binyue (#46) deservedly wins the title of best-selling new launch in China (see our Test Drive here), distancing the Aud Q5L (#48), VW T-Roc (#57), Tharu (#64), Haval F7 (#69), VW Tayron (#73), Changan CS35 Plus (#78) and Geely Binrui (#81).

Check also: China Wholesales First Half 2019: Market down -12.4% to lowest in 4 years, Honda (+14.4%), Toyota (+12.8%), BMW (+26%) immune

Previous post: China Retail June 2019: Heavy discounts ahead of Stage 6 emissions standards lift market up 41.7%

One year ago: China Retail June 2018: SUV slump, sedan recovery confirmed

Full H1 2019 Top 110 All China-made brands and Top 785 All-models vs. Full H1 2018 figures below.

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