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China wholesales Full Year 2019: Market down -8.2% to lowest since 2015, New Energy sales down -1.2%, first “winter” for weak Chinese brands

Volkswagen (-0.9%) remains above 3m sales thanks to its new SUV lineup.

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It’s a second consecutive year of decline for the Chinese wholesales market – factory shipments to dealerships, and only the second drop in the past 30 years. The coughing of China has been one of the major developments in the automotive world these past couple of years, triggered by macroeconomic factors such as declining economic growth, a weak stock market, stagnating salaries, rising debt and a growing malaise among the population. We at BSCB don’t believe the ongoing trade war with the US has had much of a negative impact on the Chinese car market as over 95% of vehicles sold in the country are manufactured locally. However things may be about to improve in 2020. Halfway through 2019, China was down a ghastly -12.4% but H2 sales improved at -4% to 13.446.000 units despite green cars government subsidies being drastically reduced which led to the burst of the EV bubble. Overall the Full Year wholesales tally is down -8.2% to 25.769.000 units, the lowest level since 2015 (24.61m). If the drop is a lot bigger than in 2018 (-2.8%), it’s because the market decline, now on a streak of 18 consecutive months, but stabilised in December (-0.1%), started well into 2018, in July to be precise whereas it has covered the entirety of 2019.

Honda (+6.8%) ranks #2 brand in China for the third straight year.

Passenger Cars drop -5.2% over H2 to 11.317.000, leading to a Full Year score of 21.444.000 down -9.6%. Commercial Vehicles soften the blow with wholesales up 2.3% in H2 to 2.128.000 leading to a Full Year tally down just -1.1% to 4.324.000. In the Passenger Car detail, sedans and hatches drop -10.7% to 10.308.000, SUVs contain their fall to -6.3% to 9.353.000, MPVs freefall -20.2% to 1.384.000 and minivans drop -11.7% to 400.000. One of the main events of 2019 in China is the first ever decline of New Energy Vehicles by the time December ended as we predicted last month. Overall sales are down -1.2% to 1.206.000 including 972.000 EVs (-1.2%), 232.000 PHEVs (-14.5%) and 2.737 FCEVs (+79.2%). Note NEVs were up a fantastic 58.4% to 652.000 units at the half-year mark, but the cancellation of most government subsidies has bust the bubble: -4.7% in July, -15.8% in August, -33.9% in September, -45.6% in October, -43.7% in November and -27.1% in December.

Toyota (+8.8%) posts the largest gain among the Top 10 brands.

The combination of weak SUV sales between June 2018 and May 2019 followed by the pullback in July 2019 of the same New Energy government subsidies that had spawned dozens of new Chinese EV makers have transformed this period into what the Chinese media is already calling “the first winter of the Chinese automotive industry”. Chinese brands freefall -15.8% to 8.406.000 and 39.2% share of Passenger Cars vs. 42.1% in 2018. In contrast, German marques gain 2.1% to 5.189.400 and 24.2% share vs. 21.4% and Japanese fares are up 2.7% to 4.567.600 and 21.3% share vs. 18.8% a year ago. French (-56.5%), US (-23%) and Korean brands (-14.6%) are also in doldrums. The Chinese government did not prop the market back into positive with tax cuts back in 2018 because it wanted to let the market evolve naturally for once and trigger more competition so that only the strongest survive. The cull has now started and  you may have noticed our live list of Exclusive Chinese Brands Guide has gone down for the first time – from 189 to 180. Bisu, Dearcc, Enranger, Hawtai, Huasong and Jonway have already thrown the towel, more are on the brink (Singulato, Kandi, Link Tour, Traum and Zhidou) while large carmakers such as Lifan and Zotye are only hanging by a thread.

Geely remains the best-selling Chinese brand at home.

Volkswagen (-0.9%) remains ultra-dominant in the brands ranking, selling exactly twice the volume of the #2 at 3.1m units and energised by its new SUV lineup especially towards the end of the year with November wholesales up 12.7% and December up 19.4%. The Tayron (+786.7%), Tharu (+455.8%) and T-Roc (+157.1%) each end their first full year in market above 120.000 sales, with the T-Cross launched this year at half this level but already above 10.000 units in December. Meanwhile Volkswagen’s sedan lineup has more than offset the discontinuation of the Jetta (-67.9%) to the benefit of the Jetta brand – see further down – with the Lavida (+5.8%) repeating as the #1 model in the country, the CC (+48.2%), Bora (+36.2%) and Passat (+19.6%) shining but the Polo (-47.5%), Magotan (-26.1%), Lamando (-24.7%) and Golf (-24.3%) in great difficulty. In 2nd place overall for the third consecutive year, Honda (+6.9%) lodges another record volume at 1.55m units, helped by the Inspire (+595.9%), CR-V (+48.4%), Crider (+36.2%), Accord (+26.6%), Civic (+11.8%) and new Envix (50k). Toyota (+8.8%) simply posts the largest gain in the Top 10 now that its Chinese lineup is finally starting to resemble its worldwide one with the C-HR (+161.7%), IZOA (+82.2%), Yaris L (+21.6%), Yaris L Sedan (+18.6%), Levin (+15%), Camry (+13.6%) and new Avalon (62k) all chipping in, but the new generations Corolla (-4.4%) and RAV4 (-12.5%) coming in too late in the year to have a positive impact.

Haval stops the rot thanks to the F7 (pictured) and M6.

Geely (-11.6%) survives a difficult year, remaining the most successful Chinese carmaker at home by a comfortable margin at 1.22m units and having turned the corner by year-end with December wholesales up a whopping 36.1%. The first Full Year of the Binyue (+488.7%) and Binrui (+152.5%) and the new Jiaji (33k) and Xingyue (24k) have failed to offset deficits by its best-sellers the Boyue (-9.1%) and Emgrand (-14.4%) as well as freefalls by the Vision S1 (-61.1%), Emgrand GL (-46.5%), Vision (-44.4%), Emgrand GS (-28.5%), Vision X6 (-27.7%) and Vision X3 (-18.8%). Geely distances Haval (+0.4%) at #7 and Changan (-10.2%) at #8, the only other Chinese manufacturers in the Top 10. Haval puts an end to two years of steep falls (-9.4% in 2017 and -9.8% in 2018) thanks to the new F7 (+722.8%) and the low-cost M6 (+62.7%) just as its best-seller the H6 (-14.6%) suffers again. As for Changan, it has recovered by year-end with December sales surging 63.6% thanks to a renewed crossover lineup including a record-breaking CS75 Plus.

Baojun is attempting a more upmarket repositioning.

Nissan (-0.3%), Buick (-18.4%) and Hyundai (-14.1%) complete the Top 10 with Audi (+0.04%) keeping its premium crown (albeit not when counting retail sales including imports), taking some heat however from Mercedes (+18.4%) and BMW (+17.1%) sporting the only two double-digit gains in the Top 25 even though they rank #12 and #13 respectively. Audi stays stable thanks to the Q2L (+301.7%) and Q5 (+10%), Mercedes surges due to the new A-Class L (69k), GLC (+20.7%) and E-Class (+7.9%) and BMW shoots up with the help of the X3 (+222.1%) and 5 Series (+11.6%). At #11 Baojun (-31.3%) freefalls but has managed two solid scores towards the end of the year (+5.6% in October and -5.1% in December) thanks to the arrival in dealerships of 4 “new Baojun” models (RC-6 sedan, RM-5 MPV and RS-3 and RS-5 crossovers), in an attempt to pull the brand more upmarket. The jury is still out on whether this is a smart move, with the new models adding up to 90k wholesales or 15% of Baojun’s volume but reaching a 29% share in December.

Jetta was the most important – and successful – brand launch of 2019.

In the remainder of the Top 30, only Volvo (+22.6%) and MG (+4.5%) gain ground while Chery (-6.4%), Cadillac (-6.8%), Roewe (-9.5%) and BYD (-9.8%) managing single-digit drops thanks to a slew of successful new models. Jetour (+247.3%) ends its first full year of sales inside the Top 30, totalling 180k sales in just 16 months. This is record material, but there’s a new kid on the block, the most important – and successful – launch of 2019: Volkswagen’s new low-cost brand Jetta. Unveiled at the Shanghai Auto Show in April, Jetta launched into dealerships in September with 11.080 wholesales and reached 40k wholesales in just 3 months, making it the most successful new brand launch in Chinese history, toppling… Jetour. But there are clouds on the horizon, as December marked Jetta’s weakest month yet and first one below the 10k milestone, still achieving 49k in 4 months. Jetour might snatch back its records in 2020 after all… Great performers beyond the Top 30 include Hongqi (+272.5%) flying from record to record, Maxus (+97.1%), Bestune (+410%), Borgward (+37.6%), Ora (+1005.7%), Dorcen (+347.9%), COS (+300.7%), NIO (+158.6%) and Acura (+101.5%). Apart from Jetta, other 2019 brand launches were disappointing, with Xpeng (17k), Exeed (16k), Weltmeister (16k) and Geometry (13k) the only ones above 5k.

Jetour has now sold 180.000 units in 16 months.

Model-wise, the VW Lavida (+5.8%) manages a 2nd consecutive year – and ever – at #1 with 533k wholesales despite what we found was a very disappointing package when we test drove it in April. In fact the entire Top 5 is unchanged on 2018 with the Nissan Sylphy (-2.1%), Haval H6 (-14.6%), Wuling Hongguang (-21.3%) and Toyota Corolla (-4.4%) all putting on the brakes. The VW Bora (+36.2%) on the other hand soars 10 spots to #6, the VW Sagitar (-0.7%) is up one to #7, the Buick Excelle Yinlang (+6.6%) is up 3 to #8 and the VW Santana (-7.4%) is up one to #9, meaning Volkswagen holds 4 of the 7 best-selling sedans in the country. The Honda Civic (+11.8) surges 9 ranks to close out the Top 10. There is only one SUV in the Top 10 vs. 3 in 2018 (VW Tiguan and Baojun 510). The Geely Boyue (-9.1%), now facelifted, advances to #2 SUV at #11 overall, overtaking the Tiguan (-24.5%) while the Honda CR-V (+48.4%) surges 28 spots to #16 thanks to the new generation. Outstanding progressions also for the Changan CS75 at #19 (+29), the VW Tayron at #22 (+215) and the Roewe i5/Ei5 at #27 (+88). 78 new China-made models made their appearance in the Chinese wholesales charts in 2019, the Chevrolet Monza (#35) is by far the most successful above the BYD Song Pro (#72), VW T-Cross (#99), Toyota Avalon (#105), Honda Envix (#128), Ford Territory (#131), Dongfeng Forthing T5 (#138) and Jetta VS5 (#163).

Previous post: China wholesales December 2019: VW (+19.4%), Geely (+36.1%), Changan (+63.6%) help stabilise market (-0.1%), Jetta down -43.3%

One year ago: China wholesales Full Year 2018: VW Lavida pulls first ever win in first market decline in 28 years (-2.8%)

Two years ago: China wholesales Full Year 2017: Geely becomes #1 Chinese brand in market up 3.2%

Full Year 2019 Top 104 All China-made brands and Top 645 All-models vs. Full Year 2018 figures below.

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