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China August 2018: P2P lending crackdown triggers 2nd decline in a row

Chinese brand Bisu (-79%) had focused solely on SUVs and is now paying the price dearly.

* See the Top 80 All China-made brands and Top 450 models by clicking on the title *

Wholesales data released by the China Association of Automobile Manufacturers (CAAM) shows a second year-on-year decline in a row for the Chinese new light vehicle market in August at -4.6% to 1.789.900 units. As a reminder, these are ex-factory sales to dealerships as opposed to retail sales that are direct to consumer and will be reported in a separate update. Once again, SUV sales are weak at -4.7% to 737.600 units but recover somewhat after dropping 8.2% in July. Sedans are down 3.4% to 901.100, MPVs sink 14% to 119.300 and microvans are up 5.1% to a still tiny 31.900 units. We have now identified the reason behind this sudden and unexpected market slump: a government crackdown on P2P digital lending platforms following a wave of lender scams and borrower defaults.

The new generations Tang (pictured) and Qin lift BYD up 46% in August.

These P2P platforms are used by a younger audience to finance their car purchase to the extent of 10-15% of total car sales and explains a very targeted market slump towards Chinese-branded SUVs in particular, a category of vehicles favoured by younger Chinese. As a result Chinese brands, many of which have been solely focusing on SUVs in the past few years, are struggling: down 11% in August after sinking 6.1% in July whereas foreign carmakers are stable. More on the P2P lending impact on the 2018 Chinese car market here. However a strong start of the year means the YTD volume remains at record heights after 8 months, up 2.6% to 15.2 million light vehicles. Meanwhile, commercial vehicles gain 1.1% to 313.000 units and are up 8.7% YTD To 2.903.300 units. This means the overall Chinese new vehicle market is down a more modest 3.8% to 2.102.900 units and the YTD volume gallops up 3.5% to a record 18.1 million units. Once again the most dynamic segment of the Chinese market is electric and plug-in hybrid vehicles, up 50% to 101.000 units with EVs up 32% to 73.000 and PHEVs up 131% to 28.000. Year-to-date, EV sales soar 72% to 447.000 while PHEVs surge 160% to 154.000, bringing the category up 88% to 601.000.

Geely snaps a 29th consecutive month for double-digit year-on-year gains.

Volkswagen (-2%) remains comfortably in the lead of the China-made brands ranking but posts its first year-on-year wholesales decline in the past 5 months, a trend we predicted because the brand’s retail sales have been in negative for the past two months, and wholesales are bound to catch up at some point: declining retail sales to consumers mean higher dealer stock and lower orders the following months. Geely (+18%) climbs back to the 2nd place overall for the first time since last April and the 8th time in the past 11 months, managing an incredible 29th consecutive month of double-digit year-on-year gains and a full 12 months in a row above 100.000 monthly sales. Geely edges past Toyota (+15%) for just 568 wholesales, with the Japanese manufacturer scoring one of only two double-digit gains in the Top 6. Honda (-15%) takes a hit but post a 20th month in the past 25 above 100.000 sales. Nissan (+7%) is also solid but Buick (-12%) endures a fourth consecutive double-digit decline. Hyundai (+14%) confirms its recovery, rallying back up 11 spots on July to #7, with Audi (+20%) and Chevrolet (+12%) also very strong at the tail end of the Top 10. In contrast, Changan (-29%), Baojun (-26%) and Haval (-23%) are all hit full frontal by the SUV slump.

The ix35 is up 11-fold on August 2017, helping Hyundai up 14%.

In the remainder of the Top 20 China-made brands, BYD (+46%) now is in full swing thanks to the launch of new generations for the Tang SUV (+1068%) and Qin sedan (+102%) and the continued success of its new best-seller the Song MAX (#55). BMW (+30%) is lifted by strong sales of the 5 Series L (+67%) and new X3 (#125) and Chery (+49%) surfs on the success of the new Tiggo 8 (#79) hitting a new volume record at 7.187, the eQ micro-EV (+105%) and the new Tiggo 5x. The most impressive gains further down are almost uniquely Chinese with Qoros (+308%), MG (+102%), Yema (+80%), Hawtai (+70%), JAC (+53%), WEY (+41%) and SWM (+35%) among the most dynamic while among foreigners only Mitsubishi (+36%) and Jaguar (+23%) stand out.

Despite the arrival of the V7, Briliance sinks 47% due to an over-reliance on SUVs.

This month the four most popular brands launched in the past year all break their volume record, starting with Lynk & Co at 13.674, frankly outselling archenemy WEY (10.174) for the 2nd month running, Traum up to 1.990 thanks to the arrival of the SEEK 5 (see our upcoming August focus on the all-new models), COS scoring its first four-digit figure at 1.007 and Yudo up to 777. We also welcome YGM/Link Tour at #76 (more on this new carmaker in our Exclusive to all 175 Chinese brands). In contrast, some Chinese carmakers that had put all their eggs in the same SUV basket suffer greatly such as Bisu (-79%), Landwind (-79%), Lifan (-60%), Soueast (-57%), Changhe (-56%), Foton (-48%), Brilliance (-47%), Venucia (-43%), Dongfeng (-42%), Leopaard (-42%), Zotye (-42%), BAIC (-37%), FAW (-37%) or Jinbei (-37%). Some foreigners also have a terrible month, such as Ford (-65%), Suzuki (-63%), Peugeot (-57%), Land Rover (-53%), Acura (-51%), Renault (-42%), Jeep (-33%) or Citroen (-28%).

After only three months in market, the VW T-Roc already flirts with the 10.000 monthly wholesales.

Over in the models ranking, sedans confirm their return to grace by monopolising the Top 5 for the second time in the past 3 months: the VW Lavida (-1%) is the outright best-seller for the 5th consecutive month, cementing its YTD domination ahead of the Nissan Sylphy (+11%) now also #2 YTD, the VW Jetta (+14%), Toyota Corolla (+0.02%) and VW Sagitar (-1%). The Buick Excelle GT (-43%) and Geely Emgrand (+9%) make it 7 sedans in the August Top 10. The Haval H6 (-31%) remains the most popular SUV despite a 4th consecutive double-digit gain, the Wuling Hongguang (-33%) climbs back up 5 spots on July to #8 but continues to freefall just as the VW Tiguan (-23%) post a very disappointing score that may have a lot to do with the smashing success of the VW T-Roc, up 108% and 32 spots on July to 9.660 sales.

The 02 pushes Lynk & Co towards a new monthly volume record at 13.674.

Once again sedans post the majority of the largest gains in the remainder of the Top 50 with the Hyundai Elantra Lingdong (+139%), Chevrolet Sail (+126%), Toyota Camry (+108%), BMW 5 Series L (+67%), Audi A4L (+55%), Honda Accord, Civic and Fit (all at +32%), VW Magotan (+29%) and Chevrolet Cavalier (+28%). The sole SUVs standing out are the Hyundai ix35 (+1048%) and Audi Q5 (+21%). Below, notice the Geely Vision X3 (+2806%), BYD Tang (+1068%) breaking the nameplate’s volume record at 10.048 thanks to the 2nd generation, the Hyundai Celesta (+191%), Kia Sportage (+181%) and Hyundai ix25 (+102%). The GAC Trumpchi GS3 (8.650) also breaks its volume record this month.

The Toyota C-HR now outsells its twin the IZOA.

The Baojun 360 is up 22% on July to break its volume record at 15.391 wholesales, becoming the most popular recent launch (<12 months) at #26 ahead of the Baojun 530 at #48, the BYD Song MAX at #55, VW T-Roc at #63, Lynk & Co 01 at #67 (new record at 9.303), Chery Tiggo 8 at #79 and Skoda Kamiq at #87 (new record at 5.794). The Geely Vision S1 (#105), WEY VV5 (#106) and Geely Emgrand GE (#114) complete the Top 10 best-selling recent launches, making it an astounding 8 Chinese nameplates and 7 SUVs vs. 2 MPVs and one EV sedan. As far as models launched last month, the Lynk & Co 02 (+44%) remains in the lead at #117, but the most impressive surge is delivered by the Toyota C-HR (+2387%) at 3.756 sales #137), now outselling its twin the Toyota IZOA (+45%) at #142. The C-HR/IZOA tandem is already up to 7.434 wholesales in August vs. 25.259 for its archenemy the Honda Vezel/XR-V. The SWM G01 (+53%) impresses and slots in-between at #141, while the Kia Stonic (+259%) is also gearing up nicely at #163.

Previous month: China July 2018: Deepening SUV crisis pulls entire market down 5.3%

One year ago: China August 2017: Chinese SUVs near 60% segment share, market up 4.1%

Full August 2018 Top 80 All China-made brands and Top 450 models below.

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