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China Retail January 2019: Haval (+72.1%), VW (+45.7%), Toyota (+44.1%) lead spectacular market turnaround (+27.5%)

The new VW Tharu hits a record 13.337 retail sales in China in January.

Chinese wholesales data for January (-15.8%) marked a 7th consecutive market drop and third double-digit decline in a row, but this month retail sales is a completely and spectacularly different story. Since February 2018, we offer you a new monthly Chinese update on BSCB focusing on retail sales data, keeping to locally-made vehicles as imports are covered in a separate update. If wholesales correspond to ex-factory shipments, retail sales are those to end customers, taking the marketing edge off the wholesales figures and giving a more realistic account of the reality of the market on the ground. Up until this month, retail sales had depressingly mirrored wholesales month after month, with 5 consecutive double-digit year-on-year declines between August and December, spiralling into -23.2% in November and -24.8% in December. But as suddenly as this slump appeared with the peer-to-peer lending crackdown last July, January retail sales show that we may have already stumbled upon market recovery in China.

Strong Civic sales (+93.9%) help Honda up 40% in January.

According to the China Passenger Car Alliance (CPCA), a consultancy affiliated with the China Automobile Dealers Association, retail sales of new light vehicles dipped just 4% year-on-year in January to 2.183.959 units. In the detail, sedans are actually up 2.2% to 1.072.120, SUVs are down 9.1% to 937.856, MPVs down 11.1% to 151.061 and microvans down 7.9% to 22.922. However our exclusive figures obtained directly from manufacturers show a stunning 27.5% year-on-year gain in January retail sales in China to 2.554.462 units. How can there be such a wild difference between wholesales down 15.8% and retail sales up 27.5% in the exact same month? Two explanations. First, and it’s probably the most significant one, is that January 2018 retail sales were particularly depressed because the purchase tax on vehicles of 1.6L and less had just been raised back up from 7.5% to 10% so a lot of pulled-forward sales occurred in December 2017 which turned out to be the single biggest sales month in Chinese history. Second, from December on carmakers stopped dumping excess inventories on dealerships. As a result average stockpiles at dealerships dropped to a 42-day supply last month from 52 days in December according to Automotive News China. We will have to observe February and March wholesales to confirm this market about-face. It won’t be as clear cut as a sudden return to positive wholesales as dealerships now have to fully absorb the excess inventory they have received from factories over the past 6 months. For this to happen, wholesales may continue to drop significantly for another couple of months before we can see the market return to some kind of normalcy. Also don’t forget the disruptive effect of Lunar New Year celebrations, when the country literally stops from 4 to 10 February this year. Expect another bumpy ride!

Geely introduced the Jiaji MPV in market this month.

Meanwhile the retail brands ranking confirms this sudden return to joy with the Top 8 best-sellers all stunningly outpacing the market. Volkswagen (+45.7%) almost hits 360.000 retail sales this month, helped another month of volume records by its new SUV armada the Tharu (13.337), T-Roc (11.299) and Tayron (7.085) and outstanding scores by the Lavida (+100.1%), Bora (+53.7%), Jetta (+53.3%), Golf (+51.2%), Sagitar (+37.9%), Lamando (+36.7%) and Polo (+32.7%). Honda (+40%) remains in the 2nd spot as the Civic (+93.9%), Fit (+91.9%), CR-V (+82.7%), Crider (+55.7%), Avancier (+40%), Accord (+28.4%) keep galloping ahead and the Inspire (3.442) continues to gear up. Geely (+34.7%) is up two ranks on December to #3, missing out on the #2 brand spot for just 216 units as the new Binyue (14.806) and Binrui (11.933) score new volume records, the Emgrand (+65.9%) gets a second wind, the Vision X3 (+59.3%) and Emgrand GS (+19.4%) get ahead and the Jiaji MPV (148) lands ahead of its wholesales introduction.

It’s a Haval F7 invasion: a record 12.392 retail sales in January.

Toyota (+44.1%) continues to enjoy the effects of a new generation Camry (+118.8%), record volumes by the Highlander (12.674), IZOA (6.256) and C-HR (5.168) as well as strong sales by the Yaris L Sedan (+137.2%), Yaris L (+100.2%) and Levin (+74.8%). Nissan (+39.9%) is lifted by record volumes by the Qashqai (19.481) and outstanding results by the Sylphy (+113.7%) and X-Trail (+21.6%). Haval (+72.1%) is back in the favour of the Chinese public, now logically mirroring clear positive wholesales scores in the past few months as the M6 (17.542), F7 (12.392), F5 (6.604) and H4 (5.294) all beat new volume records and the H6 (+35.4%), H6 Coupe (+42.9%) and H2s (+35.8%) all post fantastic results. Buick (+34.9%) and Hyundai (+37.3%) join the celebrations but Baojun (+0.9%) despite new records by the 360 (15.806) and 530 (14.133) only manages edging up and Changan (+21.5%) is strong but can’t match the market.

Jetour continues on its exceptional run, crossing the 12.000 monthly retail sales mark for its X70 in January.

In a complete turnaround from the past 6 months, instead of a list of debacles it’s the list of high performing brands that is very long indeed this month. Among local carmakers, Hongqi (+893.7%), Qoros (+551.6%), BYD (+95.6%), Lynk & Co (+94.2%), Chery (+79.6%), Roewe (+76%), Borgward (+67%) and GAC Trumpchi (+50.3%) all impress, while among foreigners, it’s Acura (+79%), Infiniti (+73.3%), Kia (+63.5%), Chevrolet (+55.4%) and BMW (+52.2%) that stand out. Jetour (12.767) continues on its dream run, up a huge 53% on December to score its first ever five-digit monthly volume and confirming that outstanding wholesales of its unique model for now, the X70 SUV, do get well and truly absorbed by end customers. Similar story for Bestune (7.375) up 109% on last month with the T77 receiving a red hot welcome by the Chinese public. But some manufacturers haven’t quite caught up with the market upturn just yet, instead continuing to freefall such as Bisu (-81%), Zotye (-65.5%), Renault (-56.4%), Land Rover (-53.1%), Haima (-51.2%), Suzuki (-48.7%), Lifan (-45%), WEY (-42.4%), BAIC (-38%), Ford (-39.6%), Peugeot (-32%) and Jaguar (-30%).

Bestune is also a red hot success with almost 7.500 sales this month.

Looking at the models ranking in separation, the VW Lavida (+100.1%) and Nissan Sylphy (+113.7%) are on top, reproducing the 2018 finish line but astoundingly both more than doubling their retail deliveries vs. January 2018. The Haval H6 (+35.4%) leaps up 4 spots on December to #3, distancing the Wuling Hongguang (+24.3%), VW Jetta (+53.3%), Toyota Corolla (+7.4%) and Buick Excelle Yinlang (+45%). At #8, the Baojun 510 (-20.2%) is the only Top 13 model to post a year-on-year decline. A litany of models break their all-time volume record this month, and other than the aforementioned ones this list includes the Chevrolet Cavalier (+94.6%) at 29.806, Hyundai Elantra Lingdong (+86.4%) at 24.634, Hyundai ix35 (+85.8%) at 21.879, Mercedes E-Class (+30.2%) at 20.163, Kia Sportage (+398%) at 17.088, GAC Trumpchi GS3 (+146.5%) at 11.580, and among recent launches (<12 months) the Audi Q5L (11.477), BMW X3 (11.407), Changan CS35 Plus (11.188), Hyundai La Festa (10.863), Chery Tiggo 8 (7.248), GAC Trumpchi GS5 (7.031), Skoda Kamiq (6.602), WEY VV6 (4.786), Hongqi H5 (4.656), Cadillac XT4 (4.617), Lynk & Co 03 (4.302), BYD Qin Pro (4.273), Chery Arrizo GX (4.198), Dongfeng Fengxing T5 (3.845) and Chevrolet Orlando (3.688).

Previous post: China retail Full Year 2018: Toyota stands out, VW Lavida, Nissan Sylphy and Toyota Corolla best-sellers

Previous month: China retail December 2018: Honda (+21%), Toyota (+27%) impress in market down 24.8% or 830.000 units year-on-year

Full January 2019 Top 96 All-brands and Top 653 All-models below.

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