BEIJING (Reuters) – Two years ago, just one Chinese SUV ranked among the country’s top-10. In the first three months of this year, that number jumped to eight – a sign that Chinese automakers may have found their sweet-spot to battle foreign rivals in the world’s biggest car market.
Despite preferential government policies, local carmakers have failed to really compete with foreign automakers like Volkswagen AG <VOWG_p.DE> and General Motors in sedan sales. Shifting the battleground to the roomier sport utility vehicle segment may bring more success.
“The domestic SUV market has entered a period of enduring, rapid growth, the market scope has expanded and more indigenous brands have gained momentum,” a spokeswoman for Shenzhen-based BYD said in an emailed statement.
“Moreover, BYD, Great Wall, Geely and other indigenous brands have made enormous progress in technology, quality and service.”
Retail sales of SUVs jumped by more than a third last year to 3.82 million as Chinese drivers, who are growing wealthier and are often restricted to a single car purchase in crowded cities, increasingly opt for larger vehicles.
IHS Automotive predicts SUV sales will increase by more than a fifth this year, before 2016 growth slips into single digits.
Chongqing Changan Automobile and Great Wall Motor will launch fresh versions of their top-selling SUVs at this week’s Shanghai autoshow, while others such as BYD are expected to unveil new models in a rush to ride the rising popularity of SUVs.
SUV FOCUS
Chinese automakers have been helped by having the right products for the SUV market at the right price and well in advance of foreign rivals – just as SUV sales took off. It’s the result of years of focusing resources on developing “good enough” quality SUVs with attractive exteriors.
“Because local carmakers can’t really compete on sedans, they’ve really focused in recent years on launching more SUVs,” said Yale Zhang, managing director of Automotive Foresight in Shanghai.
Great Wall, for example, launched three new SUVs last year, helping its SUV business grow by a quarter, while its sedan sales dropped 57 percent as it pared back production.
Overall in 2014, Chinese brands launched 18 SUV models, while foreign competitors launched 11, Automotive Foresight data show.
New entrants to China’s top-10 SUVs are built on sedan frames and are priced cheaply enough to appeal to first-time buyers in a slowing economy.
Great Wall’s Haval H2 starts at 99,800 yuan ($ 16,087) and Changan’s CS75 at 108,800 yuan. Honda Motor’s CR-V, largely comparable to a Haval H6, starts at 193,800 yuan.
Global brands have dominated car production since China’s economic opening despite strict limitations that require foreign automakers to form 50:50 joint ventures with local partners in order to manufacture in China.
Some Chinese automakers have achieved a large enough scale with indigenous SUV brands and are seen as reliable by domestic drivers, though that’s not enough to command loyalty or premium pricing, said Tom Doctoroff, Asia-Pacific CEO for ad firm JWT.
Consequently, Doctoroff says, those brands are a long way from breaking into mature global markets like Europe or the United States, where leading Chinese SUV brands – which also include those from BAIC Motor, Chery [CHERY.UL], JAC Motors and Zotye – remain virtual unknowns.
(Editing by Ian Geoghegan)
Brought to you by www.srnnews.com
SRN News » Business
No comments:
Post a Comment