[Rajeevraj]

This is the latest in the series of looking at the Car Sales in key international markets. It initially started with the US Car Sales Analysis which made us go green with envy, followed up by a quick look at the European, Australian and Russian Markets. Then we looked at the Pakistan Sales and state of the Industry and that kind of made us feel happy our position.

The US, Europe, Australia, Russia are all bigger countries with much lower population than India. Countries like Pakistan, though densely populated are much smaller than India. So what happens when you look at the automotive industry of a country that is bigger than India and also more heavily populated? Well, there is only one such country-China (Thanks to GTO for seeding this thought). If US and Europe were mind boggling from a numbers perspective, then not sure what word to use for China.

Some History

• In the early 1980’s countries like China, India and Pakistan were in a very similar situation. As late as 1985, the country produced a total of only 5,200 cars.
• As domestic production was very limited, import totals rose dramatically, despite a 260 per cent import duty on foreign vehicles In 1984, Japan's vehicle exports to China increased sevenfold (from 10,800 to 85,000) and by mid-1985 China had become Japan's second biggest export market after the US. The country spent some $3 billion to import more than 350,000 vehicles (including 106,000 cars and 111,000 trucks) in 1985 alone.
• Post this, there was an aggressive push towards setting up local manufacturing and there were JV's set up with Global Brands like VW and GM.
• China surpassed Japan to become the world's second-largest vehicle market in 2006, and passed the United States to become the largest in 2009

Some Numbers

• China now churns out more new cars than the United States and Japan combined, Last year, China’s automotive industry produced almost 24 million vehicles – more than double its output in 2009, when the country became the world’s largest auto manufacturer following the global financial crisis.
• There is a big domestic market for those cars. China currently has just over 100 vehicles for every 1000 people, lagging well behind the global average of 200 and miles off Japan, 600, and the US, almost 800 (Note: Still way ahead of India where it is 20-30/1000 people).
• The number of passenger vehicles sold in October totaled 1.94 million units(~20 Lakh), surging nearly 11 percent year-on-year. Reminder: US Monthly Sales for October 2015 is ~1.5 million units (15 Lakh), India is 220,000 and Pakistan is 15,000

India vs China- A quick look at the pace of growth-Last 10 years

• This is an interesting comparison. In 2005 the average monthly India Car Sales was roughly 80,000-100,000 units and China Sales were ~250,000 units. So roughly 2.5-3 times.
• Fast forward to 2015. India monthly average is ~225000 units and China has grown to ~2 million units.
• So the India monthly average sales has grown 2.5-3 times in the last 10 years while China has grown an astounding 9-10 times. Majority of this growth has come after 2009-10.

With that sobering thought, here is a summary of the China monthly sales in 2015. As is obvious, the numbers have been fluctuating a lot and was in a downward trend since April, with only slow signs of growth post July. So what did they do? Simple, in late September, the central government issued a measure that halves the tax on purchases of passenger vehicles with engines that are 1.6 liters or smaller effective October 1st. Immediately there was a huge surge in sales. Statistics show that 1.33 million vehicles with such engines were sold in October, a 16.3-percent growth from September, accounting for 69 percent of all passenger vehicles sold that month.

Next obvious question. Who are the manufacturers who sell all these cars monthly? There must be a lot of manufacturers to enable sales of 2 million a month. A quick look below:

• There are a huge number of Chinese Manufacturers which manufacture and sell their own cars.
• The big ones have joint ventures with the worlds top manufacturers and sell the International brands along with their own brands.
• In the year 2000 pretty much there was 0 manufacturing in China.
• By 2014 International models made up ~52% of the market. The charts below show the market share of GM, VW, Ford and how their Manufacturing has really ramped up
  • Six of the ten manufacturers produce 20% and more of their total production in China, in particular GM and VOLKSWAGEN with a proportion of more than one third.
  • So GM and VW shifted more than one third of their total production to China by 2014. In 2000 just 0.4% of the GM cars and six percent of the VW cars were produced there.
  • The auto production of PSA occurs to one quarter in China. In the year 2000 only 2% of the PSA vehicle was manufactured there.
  • Nissan assembles almost one fifth of its vehicles in China. In the year 2000 this value stood at zero.
  • Ford, shifted 15% of its total production to China.

Market Share of the Top 10- Worldwide, in China and change in production from 2000



Market Share of the Top 10 Chinese Manufacturers



Chart that shows how the share of the pie is changing

Next: A look at the Top Selling Vehicles in October 2015. Actually the list in the source link is for the Top 100, shortening it to Top 25 here

Top 25 Sedans



Top 20 MUVs



Top 25 SUVs



Here is a look at the Consolidated Top 10 Sellers in 2014



Manufacturer Level Sales-2014

• The sheer number of vehicles is amazing. The Top Seller list for the Sedan was actually the Top 100.
• The sales pattern is very different from India. The Top Seller by a long way is an MUV with a bunch of Sedans and SUV's following close behind.
• Unlike India, where Maruti dominates, the CHinese Market is more evenly split. Global Biggies VW, GM and Toyota lead the Market Share.
• Suzuki's market share unlike India is minuscule in China.
• While the Sedan list is mostly made up of brands from the Global Giants, the MUV and SUV space has a lot of the local vehicles in the top seller list.

[Rajeevraj]

A quick look at the profile of the Top Sellers

Wuling Hoangguang

• Looks familiar? Don't let the name confuse you. This is nothing but the Chevrolet Enjoy sold in India.
• The Dzire/Alto of the Chinese Market from Sales perspective. Sells double the nearest competitor.
• POwered by 1.2/1.4L Petrol Engines, 5 speedMT
• Price Ranges from 44,000-60,000 Yuan (INR 4.5L to 6L)
• Equipment levels similar to Indian Standards. Safety features restricted to Top Variants.
• Trivia: In October 2015 GM sold ~400 Enjoy's in India

Nissan Sylphy

• Known as the Nissan Sentra in most markets
• The 2nd largest selling car in 2015.
• Powered by 1.6 and 2.0 Engines. Both MT and AT.
• Price Ranges from 134,000 to 167,000 Yuan
• Well Loaded Safety wise. Most variants get 6 Airbags and the other safety goodies.

VW Lavida

• A China specific VW Car.
• Seems to be a mix of the Vento and Jetta
• Comes with the 1.4 TSI MT and DSG as well as a 1.6 NA with MT and 6 Speed AT
• Prices Range from 130,000 Yuan to 170,000 Yuan

Haval H6

• China's top selling SUV
• Said to be an imitator of the 3rd Gen Honda CRV
• 2.0L Petrol and Diesel Engines. Only MT.
• Price Ranges from 96,000-141,000 Yuan

Overall it was quite an Eye-Opener Analysis. Hope the information presented here will help provide a good insight into the largest automobile market in the world.

Sources:

• ChinaAutoWeb
• QuestTrendMagazine
• Wikipedia
• TradingEconomics

[Aditya]

Thread moved from the Assembly Line to The International Automotive Scene. Thanks for sharing!

[rajeev k]

It is quite interesting to note the following points,
1. The Wuling Hoangguang which is our Chevrolet Enjoy sold more than 67K in October 2015, whereas the Enjoy is struggling. So the reason could be the Company than the Car.
2. The Haval H6, a clone of Honda CRV is China's top selling SUV.

[GTO]

Remarkable market, RESPECT!

China's volumes have actually beaten USA at some points in the last decade, becoming the world no. 1.

Some more interesting facts.

- A majority of Chinese customers buy their cars in cash (I believe it's like 80% or so). In India however, about 70% of cars are financed.

- So many Chinese brands that have good volume, unlike India where its only Mahindra & Tata (with the latter being particularly weak in passenger cars).

- China is perhaps the only market where Buick is a revered brand enjoying healthy sales. No one else likes Buick, not even American customers.

- VW is incredibly strong in China, along with GM. China is the most important part of their global strategy.

- A rare market where there is only one Japanese car in the Top 10 .

- It's big bucks for luxury car makers. I believe Rolls Royce once said that they sell more cars in China than anywhere else. Just look at Audi's sales - over 5 lakh cars in 2014 . In India, Audi sells merely 10,000!

[captain.torque]

The Chinese car market appears to be only about numbers. Bigger than US and Japan, producing the most cars blah blah but to be honest, it lacks the 'wow' factor.

Most of the locally produced cars are boring and bland despite being "inspired" by top sellers from around the world.

I mean look at their best selling SUV Haval H6. DO you think such an old looking design will achieve success in India?

I would never like to ride a car whose design is a copy of some other car. That's cheap.

Or take the Lavida, it looks like a car from the 90's.

At the risk of being labelled envious, I would say that Indian car market is much more diverse with better looking cars.

[peterjim13]

Wow !! Had no idea of the scenario. A market totally on its own, if you gotta sell in China, make something based on what they want. No world car scenario right ?

Why arent the Indian manufacturers like Mahindra/Tata/Bajaj not selling in China.
I think the commercial vehicles and the SUVs should sell well there. Like the XUV /Scorpio etc

I remember reading about a Chinese Copy of Bajaj Pulsar in LATAM. (AMICO was the manufacturer)

[PrideRed]

Sales number aside, we Indian's have definitely a better taste. Look at their top selling cars, Ugly. How did VW manage to mess up the looks of Vento/Jetta mashup? Also looks like VW uses China a dumping ground to sell all their age old models!

A good read i found on VW naming convention and models they sell in China!

http://jalopnik.com/5968612/volkswag...*ing-confusing

[i74js]

Selling in China needs careful planning, its not one man show the way it is in India where MSIL is leading the way and everyone else has to look for opportunities as a follower. China is quite evenly distributed with atleast 5 major players at the top position.

In addition to this, sole production in China is not possible and one has to look for partners. All good / large national players are already tied up. Entry of an Indian player without the sheer muscle power of a local Chinese partner will be a recipe for disaster.

The Indian market is not generating that much of surplus for M & M that it will enter into already crowded Chinese market. Tatas are already running in losses (Indian operations) and thus they are better off working here for revival where in they have political standing as well as operational infrastructure (the Sanad facility is operating at less than 20%).

Indian players will not touch China atleast in near future.

[Latheesh]

Originally Posted by captain.torque

At the risk of being labelled envious, I would say that Indian car market is much more diverse with better looking cars.

And our top selling cars are Dzire, Alto, and WagonR

[coolvenk]

Originally Posted by GTO

Remarkable market, RESPECT!

- A rare market where there is only one Japanese car in the Top 10 .

I am told the Chinese hold a grudge towards the Japanese due to the latter's atrocities during the World War II. A Chinese friend once swore to me that he would never buy a Japanese car and many in his country shared this view.

[naveen.raju]

Amazing statistics. I expected something similar because I had a chance to visit China and was shocked to see the number of luxury cars especially the Audi A6. Audi introduced the A6L specifically for the chinese market. As GTO said, China is Rolls Royce's biggest market. VW isnt bad either. Too many passats, scirocco, tiguan, santana etc.

To give some idea, here's their Chinese portfolio.

[Ironhood]

Originally Posted by captain.torque

The Chinese car market appears to be only about numbers. Bigger than US and Japan, producing the most cars blah blah but to be honest, it lacks the 'wow' factor.

Most of the locally produced cars are boring and bland despite being "inspired" by top sellers from around the world.

I would never like to ride a car whose design is a copy of some other car. That's cheap.

At the risk of being labelled envious, I would say that Indian car market is much more diverse with better looking cars.

Its difficult to agree on this (just my thoughts, nothing personal). China is an emerging economy just like India. Most Indians buy cars looking at FE and ownership costs and not the WOW factor, or at least that's what shows in the Indian car sales figures. So if we think WOW factor is missing in the Chinese car market, its the same at home.

If the Chinese cars are boring, I believe, the Indian best sellers are not very interesting either; in terms of safety, practicality, looks (to me).

How can we call the Indian market much more diverse than the Chinese when 40+% market is capitalized by Maruti, selling us Altos and Dzires? And looks, we are the ones running behind sub 4 meters (wannabe sedans), COMPACT SUVs (wannabe SUVs). Not that they cannot be designed well, but not many of these are even proportionately put together.

I think, if they are doing well, they are doing well. We are way behind, and looking at the current situation, this may remain for a few years to come.

[captain.torque]

Originally Posted by Latheesh

And our top selling cars are Dzire, Alto, and WagonR

My friend, again you are talking about numbers. The top selling car in any country will depend on the economic prowess of its people.

A majority of Alto owners buy the car because they can't afford anything else, That doesn't mean they LOVE the car.

Moreover, I would any day prefer a Dzire over a cheap looking imitation of some other car.

Originally Posted by Ironhood

If the Chinese cars are boring, I believe, the Indian best sellers are not very interesting either; in terms of safety, practicality, looks (to me).

How can we call the Indian market much more diverse than the Chinese when 40+% market is capitalized by Maruti, selling us Altos and Dzires? And looks, we are the ones running behind sub 4 meters (wannabe sedans), COMPACT SUVs (wannabe SUVs). Not that they cannot be designed well, but not many of these are even proportionately put together.

See, what I only want to say is that if Tata or Mahindra start copying cars made by others and launch them here, will they work? NEVER.

In fact, I am proud that Indian car makers are working hard of creating their original designs no matter even if some of them are ugly read Xylo.

And just because our Market is dominated by Maruti doesn't mean that they are only selling Altos and Dzires here. They have a huge line-up of cars at different price points to choose from.

[saion666]

Originally Posted by captain.torque

The Chinese car market appears to be only about numbers. Bigger than US and Japan, producing the most cars blah blah but to be honest, it lacks the 'wow' factor.

Most of the locally produced cars are boring and bland despite being "inspired" by top sellers from around the world.

Precisely my thoughts as I was googling the images of the cars in top seller lists and was thinking whats so "WOW" about this and was happy to see someone pointing it out.
But my friend lets call a spade a spade it was our Indian heart that made us think so ,the brain says the Chinese market is lot more mature/larger than us.

Just look at the number of "Sedans" they sell compared to the tin cans which are sold here as "hatchbacks".

Originally Posted by captain.torque

And just because our Market is dominated by Maruti doesn't mean that they are only selling Altos and Dzires here. They have a huge line-up of cars at different price points to choose from

So do they, just look at the cars on offer by VW. Nissan and Honda also has many cars on offer, it's just that they didnt make to the top seller list (where the no-10 Cruze from 2014 sells more than all cars sold in India in a month )