Market Insight: Chinese brands in positive sales territory

Price and perceived value for money have strengthened sales of the four brands of Chinese manufacturers on sale in Australia as each reports higher sales than a year ago despite sluggish results from their rivals.

In fact, Great Wall Motors, Haval, LDV and MG are each up on both year-to-date and year-on-year performance, and of the four, only Great Wall slipped for sales in the month of August with a negative 1.5 per cent result compared with the previous month.

In perspective, only three other brands – Jeep, Lamborghini and McLaren – posted rises in August while year-to-date, there were five non-Chinese brands including SsangYong (up 174.2 per cent); Ram (up 34%); Genesis (up 25.3%); Mercedes-Benz Vans (up 5.3%); and Aston Martin, which lifted by 1.4 per cent.

Most of the reasoning is the consumer flow to personal transport due to the Covid-19 virus causing the need for social distancing. This trend has also triggered substantial increases in used-car sales and prices.

Those consumers who either didn’t want a used car or failed to see value, moved to budget-priced new cars which – in the main – have been led by Chinese brands.

LDV Automotive general manager Dinesh Chinnappa told GoAutoNews that consumers are looking for value for money.

“If they don’t want a used car, there’s a lot of value in an LDV,” he said.

“I think buyers have, in these times, become more practical about choosing a car and more pragmatic about costs.”

Mr Chinnappa said LDV, like other commercial vehicle brands, was also buoyed by the instant asset write-off offered by the Australian Taxation Office last financial year.

“LDV also has a strong dealer network and the vehicles have become quite visible on the roads,” he said, adding that LDV recently sold its 20,000th vehicle in Australia since launching in 2014.

“That helps to reinforce that LDV has been here for a while and has become part of the Australian landscape.”

He said that price is another factor. The LDV dual-cab T60 4x4 diesel ute is priced from $30,516 driveaway through to $39,989. The Ford Ranger 4x4 dual-cab starts at $48,690 plus on-road costs while the Toyota HiLux is from $47,515 plus costs.

The LDV D90 SUV range starts at $35,990 driveaway, compared with the Mazda CX-8 from $39,910 plus costs and the Toyota Kluger from $44,850 plus costs.

The LDV T60 dual-cab ute repeated the rise shown in other Chinese models with an 18.1 per cent increase year-to-date and 2676 sales for a 2.8 per cent market share.

In the large SUV segment, the LDV D90 has sold 1660 units this year to the end of August for a 150.4 per cent increase over the same period in 2019. It now has a market share of 2.9 per cent in that segment.

The light-commercial sector has LDV’s two vans showing sales increases for August but down around 12 per cent on year-to-date figures. LDV sold 777 of its G10 vans this year for a 6.9 per cent share, while the V80 sold 316 units for 2.8 per cent market share.

Haval also includes driveaway pricing and has its SUV range from $22,990 (H2), $29,990 (H6) and $41,990 (H9), while sister company Great Wall sells its 4x2 utes from $17,990 driveaway and its 4x4 versions from $19,990.

The Haval H2 sold 1174 units to the end of August, up 136.7 per cent for a 2.0 per cent market share. In August, it sold 135 H2s.

The mid-size SUV segment had the Haval H6 with 474 sales this year and 79 in August, well down on its rivals led by the RAV4 (24,678 units sold to date) and X-Trail (8893 sales).

Compared with the same period in 2019, however, H6 sales were up 80.9 per cent and, for the month of August, up 97.5 per cent. In the large SUV sector, the Haval H8 has been discontinued and its successor, the H9, has a 5.7 per cent year-to-date rise with 203 sales.

Great Wall has two players in the light-commercial sector, the Steed 4x2 and 4x4 utes. It has a respectable 4.4 per cent share in the 4x2 ute segment with 734 sales this year, up 32.3 per cent on the previous corresponding period.

The 4x2 sector has a relatively small number of rivals compared with the highly competitive 4x4 bracket where Great Wall is still up 6.8 per cent with a modest 375 sales.

The promise of a low-cost small hatch with a long warranty is pushing MG sales and now with Toyota announcing higher prices for Yaris, the MG3 may have clean air ahead to boost its market penetration.

MG Motor director of marketing and product development Danny Lenartic said the huge success of MG was attributed to factors including the brand being an attractive value proposition, particularly up against the used-car market as consumers turned to personal transport.

Mr Lenartic said Australia was one of the fastest countries to adapt to new ideas and technology and this was certainly the case with adapting to vehicles from China.

“Building trust is absolutely vital when introducing a new brand,” he said.

“The only thing we needed to overcome – and this applies to every brand at some point – is continuing to build trust to then gain(a) mass volume position.

“We knew we had to be strong in customer service and aftersales and that’s why we introduced a seven-year warranty. It was originally a six-year warranty but we wanted to keep up with the best.

“The warranty meant we could show Australia that we have faith in our products.

“When it comes to features, benefits and value, MG has a strong message in its ZS, MG3, the HS and the EV that’s coming next quarter.”

Mr Lenartic said MG made a $21,990 price decision with the ZS recently “because we wanted to offer another safe choice at an accessible price point in the current circumstances.

“We adapted to the market. We didn’t chase volume but looked at what the buyer wanted in a car without sacrificing anything in terms of comfort and features and particularly safety.

“That campaign has done extremely well in the market and helped us further gain trust with consumers.”

MG’s light hatch, the MG3, is the star in the small car segment with a 26.7 per cent share in August, selling 654 units against the second-placed Kia Rio with 445 sales and an 18.2 per cent slice of the pie.

In year-to-date figures, the MG3 has a 17.9 per cent share with 4138 sales, ahead of the Toyota Yaris with 3624 sales to the end of August for a 15.7 per cent share.

The more popular MG ZS had a 4.0 per cent share of the small SUV segment with 2348 units sold this year to date and 317 finding owners in August. Though commendable, this was down 0.3 per cent on the same period last year.

The new MG HS, replacing the GS, had 246 sales in August and 1587 this year. MG is now preparing to launch its EV model later this year.