China wholesales January 2020: SUVs outsell cars for the first time, market down -18.4% on Spring Holiday, COVID-19 effect yet to come

Roewe RX5 wholesales are lifted up 21.6% by the new MAX model.

Chinese wholesales (ex-factory shipments) drop for the 19th consecutve month in January at -18.4% to 1.932.700 units but unlike most articles you may have read on the subject, this is not (yet) because of the COVID-19 virus. The virus outbreak overlapped the Lunar New Year Holiday (22 January onwards), and as such dealerships were already closed and COVID-19 had very little impact on January wholesales in China. The main culprit is less working days vs. January 2019 as the Spring Holiday fell in January this year vs. February last year. The story will however be very different in February which is when we will see the true impact on the virus over the Chinese new vehicle market. Figures shared last Friday by the China Passenger Car Association indicate that over the first week of February, Chinese new car sales imploded -96% year-on-year to a daily rate of just 811 units and -89% over the 2nd week of the month to 4.098. CPCA anticipates a -70% drop in February and wholesales at -40% over the first two months of 2020. The graph below indicates the evolution of retail sales over the past two years.

The new GAC Trumpchi GS4 (+118%) helps SUVs overtake cars in January.

The January segment detail unveils a historical first: SUV wholesales surpass passenger cars for the first time in Chinese history at -14.1% to 767.123 vs. -25.9% to 742.240 for cars. Even though the SUV segment was  the first to flinch 18 months ago when the Chinese market started to sputter, we have remained bullish on SUV prospects given the sheer amount of new launches hitting the market over the past two years. In fact, our new launches monthly update for January 2020 will show that all 6 new models landing in Chinese charts this month are SUVs. Meanwhile MPVs skid down -37.2% to 80.167 and minibuses sink -33.3% to 17.138, bringing the Passenger Cars total down -21.6% to 1.606.668. As it has been the case over the past year or so, Commercial Vehicles behave a lot better at -5.7% to 326.000. New Energy Vehicles (NEV) continue to freefall at -51.3% to just 45.000 including 35.000 Battery EVs (BEV), down -52%, and 10.000 PHEVs (-38%). Finally according to the China Automobile Dealers Association (CADA), China’s Vehicle Inventory Alert Index (VIA) which measures the inventory level of car dealerships, stood at 62.7% vs. 56.2% a year ago, exceeding the official warning threshold for 25 consecutive months.

The X7 SUV lifts Changan’s new COS brand to unseen levels.

Over in the brands ranking, leader Volkswagen (-21.2%) roughly follows the market, helped by fantastic performances by the CC (+213.5%), Tayron (+203.3%), Sagitar (+58.5%), T-Roc (+55.3%), Golf (+21.9%) and Bora (+20.8%) but hindered by lousy turnouts by the Polo (-86.7%), Lamando (-67.8%), Lavida (-39.6%), Santana (-35.2%), Teramont (-27.3%), Tharu (-25.9%) and Tiguan (-24%). The T-Cross (-74.2%) is also down significantly vs. last month while the Tacqua (-2.3%) is stuck at a very low 1.549 units. Volkswagen’s advantage over the #2 brand thaws from 188.000 units in December to just 76.000 this month. Toyota (-9.8%) snaps this honour away from Honda (-7.7%), climbing to #2 for the first time in exactly a year with both Japanese carmakers managing to contain their loss to single-digits. Toyota is boosted by a record volume from the Avalon (12.038) and strong shows in context by the Prado (+19.7%), Yaris L (+1.3%), Highlander (-2.9%), Corolla (-7.3%) and Levin (-8.5%), while Honda benefits from record volumes by the Breeze SUV (12.907) and Envix sedan (6.796) as well as upticks by the Elysion (+90.2%), Odyssey (+26.2%), CR-V (+23.9%), Inspire (+17.5%), XR-V (+13.4%) and Vezel (+7.2%).

The Honda Breeze is an instant blockbuster: 22.000 wholesales in 3 months.

Geely (-29.5%) is back up to #4 despite enduring its largest year-on-year fall since last June, the arrival of the Icon (2.029) failing to compensate drops by its best-sellers the Boyue (-14.7%), Emgrand (-7.2%), Emgrand GS (-30.5%) and Binyue (-30%). At #5 Nissan (-9.4%) is the third Japanese brand out of 3 in the Top 10 to only fall single-digits, helped by the Teana (+42.4%), Tiida (+42.4%) and Kicks (+32.9%). Buick (-26%) is back up 3 spots on December to the #6 spot it held over the FY2019, with the new Enclave (record 3.862), GL8 (+68.1%), Regal (+25.6%), Encore (+21.8%), GL6 (+8.2%) and Envision (+2%) scoring encouraging lifts. Changan (-10.6%) is the best performing Chinese in the Top 10 thanks to the CS75 (+56%), Raeton CC (+36.2%), CS85 Coupe (+20.5%) and CS95 (+136.1%) while Haval (-31.8%) is handicapped by the freefalling of its best-seller the H6 (-41.3%) still accounting for 45% of its January volume even though the M6 (+18.4%) continues to shine. Audi (+5.7%) is the only one of the 3 German premium marques to gain ground year-on-year thanks to the Q2L (+161.4%) and A3 (+66%) with BMW (-5.5%) and Mercedes (-13%) in tow, both also outperforming the market.

Over 8.500 Mercedes GLB have already been shipped to Chinese dealers.

Outside the Top 10, GAC (+7.8%) signs its first year-on-year gain since last June with MG (+8.4%), Ford (+7.6%), Hyundai (+4%) and Roewe (-3.6%) also strong. Baojun (-55.4%) dives down 10 spots on December to #17, but its “new Baojun” more upmarket lineup now accounts for a record 37% of its wholesales vs. 28% in December and 25% in November. VW’s new low-cost brand Jetta is up a spectacular 90.3% on December to smash its volume record at 17.557, now adding up to 66.656 wholesales in 5 months. This is still a new brand launch record, eclipsing the 50.067 by previous record-holder Jetour. COS (+413.9%) also breaks a new record at 13.504 thanks solely to the X7 SUV (13.007) and Hongqi (+171.5%) aligns a 10th volume record in the past 11 months at 12.626. Volvo (+27.9%) and Jetour (+25.1%) also impress while among smaller brands, FAW (+275.8%) gets a B30 EV’s spurred swan song and Neta (+253.7%), Denza (+218.3%), Great Wall (+189.1%), Jaguar (+121.3%), Dorcen (+76.8%), Land Rover (+22.4%) and Maxus (+9.7%) also stand out. In the naughty corner, Lifan (-99.3%), Leopaard (-98.7%), Bisu (-96.4%), Yema (-89.1%), DS (-88.8%), Landwind (-88.3%), JMC (-87.6%), Luxgen (-83.6%), Qoros (-80.9%), Renault (-80.7%), Jeep (-80.2%), Citroen (-74.9%), Zotye (-70.1%), Wuling (-69.6%), Skoda (-66.1%) and Peugeot (-65.4%) almost disappear.

The Geely Icon is the best-selling new launch in January.

Model-wise, the Nissan Sylphy (-17%) snaps the pole position away from the VW Lavida (-39.6%) for the 4th time in the past 6 months with the Toyota Corolla (-7.3%) climbing back onto the podium for the first time since last July. The VW Bora (+20.8%) is up 3 spots on last month to #4, the Haval H6 (-41.3%) rounds out the Top 5 but its SUV supremacy is threatened by the Changan CS75 (+56%) ending the month only 641 units below, as well as the Geely Boyue (-14.7%) reducing the gap to the SUV crown to less than 3.000 sales. The GAC Trumpchi GS4 (+118%) is now taking full advantage of the new generation, as does the Roewe RX5 (+21.6%), with the MG ZS (+43.4%) and BMW X3 (+28.1%) also extremely strong. The Chevrolet Monza (#15) tops recent launches (<12 months) ahead of the COS X7 (#29), Honda Breeze (#30), Jetta VS5 (#32), BYD Song Pro (#37) and Toyota Avalon (#38). Additional volume record-breakers this month include the Hongqi H5 (5.768), Cadillac CT5 (4.693), Mercedes GLB (4.534) and Jetta VA3 (4.078).

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Previous month: 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 January 2019: VW sinks, Toyota, BMW smash records, 7th consecutive market drop (-15.8%)

Full January 2020 Top 100 All China-made brands and Top 445 All models below.