The Geely Icon is the best-selling newcomer in China in January.
After detailing Chinese January wholesales, as is the tradition we now detail all the new locally-produced launches for the month so you can keep up-to-date on the fastest-evolving automotive market in the world. Carmakers have rushed their new models before the Lunar New Year on January 25, and as it turns out before the coronavirus outbreak immobilised the country. We have 6 new launches in January, just like in December, and as we mentioned in the wholesales update, they are all SUVs! It’s a timely event coinciding with SUV wholesales outpacing cars for the first time in China this month. To thoroughly understand the dynamics at play in China, make sure you consult our Exclusive Guide to all 167 active Chinese Brands – a whopping 13 less than this time last month as the “first winter of the auto industry” is claiming its first victims.
1. Geely Icon (#175 – 2.029 sales)
Landing in the first place among all new launches this month is the striking Geely Icon. The #1 Chinese carmaker is clearly making a statement with this new vehicle, of which they gave us a glimpse at the latest Shanghai Auto Show as a concept. The Icon breaks with years of design language by the brand and is clearly aiming more upmarket (don’t all Chinese manufacturers do?) However the line-slim top headlights and rugged in-bumper below lights are a look that has been tied and tested by… Baojun since last year’s RS-5 followed by the RM-5 and RS-3, which is a markedly lower-tier carmaker. So rather inadvertently, Geely’s new opus actually looks like a Baojun, which could be a real issue down the track. The dash is also a move in a completely different direction, and strongly inspired by Jeep with the “Oh shit handle” ready to be grabbed right in front of the passenger seat. The beige tones are definitely premium, Geely designers seemingly having a lot of fun with this dash and it’s great to see.
Geely Icon interior: both fun and premium, a rarity for a Chinese brand.
After a disappointingly – and inadvertently – common exterior, the Icon stuns with a “premium Jeep” interior. It is priced between 115.800 to 128.800 yuan (15.100-16.800€ or US$16.400-18.300), a starting price that is out-of reach compared to its SUV best-sellers the Binyue (79.800-129.800) and Boyue (88.800-156.800). It enters probably the most competitive segment in China: compact SUVs, populated by the likes of the Haval H6 (103.000-141.000), Changan CS75 Plus (106.900-154.900), Haval F7 (111.000-153.700) and WEY VV5 (125.800-147.800), but its premium aspirations make it also compete with dearer foreigners such as the Honda CR-V (169.800-276.800), Toyota RAV4 (174.800-258.800) and Ford Escape (189.800-218.800). Geely is churning through SUVs fast and the Icon will stand out within its lineup but perhaps not on the market. Its dearer price should dampen Geely’s expectations – its Xingyue coupe SUV hasn’t crossed the 4.000 monthly sales mark – but we’d want at least 6.000 monthly units on a regular basis to call the Icon a success.
Bar for success: 6.000 monthly units
2. Ford Escape (#207 – 1.421 sales)
In China Ford (-39.4% in 2019) is bound to try everything under the sun to revive its sales. On a two-month positive streak in January, the American carmaker has chosen to swap names for its new generation compact SUV, while keeping the previous gen Kuga on sale. Kuga isn’t dead, long live the Escape! Hiting the market simultaneously in China, Europe and the United States, the Escape is in the right segment at the right time – as SUVs outpace cars for the first time this month – but as French carmakers and more recently Chevrolet with the new Encore and Trailblazer have painfully found out, just bringing an SUV to the Chinese market doesn’t instantly and miraculously equal success anymore, especially when you have fallen out of the top-of-mind brands list which Ford clearly has.
Ford Escape interior. Picture courtesy autohome.com.cn
That’s to say the Escape has its work cut out for it, and priced between 189.800 and 218.800 yuan (24.800-28.500€ or US$26.950-31.100) it will compete with the likes of the Honda Breeze (169.800-252.800), Toyota RAV4 (174.800-258.800), VW Tayron (185.900-313.900) or Buick Envision (189.900-279.900). It’s a very intimidating set and one thing is for sure, the Escape will struggle, but on the other hand Ford needs to launch vehicles such as this one to have a serious hope to climb back up the brands ladder. Originally launched in February 2013, its predecessor the Kuga scored a streak of 11 consecutive months above 10.000 wholesales between March 2014 and January 2015, peaked at 16.068 in June 2015 but hasn’t sold more than 2.000 monthly units since September 2018. Ford’s new Territory, despite being a JMC rebadge, hit a record 6.170 units in March 2019 and has remained above 2.500 units for the past 12 months. That’s a step in the right direction, but Ford should hope for more with the Escape.
Bar for success: 7.000 monthly units
3. LI One (#224 – 1.180 sales)
LI is Chinese for Lixiang Zhizhao, English for Leading Ideal or, much more simply, the first name of founder Li Xiang. LI was founded in 2015 as CHJ Automotive and after a failed joint-venture with ride hailing giant DiDi, relaunched in October 2018 when it unveiled the One SUV. LI reportedly has a 200.000 annual unit-production facility in Changzhou, Jiangsu province, so it is aiming high. Over a year after its unveiling – a rather long time even by Chinese startup standards – the One finally hits the market. It is a rather imposing, sleek but also quite unassuming 5m-long 7-seater, clearly the design inspiration was squarely aimed at Audi. Inside, it’s a touch screen fest (something Audi hasn’t got us used to), with a giant elongated screen acting as driver’s control, central dash and passenger entertainment all at once – a but like… Mercedes. Plus another screen below for car controls such as aircon. The rest of the dash is sober, mature, which contrasts with most other Chinese startups (Aiways, NIO and Weltmeister come to mind) and looks a million more bucks than any Tesla interior.
LI One interior. Picture courtesy autohome.com.cn
Now that we’ve covered the introductions, what potential for the LI One? Its price 328.000 yuan (42.800€ or US$46.600) will definitely thin buyers ranks right down, especially the ones eyeing such Chinese EV competitors as the GAC Aion LX (249.600-349.600) and the new Denza X (289.800-357.800) we’re covering further down. The NIO ES6 (358.000-548.000) is both dearer and much smaller, so marketing-wise LI would be well-inspired to target NIO. For a bit of perspective, the One is in the same price range as the Jeep Grand Commander PHEV (309.800-322.800) and VW Tiguan L PHEV (315.800-325.800), and that’s where the task seems almost unsurmountable. LI doesn’t have NIO’s coolness factor but instead is aspiring at Audi’s understated luxury… and prospective buyers. It could be a match made in heaven but LI will need lots of marketing dollars to cut through a very crowded Chinese EV field. If LI wants to rub shoulders with NIO (20.946 sales in 2019), Xpeng (16.608) and Weltmeister (15.587) as some of the most successful Chinese EV startups yet, the One will need to sell north of 1.500 monthly units on a regular basis.
Bar for success: 1.500 monthly units
4. Jetta VS7 (#272 – 649 sales)
Volkswagen’s new low-cost brand is now officially the most successful new brand launch in Chinese history with 66.656 wholesales just 5 months after its market entry last September. It’s mission totally accomplished for now for Jetta which has managed to woo away from a Chinese marque the buyers that can’t yet afford a “full-blown” VW. Whether this will damage VW’s image or standing remains to be seen however. So far the VS5 5-seater SUV has taken the lion’s share of Jetta brand sales with 3 out of 4 new registrations (49.535) and a peak of 13.089 last November, leaving crumbs for the VA3 sedan (17.212) which however seems to be a late starter, hitting a record 4.078 units this month. The fact that the new Jetta brand is shaping up to be considered an SUV brand is all good news for the new VS7, a 7-seater as its name indicates, based on the Seat Tarraco, itself a thinly-disguised rebadge of the VW Tiguan Allspace and/or Skoda Kodiaq.
In our Strategy piece about Jetta we published last May just after the brand was unveiled at the Shanghai Auto Show, we anticipated the VS7 could be Jetta’s joker card and harbour the brand’s biggest sales potential. And that was if its starting price was 150.000 yuan. In fact, in line with the VS5’s cutthroat rates (from 84.800 to 112.800 yuan), the VS7 is priced from 111.800 to 142.800 yuan (14.600-18.600€ or US$15.900-20.300). The two cars it is based on are a lot more expensive: the Skoda Kodiaq (186.900-268.400) and the VW Tiguan L (218.800-350.800). For perspective, the VS7 starts at almost exactly the same price as the VW brand’s cheapest SUVs: the Tacqua (114.900-159.900) and clearly undercuts its twin the T-Cross (127.900-159.900)!
Jetta VS7 interior.
In terms of competitive set, the VS7 also undercuts local 7-seater best-seller the GAC Trumpchi GS8 (163.800-259.800), as well as the Roewe RX8 (163.800-246.800) and Changan CS95 (165.900-213.900), but isn’t swooping down to the bargain basement prices of low-cost 7-seaters such as the Wuling Hongguang S3 (56.800-82.800), Chana CX70 (59.900-109.900) or Dongfeng Glory S560 (65.900-96.900). This leaves the VS7 with not that many competitors as a 7-seater, an impressive feat in today’s overcrowded Chinese market. In fact, local automotive website Autohome thinks the VS7’s main competition is the Baojun RS-5 (97.800-135.800 yuan) and Chery Tiggo 7 (85.900-150.900), both 5-seaters…
Everyone loves a bargain but 7-seaters are also bought for status where they are most popular, mainly in the more rural and remote regions of the country such as Tibet where it is in fact the VW Teramont (300.900-505.900 yuan) that heats up the charts for the Group. Can the VS7 pull the status card given its Volkswagen lineage, while keeping its tiny price a secret? The first month isn’t encouraging and VW will want at least 8.000 monthly sales to call the VS7 a success.
Bar for success: 8.000 monthly units
5. Denza X (#332 – 296 sales)
Denza is a joint venture between BYD and Daimler specialised in New Energy vehicles. Behind the prestigious two brands supporting the project, a very disappointing and blandly-designed unique model, called 500, has been surviving since 2014. Even though Denza’s factory in Shenzhen has an annual capacity of 40.000 vehicles, the brand has never crossed the 5.000 annual mark. If it were not for Daimler and BYD’s deep pockets, Denza would have long disappeared, but its fortune may be overturned thanks to this new, surprisingly attractive PHEV SUV: the X. Let’s hope prospective buyers will focus on its dashing exterior design, because the interior looks and feels cheap and old-fashioned, despite a giant touch screen stuck on the centre console like an oversized afterthought.
Denza X interior. Picture autohome.com.cn
The X is priced from 289.800 to 357.800 yuan (37.800-46.700€ or US$41.200-50.800) which confirms the similarly priced but much smaller Denza 500 (298.800-328.800) is now dead – it hadn’t sold a single unit since last June anyway. The X will compete against one PHEV blockbuster: the BYD Tang (229.900-359.900), as well as the likes of the GAC Aion LX (249.600-349.600), VW Tiguan L (315.800-325.800) and Jeep Commander PHEV (309.800-322.800). The X has a lot on its shoulders, namely the surviving of the brand, and Denza is maximising its chances with the X. The 500 had only crossed the 1.000 monthly unit-mark twice in its entire career (December 2017 and May 2019) but we’d want this on a regular basis to be reassured about Denza’s future.
Bar for success: 1.000 monthly units
6. Borgward BX3 (#361 – 137 sales)
Borgward is originally a German brand that found a sweet but short success at home after World War II notably with the Isabella coupe, ending in 1961. The brand was resuscitated in 2015 thanks to funding by Foton, itself the property of the BAIC Group. Designed as an exotic “European” up-market brand in the sprawling BAIC stable, Borgward does not manufacture outside of China but attempted a European launch in Luxembourg in 2018 to many get PR coverage in China and assess its credibility as a brand sold overseas, trying to meme MG in that way. Indeed the Luxembourg launch has been a miserable flop (11 sales in 2018, 19 in 2019). Despite these blurry origin stories, Borgward has survived in China for the past 3.5 years, adding up to 153.000 wholesales and even gaining an impressive 38% in 2019 to over 45.000 units, cracking the annual Top 50 for the first time. If the BX6 coupe SUV has already been ditched, the BX7 and BX5 now get a smaller sibling: the BX3.
Borgward BX3 interior. Picture autohome.com.cn
No surprises with the exterior design, the BX3 does look exactly like a miniature version of the BX5, keeping the family air well into its genes. Inside, there’s a bit of fun in the form of an fluo orange lining up the seats, air vents and central console, trying to take the buyer’s attention away from a decidedly small touch screen in today’s Chinese standards. The fun positioning is an interesting one, at a time when BAIC has streamlined all its sub-brands into the Beijing brand that it is aiming more up-market. Does Beijing now compete with Borgward? Potentially. Would BAIC can Borgward to let Beijing thrive? Also. The BX3 therefore needs to give the brand a new personality and in my view fails to do so. The pressure is on. Borgward keeps its tariffs level with Japanese and Korean carmakers to keep the illusion that it is an accessible German brand: priced from 96.800 to 130.800 yuan (12.700-17.100€ or US$13.700-18.600), the BX3 competes with the Nissan Kicks (99.800-144.800) and Kia KX3 aka Seltos (108.800-125.800) and with larger Chinese SUVs such as the GAC Trumpchi GS4 (89.800-151.800), but offers not much for the money.
Launched in July 2016, the BX7 hit a record of 5.556 wholesales in December of that year but as remained at or below 2.000 monthly sales since June 2017. The BX5 has been doing all the hard work: launched in April 2017, it started slow but reached a high of 5.276 units in May 2019. For Borgward to have a chance at seeing through the next 5 years we’d want the BX3 to hit at least 2.500 monthly sales regularly.
Bar for success: 2.500 monthly units
Previous month: China new models December 2019: Mercedes GLB and Jetour X95 land