Market Insight: Upward march for Chinese brands

SALES of Chinese-built vehicles in Australia last year surged 71.2 per cent to an all-time high of 17,913 units, easily surpassing the previous record of 12,139 set in 2012 as the four dominant brands – MG, LDV, Great Wall and Haval – recorded strong growth in defiance of the general market downturn.

More of the same is expected this year, as demonstrated by the January sales results released last week, although the coronavirus crisis could throw a spanner in the works for not only the Chinese brands but a variety of global car-makers that depend on Chinese parts supply.

Every single automotive brand also depends on consumer and business confidence, which has been tracking downwards in Australia in the current climate and could take a further hit as this new epidemic deepens.

But this is a good news story, with MG leading the way for the Chinese collective last year with an impressive 8326 sales – up 176.9 per cent on the 3007 units its posted in 2018 and the 600 it managed in 2017, which was its first full year back in business here after relaunching in October 2016.

Cutting to the chase, this is a case of word spreading, and marketing messages sinking in, as the reborn British brand brings new models and variants into popular segments that hit the sweet spot with consumers in perceived value terms and are backed by a reassuring seven-year factory warranty.

As the MG6 mid-size passenger car petered out last year with only 110 sales (-73.7%) – and is now in recess until a new generation arrives in two or three years’ time – the MG3 light hatch dominated proceedings with 4017 sales (+612.2%) in its first full year of trading with an automatic transmission.

It was enough to outpace the ZS small SUV, which accumulated 3729 units (+120.4%), while the GS mid-size SUV, which is at the end of its lifecycle, managed only 361 sales (+8.4%) – a fraction of what MG Motor Australia will be anticipating with its replacement, the HS, which launches soon.

Indeed, December marked the first registrations of the incoming HS, with 109 units, while another 131 landed on the January scoreboard.

Fellow SAIC Motor brand LDV, which unlike MG is handled through independent distributor Ateco, had more temperate growth than the other major Chinese brands but outpaced the overall market by a long way with a 6.9 per cent year-on-year increase, to 6480 units.

The T60 4x4 ute is underpinning LDV’s volume, finding 3529 buyers last year (+10.5%), while the G10 van and people-mover had combined sales of 2167 – the small delivery van holding relatively firm on 1322 units (-1.1%) and the wagon adding 845 (+4.3%).

The larger V80 van chimed in with 520 sales (+571%), while the T60-based D90 large SUV was steady, but far less impressive, with 264 sales (+0.8%) – a situation Ateco addressed late last year with a pricing overhaul.

Sister brands Haval and Great Wall Motors were evenly matched last year with 1706 and 1401 sales respectively, both brands finding growth but still clearly aiming for higher volumes.

Great Wall remains a long way shy of the 11,006 sales achieved in 2012, when Ateco was managing the fledgling brand with a broader range that included SUVs as well as utilities.

Last year, the factory operation’s volume was split between 4x2 and 4x4 versions of its sole model, the Steed ute – 891 (+154.6%) for the 4x2 and 510 (+17.5%) for 4x4.

SUV brand Haval’s sales were divvied up by the small H2 (918, +236.3%), mid-size H6 (475, +163.9%) and the large H9 (312, +84.6%).

January results for all four leading Chinese brands show high levels of ongoing growth as the overall market continues to contract, with MG’s 919 sales an 82.7 per cent increase on the corresponding month last year and LDV’s 384 marking an 82.7 per cent uptick.

Haval also managed 201 units for the month (+443.2%) and Great Wall 125 (+76.1%).