For all the talk about China's slowing economy, its automotive sector continues to perform very well indeed – as shown by reports in Automotive News China on both the whole-year results per brand for 2016 and the overall projection for light-vehicle sales in 2017: up 5% to 25.7 million.
This year's sales increase, projected by the China Association of Automobile Manufacturers, is well below the figure for 2016, when light-vehicle sales rose 15% year-on-year to 24.4 million. The boost was the result of a 50% reduction in sales tax for small-engine cars (<=1.6 litres), a temporary benefit being phased out over the next two years. Total vehicle sales, including buses and commercial trucks, were up 14%, to just over 28 million.
For Mercedes-Benz, 2016 was a particularly good year in China. The luxury brand saw sales jump 27% to just under 473,000 vehicles, on the back of strong demand for its redesigned E-class and flagship S-class sedans, as well as for its V-class MPV. The excellent results allowed the brand to inch closer to its rival BMW, which posted 11% gains to just over 516,000 units.
But, despite its sales figures rising only 3.6%, a third German brand managed to hold on the title of best-selling luxury brand in China. Audi still had a significant lead with sales of 591,500 units. To retain that lead, the VW Group brand is exploring the option to produce Audis with SAIC. It currently co-produces Audis with FAW Group.
Turning from German to Japanese brands, and from the luxury segment to to mid-market, 2016 was an excellent year for Honda, with sales up 24% to 1.25 million, thus overtaking its rival Toyota, which saw an 8.2% increase to 1.2 million units sold. Honda's success was due to strong demand for its compact crossovers. However, both brands were outshone by Nissan, which remains the best-selling Japanese car maker in China, with sales rising 8.4% to 1.35 million vehicles.
The Japanese brands are cautious on growth in 2017, with Toyota expecting flat sales and Honda predicting a slowdown to 7.4%, in line with the slowing economy.
Last year was fairly okay for Volvo, and exceptionally great for Renault. The Sweden-based, Chinese-owned brand increased its sales in China by 11% to just under 91,000 vehicles, thanks to strong demand for the locally-produced XC60 crossover and the S60L sedan. But growth remained under last year's market average of 15%. The company aims to do better in future, and is expanding production in China, also hoping to export from there to the U.S. and elsewhere.
Renault sales were up 82% to 36,500 vehicles, thanks in no small part to production by the joint venture with Dongfeng starting in early 2016 – thus allowing the French manufacturer to avoid the 25% tariff on imports. The Kadjar crossover and the Koleos SUV, both locally produced, made up more than 80% of Renault's sales in China.
Renault is a late to the Chinese party, but plans to make up for the delay: its joint-venture plant with Dongfeng has a capacity of up to 150,000 vehicles a year. Renault aims to increase its dealerships from 150 in 2016 to 200 by the end of this year.
Finally, despite bad publicity for electric mobility, EV sales last year still rose by 53% to nearly 507,000 units. Sales of battery-electric vehicles increased 65% to 409,000 units, while plug-in hybrids rose 17% to 98,000 units.
Specifically for passenger cars, battery-electric sales jumped 75% to 257,000 units, plug-in hybrid sales were up 31% to 79,000 units. For commercial vehicles, battery-electric sales were up 51% to 152,000 units, plug-in hybrid sales increased 19% to 19,000 units.
For this year, EV sales look unlikely to progress strongly, due to the government crackdown on sub-standard manufacturers and a decline in EV sales subsidies by 20%.
The CAAM's 5% growth forecast to 25.7 million for this year is predicated on double-digit growth for sales of crossovers, SUVs and MPVs. Additional to light-vehicle sales, the CAAM predicts bus and commercial truck deliveries to increase 2% to 3.7 million units, bringing the projected total for vehicle sales this year to 29.4 million units. As demand shifts from bigger to smaller cities, the CAAM says the current expansion in auto sales will continue for at least the next five years.
Image: JakeLM, CC BY 2.5
| 17/01/2017 | Frank Jacobs