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China wholesales September 2019: New Jetta brand lands with a bang, EV bubble bursts (-33%) in 15th straight market drop (-5.2%)

VW’s new Jetta low-cost brand has now officially landed in China.

Chinese wholesales endure a ghastly 15th consecutive month of year-on-year fall in September but, somewhat encouragingly, a third straight single-digit drop at -5.2% to 2.271.000 units for the month. This is split into 1.931.000 passenger cars (-6.3%) and 340.000 commercial vehicles (+1.9%). Year-to-date, wholesales in China remain down a harsh -10.3% to 18.371.000 units including 15.249.000 passenger cars (-11.7%) and 3.122.000 commercials (-3.4%). In the September passenger cars detail, sedans/hatches skid -7.7% to 932.000 and 41% share vs. 42.1% a year ago, SUVs end a run of two consecitve months of gains at -3.3% to 841.000 and 37% share vs. 36.3% in September 2018 and both MPVs down -13.3% to 127.000 and minivans down -12.5% to 31.000 continue to freefall. Year-to-date, sedans/hatches tumble down -12% to 7.421.000 and 40.4% share vs. 41.2% over the same period in 2018, SUVs fare a little better at -9.3% to 6.560.000 and 35.7% vs. 35.3% a year ago, MPVs implode -22.1% to 982.000 and minivans struggle down -15.1% to 286.000.

Baojun has now well and truly kick-started its renaissance with the striking new RM-5 MPV.

But once again the most striking segment development this month is the burst of the electrified vehicle sales bubble: down an abysmal -33.9% to just 80.000 units including 63.000 EVs (-33%) and 17.000 PHEVs (-37%). This follows a -4.7% drop in July and -15.8% fall in August… The year-to-date New Energy volume is now up 21.3% to 872.000 including 692.000 EVs (+27.9%), 179.000 PHEV (+0.8%) and 1.251 fuel cell vehicles. Looking at brand origin, Chinese carmakers (-10.8%) are back to losing share at 719.100 units and 37.2% of the passenger car market vs. 39.1% a year ago and 38.7% year-to-date at 5.901.400 (-18.5%). In contrast, German brands gain 5.3% in September to 489.200 and 25.3% share vs. 22.5% in September 2018 and 24% YTD at 3.659.800 (-2.3%) and Japanese badges edge up 1.2% to 418.100 and 21.7% share vs. 20% a year ago and 21.7% YTD at 3.309.000 (+3.8%).

The VW Tayron is up to #2 SUV in China below only the Haval H6.

Market leader Volkswagen (+4%) manages its first year-on-year gain of 2019, missing out on a 300.000-unit month by just 5.000 sales, and now fully benefiting from a record-breaking SUV lineup with the Tayron (22.093) and T-Roc (15.043) both posting a 4th consecutive all-time record volume and the T-Cross (7.203) snapping a third straight one just as the Tharu scores a 6th five-digit volume month in a row. The Bora (+61.2%) and Sagitar (+48.7%) sedans also help the German carmaker just as the Jetta (-99.4%) sees its production halt to make room for the new Jetta VA3 low-cost sedan (see further down). Honda (+4.6%) nudges a 7th consecutive year-on-year gain – but 2nd straight single-digit one vs. 5 prior double-digit upticks – thanks to the Crider (+638.9%), CR-V (+12.2%), Accord (+9.9%), Civic (+8.4%) and XR-V (+6.5%) with the new Envix (6.275) and Inspire (5.203) stabilising at very satisfying levels.

Toyota (-0.5%) only edges down for what is its third straight year-on-year drop following 15 months of gains, with its September volume spruced up by the IZOA (+35.8%), Camry (+18.4%), Yaris L (+16.5%), Corolla (+11.2%), Levin (+7.2%), C-HR (+1.9%) and new Avalon (4.692) but hampered by a RAV4 (-72.1%) in full generation changeover mode. Nissan (-3.9%) ends a run of two positive months as a stable Sylphy (+0.4%) and surging Tiida (+62.1%), Lannia (+37.4%) and Kicks (+15.7%) fail to override heavy falls by the X-Trail (-16%) and Qashqai (-10.6%). Chinese #1 Geely (-9.6%) is stuck in 5th place for the 4th time in the past 5 months but sees its drop thaw to single digits (-9.6%) for the first time since last March.

Haval wholesales leap up 22.1% year-on-year in September thanks to the F7.

Buick (-24.8%) is awaiting a raft of new SUVs including the Encore GX but Haval (+22.1%) is now well and truly back on track, managing the largest year-on-year gain among the Top 25 brands at #7 thanks to the new F7 (12.304), the M6 (+131.5%) and H4 (+32.1%) and despite a struggling H6 (-10.7%). All Top 3 premium fares are in positive this month, led by Audi (+2.1%) above Mercedes (+16.7%) and BMW (+7.9%) with Roewe (+17%) and Chery (+12.6%) also shining in the Top 20. Baojun (-20.4%) manages its smallest drop – albeit still scary – since July 2018 and its largest volume since last January at 60.023 thanks to the thunderous arrival of two all-new nameplates that join the RS-5 in a complete revamp of the brand: the RM-5 MPV with a huge 8.635 wholesales for the month and the RC-6 sedan at 5.337. This means the new Baojun models represent 28% of the brand’s sales in September.

2nd consecutive all-time record Chinese wholesales volume for Volvo.

Further down the ranking, Jetour (+79.2%) and Volvo (+29.9%) both break their all-time volume records for the 2nd month running at 13.934 and 13.422 respectively, while for Hongqi (+187.4%) it’s an incredible 5th consecutive all-time record month, almost doubling its personal best from 6.463 last May to 11.535 this month for what is only its second five-digit finish ever after last month (10.012). Notice also Ora (+165.5%), Maxus (+155.6%), COS (+144.9%), Landwind (+100.2%), Acura (+89%), Infiniti (+20.9%), Changhe (+20.1%), Venucia (+18.6%), Land Rover (+18.3%) and Borgward (+16.9%) all posting fantastic gains.

But the biggest news in September is the landing of Volkswagen’s new China-only low-cost brand Jetta, an instant blockbuster with 11.080 wholesales for its initial month: 8.140 from its new VS5 SUV and 2.940 from its new VA3 sedan. This is simply the largest first-month volume for any new brand launched in the history of automobile in China, but it shouldn’t be that surprising given it’s coming from the runaway market leader of the past three decades. The 3 most successful brand launches in the past decade (based on first 12 months wholesales) all started well below but only had one nameplate: Jetour at 7.777 in September 2018, Lynk & Co at 6.012 in December 2017 and WEY at 3.166 in June 2017. Check out our take on VW’s strategy behind at last launching a low-cost brand in China, which in fact is an attempt at replicating the Dacia “miracle” in Europe albeit in a much more competitive environment. Wholesales can be a little misleading at the start of a brand or nameplate’s career as primarily composed of demo models sold to dealerships, so we’ll wait to see the first few months of retail deliveries (ie “true” sales to end-customers) to pronounce ourselves on Jetta’s success, but the first indicators are fully in the green indeed. We study the VS5 and VA3 in a lot more detail including pricing, competitive set and sales prospects in our “Focus on the All-new models” September 2019 article.

The Changan CS75 is back above 20.000 monthly wholesales.

Over in the models ranking, the VW Lavida (+2.6%) reclaims the top spot off the Nissan Sylphy (+0.4%), increasing its YTD lead to over 56.000 units, the VW Sagitar (+48.7%) and Bora (+61.2%) round up the Top 4 like last month ahead of the Haval H6 (-10.7%) and Wuling Hongguang (-18.7%) just as the Toyota Corolla (+11.2%) is back atop the charts now that the new generation has kicked in. 8 sedans make their way into the Top 10 vs. just one SUV and one MPV. The VW Tayron (#11) jumps to a best-ever #2 SUV spot ahead of the Geely Boyue (+0.5%) in positive for the first time since last March thanks to its facelift while the Changan CS75 (+45.8%) scores its first 20.000+ month since January 2018 thanks to the new PLUS model. Nameplates breaking their all-time volume record in September also include the Haval M6 (15.108), BYD Song Pro (15.039), Jetour X70 (13.934), Chery Tiggo 8 (11.890), Lynk & Co 03 (6.528), Dongfeng Fengxing T5 (6.470), Audi Q2L (5.494), Hongqi H5 (4.963), GAC NE Aion S (4.006), Beijing Zhidao X3 (3.568), Geely Star (3.270) and Volvo XC40 (1.670).

Previous month: China wholesales August 2019: SUVs up 1.5%, electrified vehicles down -15.8% in 14th consecutive market loss (-6.9%)

One year ago: China wholesales September 2018: Sedans trigger third consecutive market decline

Full September 2019 Top 95 All China-made brands and Top 460 All-models below.

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