Foreign and domestic automakers enjoy strong SUV sales growth
Lincoln Navigator to hit China Image: James |
Sports Utility Vehicles and minivans have driven auto growth in the first two months of 2015 as retail deliveries of passenger vehicles reached 3.49m units. SUV and minivan sales rose 66% and 20% respectively in January and February, according to the China Association of Automobile Manufacturers.
Both foreign and domestic automakers are clamouring for their share of the lucrative SUV and MPV market. Honda will unveil its new concept SUV tailored to Chinese buyers at the Shanghai Auto Show in April. The vehicle will likely be roomier than those produced for its home market and will also be fitted with its FUNTEC powertrain and infotainment technologies.
Lincoln is also trying to increase sales by bringing its iconic Navigator to the Chinese market. The SUV, a favourite of hip hop stars and footballers like David Beckham, will go on sale in the market this year for around 1m yuan ($160,000). The Navigator is Lincoln's flagship SUV and a core part of Ford Motor Co's offering.
Even luxury German brands like Audi, Porsche and Mercedes are vying for the market with a series of SUVs that cater to Chinese tastes.
However, domestic manufacturers could be the unlikely winners in the competition for China's growing SUV market. A 2013 survey from consultancy IHS Automotive found just one Chinese SUV ranked in the country's top ten favourite. In the first three months of this year, eight had made it onto the top ten list.
While government policies to boost auto sales have failed to boost growth across other auto classes, companies like Geely, BYD and Great Wall have made significant strides in technology. Chinese SUVs benefit from looking the part but coming with a significantly lower price tag than their foreign rivals.
Sedan sales at Great Wall fell 57% in 2014, althought sales of the Haval, which is based on a sedan frame, surged. At 99,800 yuan ($16,000 the Haval competes with the Navigator on looks and comes at one tenth of the price.
Though the Beckhams are unlikely to pick up a Haval anytime soon, domestic producers stand to benefit greatly from leveraging their price to looks SUV advantage.