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

Honda manages to swim upstream in China, and the facelifted XR-V will continue the trend in H2.

It’s a Semester to forget for new light vehicle wholesales in China, down a ghastly -12.4% year-on-year over the First Half of 2019 to 12.323.000 units. This cancels four years of growth, represents the weakest H1 result since 2015 (11.85 million) and concludes a full year, or 12 consecutive months, of decline, unseen in over 3 decades. It’s easy to feel like it can’t get worse anymore, but analysts including myself have been feeling this way for the past 12 months and counting. The July 1 enacting of the State 6 emission standards by two thirds of the country’s provinces could provide the whiplash the market has been waiting for, as dealership stocks in all logic should be depleted by end-June, with most State 5 vehicles cleared out thanks to heavy discounts. It will be a clean slate in H2.

For now, Passenger Cars freefall -14% over the period to 10.127.000 units while Commercial Vehicles skid down -4.1% to 2.196.000 units. The PC detail show all segments drop by the double-digits: sedans/hatches at -12.9% to 4.962.000, SUVs at -13.4% to 4.301.000 (but up 0.3% in June), MPVs at -24% to 670.000 and minivans at -17.5% to 194.000. A ray of light is coming from the New Energy segment despite a wobbly May result (+1.4%): up 58.4% to 652.000 units including 510.000 EVs (+63.6%), 141.000 PHEVs (+41.9%) looking like they might be starting to pant a little and 1.079 FCEVs.

The new C-HR/IZOA tandem adds 57.000 sales to Toyota’s H1 volume.

Although still ultra-dominant, Volkswagen (-8.2%) can’t boast selling more than twice the amount of any other carmaker in China anymore. The German brand manages to lose less ground than the market thanks to a sudden SUV wealth now accounting for 23.7% of VW sales vs. 12.6% a year ago (and 32% in June), up 73.2% to 335.248 in total thanks to the new Tharu, T-Roc, Tayron and T-Cross. Outside of SUVs, it’s a mighty struggle at VW: apart from the Lavida (+3.7%) and Passat (+3.6%), the Touran (-64.3%), Phideon (-50.6%), Polo (-41.7%), Magotan (-37.7%), Jetta (-31.1%), Golf (-27.9%), Lamando (-26.5%), Sangitar (-26.5%), Tiguan (-23.4%) and Santana (-21.7%) all lose vastly more ground than the market over H1.

The true heroes of 2019 so far in China are Japanese: Honda (+14.4%) and Toyota (+12.8%) manage incredible double-digit gains in a market falling by the double-digits, the only gains among the Top 7 brands. The common ground: a long list of new and renewed models. For Honda, the CR-V (+88.1%), Accord (+57.3%), Fit (+56.2%), Crider (+31.1%), Civic (+17.4%) lead the dance alongside the new Inspire and Envix. For Toyota, it’s the Yaris L (+30.5%), Prado (+29.7%), Yaris L Sedan (+27.2%), Camry (+10.9%) and new IZOA, C-HR and Avalon. Below, Changan (-24.8%), Geely (-17.9%), Buick (-15%) and to a lesser extent Nissan (-1.5%) step on the brakes. Haval (+8.5%) turns its fortune around thanks to the new F7, the #1 new launch in China over the period.

SUVs now account for 1/4 of VW sales in China.

Mercedes (+11%), and BMW (+26%) leapfrog past Audi (-11.5%) to top the premium charts, while only MG (+3.2%), Cadillac (+2%) and BYD (+1%) manage an uptick in the remainder of the Top 30. Beyond, Hongqi (+986.5%) is the success story of the year, with Traum (+275%), Acura (+91%), Jinbei (+78.8%), Maxus (+33.2%), SWM (+30.7%), Borgward (+30.2%), Hawtai (+27.6%), Infiniti (+21.5%), Lynk & Co (+20.8%) and Volvo (+8.4%) also up. With over 54.000 wholesales in just 6 months, Jetour (#34) is the most successful brand launch over the period, followed by Ora (#44), Bestune (#45) and Dorcen (#58). Looking at Chinese EV startups, Xpeng leads the way at #61 with just under 9.600 wholesales ahead of NIO at #68 and Weltmeister at #69, both with almost 7.500 units.

Chinese manufacturers are hit particularly hard this year, such as Haima (-87.8%), Zhi Dou (-84.3%), Bisu (-81.6%), Qoros (-75.9%), Soueast (-72.3%), Karry (-72.1%), Brilliance (-71.3%), Lifan (-67.9%), FAW (-61.2%), Foton (-52.7%), Landwind (-50.6%), Zotye (-49.2%), Baojun (-46.7%), Leopaard (-46.3%), JMC (-44.2%), WEY (-39.6%), Changhe (-38.8%) and BAIC (-38.5%). Foreigners aren’t immune to the depressed context: Luxgen (-88.8%), Fiat (-81.2%), Renault (-76%), Peugeot (-60.7%), Citroen (-58.4%), Ford (-56.4%), DS (-55%), Jeep (-48.9%), Land Rover (-48.7%), Mazda (-41.5%), Jaguar (-34.3%) and Skoda (-30.3%) all would rather forget 2019. DS even stopped factory shipments in June, even though the presence of the brand in China is not in jeopardy according to an insider whose interview I will publish shortly.

The Haval F7 is the most successful new launch in China.

The VW Lavida (+3.7%) remains the most popular nameplate in the country, while the Nissan Sylphy (+0.8%) overtakes the Haval H6 (-16.5%) and Wuling Hongguang (-25.3%) to leap up to 2nd place overall, with the Toyota Corolla (-7.4%) rounding out the Top 5 like it did over the FY2018. The odd one missing is the Baojun 510 (-63.7%) down from #4 a year ago to #27 so far in 2019… The Buick Excelle GT (+32.3%) and Honda Civic (+17.4%) are the only two double-digit gainers in the Top 10, with the VW Bora (+2.3%) also breaking into the Top 10. The Roewe i5 (+890.1%), Honda CR-V (+88.1%) and Accord (+57.3%) are the most dynamic in the Top 20. The Haval F7 (#33) is the most successful new launch (<12 months) above the Geely Binyue (#36), VW Tharu (#44), Chevrolet Monza (#45), Jetour X70 (#51) and VW Tayron (#56).

Previous post: China Wholesales June 2019: GAC (+28%), Audi (+21%), Honda (+12%) can’t help 12th straight market decline (-9.6%) but SUVs up (+0.3%)

One year ago: China Wholesales First Half 2018: Market accelerates to +5.6% despite sudden SUV weakness

Full H1 2019 Top 97 All China-made brands and Top 585 All China-made models vs. Full H1 2018 figures below.