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Customer LoginsSame-Day Analysis: SAIC sales decline 6.67% in China during February, GM's drop 9.3%, Hyundai's fall 30%, others report decreases
Chinese-brand SUVs continue to bring sales growth for local automakers, including SAIC. Growth is not shared across the market, though, as some international automakers have reported sales declines in China in February.
IHS Automotive Perspective
- Significance: The dynamics of the Chinese vehicle market appear to be shifting, with sales growth anticipated for local brands, particularly in the SUV segments, while certain commercial vehicle segments are also reportedly making a comeback.
- Implications: A number of international automakers have reported slower sales in China in February, although they attribute this to the month of the post-New Year lull in sales.
- Outlook: IHS Automotive has issued a cautious forecast for passenger vehicle sales in China in 2016, as overall growth is likely to be evident only for certain players in the market.
Automakers have begun reporting monthly sales for February and a grim picture is emerging. IHS Automotive has issued a cautious forecast for passenger vehicle sales in China in 2016, as overall growth is likely to be evident only for certain players in the market. The dynamics of the Chinese vehicle market appear to be shifting, with sales growth anticipated for local brands, while a number of international automakers have reported slower sales in China in February.
SAIC Group, the largest automaker in China, which has joint ventures (JVs) with General Motors (GM) and Volkswagen (VW), has sold a total of 411,990 vehicles in February, marking a drop of 6.67% year on year (y/y) from 441,444 units sold in the corresponding month of 2015. What has significantly contributed to the drop is that both SAIC's JVs with VW and GM have reported declines in monthly sales.
Shanghai Volkswagen (SVW) has sold a total of 137,292 units in February, down 14.76% y/y and pulling down its year-to-date (YTD) sales into negative territory. SVW's total sales in January−February are down 5.77% y/y to 345,569 units.
Shanghai General Motors' (SGM) sales in February hit 102,408 units, down 11.24% y/y, also pulling down YTD sales. In the first two months of the year, SGM has sold 275,481 units, down 1.1% y/y.
Meanwhile, the three-way SAIC-GM-Wuling (SGMW) joint venture's sales are up, but only marginally to 151,095 units, an increase of just 0.69%. On a YTD basis, SGMW's sales are still in positive territory, increasing 9.09% y/y.
However, conversely, SAIC Passenger Vehicle Company, the branch of the automaker that makes and sells the Roewe and MG brands, has reported a hefty rise in sales. In February, sales hit just 2,758 units, but this corresponds to an 83.5% y/y increase, pulling up the YTD figure to 6,488 units, up 55.25% y/y.
In addition, what looks like a silver lining for SAIC Group is sales of commercial vehicles under SAIC and its JV with Iveco, which have risen in February.
SAIC Sunwin Bus Company has sold a total 66 units in the month, up 57% y/y, with YTD sales of 302 units, marking a solid 123.7% y/y increase. Meanwhile, SAIC-IVECO-Hongyan Commercial Vehicle Company has sold 707 units in February, up 75.8% y/y, while YTD sales have risen 26.21% y/y to 11,101 units. Other SAIC commercial vehicle (CV) companies have also reported growth.
General Motors (GM) has reported total monthly sales of 245,690 units in China in February, marking a decline of 9.3% year on year (y/y). On a YTD basis, however, GM is still marginally in positive territory, with retail sales in the first two months of 666,713 units, up 0.5% y/y. This includes sales of models produced under its joint ventures and imported vehicles. "This year we will continue to improve our product mix to meet the fast-changing customer demand," said GM executive vice-president and GM China president Matt Tsien. "We are on track to execute our product launch plans. New models, including the Cadillac CT6 and Chevrolet Malibu XL, are expected to add to our growth momentum."
Buick sales in February have increased by double-digit rates; however, Chevrolet sales pulled down the overall positive momentum. In February, GM's mainstay Buick brand sold a total of 70,764 units, up 16% y/y. However, sales of both Cadillac and Chevrolet declined. Cadillac sales dropped 16% y/y to 4,766 units in the month, while Chevrolet sales plummeted 48% y/y to 27,349 units.
Meanwhile, the Baojun brand continued to witness growth, with sales up 52% y/y to 39,348 units in February, while the Wuling brand sold a total of 103,438 units, down 18% y/y.
South Korean automaker Hyundai Motor has reported dismal sales in February, with total sales of 53,326 units in the month, down 28% y/y, reports Yonhap News Agency. This marks the second month of declines for Hyundai, which witnessed a 27.2% y/y drop in January. Hyundai's YTD sales in the first two months are down 27.6% y/y to 128,462 units in China.
Japanese automaker Mazda Motor sold a total of 12,901 units in February in China, marking a decline of 19.3% y/y. In the first two months of 2016, Mazda has reported total sales of 38,855 units in China, marking an annual decline of 4.1% y/y.
Other Japanese automakers have also reported slower February sales. Nissan has reported a 13% y/y sales decline in February, while Honda has reported a 7.7% y/y decline and Toyota has reported growth of 6.3%, but this is considerably lower than growth rates witnessed in the preceding month.
Outlook and implications
Overall, international brands are witnessing an increase in competition from local players in China and the threat to their market share is now gaining momentum, as both SVW and SGM reportedly have witnessed annual declines in sales in the month, pulling down their YTD sales. Although GM's data show that the Buick brand is doing better, with sales up 16% y/y, mainly on the back of strong growth for the Envision SUV, the automaker will have to push new models under the Chevrolet brand to counter the heavy double-digit rates of decline.
The Baojun brand, sold and produced by the SGMW joint venture, is faring well, mainly on the strength of the Baojun 560 sport utility vehicle (SUV), as well as the Baojun 730 multipurpose vehicle. SAIC's in-house brands' sales have also witnessed an increase in sales, continuing to highlight the trend that local brands are gaining momentum in China. Growth is expected to have come from the MG GS sport utility vehicle.
Apart from the growth of local brands in the passenger vehicle SUV segment, the biggest turnaround could stem from growth in the CV segment in China. Preliminary data from the industry point towards positive rates of growth in heavy truck sales in China in February, marking the first increases in 18 months. Preliminary data state that a total of 32,000 heavy trucks were sold in China, up 16% y/y, Dow Jones reports. Heavy trucks are one component of the CV segment.
IHS Automotive has issued a cautious 5% sales growth rate for 2016, as growth is unlikely to be shared across all in the industry.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.