Chinese car Industry
Veedhi Singh
HR and Head Corporate Communication at Autobei Consulting Group (Automotive Business Consulting)
How the Chinese car industry is going to shape its future is our latest detailed Study on China Car Industry. The Chinese car market is the world’s biggest passenger car market. It grew into one of the largest Auto markets and has remained the same till now. The China passenger vehicle Industry registered a 1.2% CAGR from 2015 to 2019 and is expected to register a 3.9% CAGR in the next 5 years.
In 2019, the Chinese Passenger vehicle Market recorded a 10% fall compared to 2018. The outlook for the year 2020 China car market is critical considering the latest market dynamics. The Chinese Industry is expected to show a 3 to 4% degrowth in 2020.
In the Passenger vehicle segment (Car, SUV, and MUV), the Honda, Geely, BMW, Mercedes, Baojun, Roewe, Volvo, Cadillac, and MG are considered the top players as per CAGR and Sales analysis from 2015 to 2019. The overall segment registered a 1.2% CAGR in the last 5 years. In the next 5 years, it’s expected to rise and reach almost 3.3% CAGR.
Chinese Brands like Haval, Geely, Changan also started to dominate the Russia Car market in 2019. It shows how Chinese brand perception is going to change in major auto markets like Africa, Russia, India .
Car Segment:
VW, Honda, Toyota, Nissan, and Buick are major players with a combined market share of 53% in 2019. Premium German automakers Audi, BMW, and Mercedes were also top players in this category. The segment noted a -3% CAGR from 2015 to 2019 and expected to decrease further i.e -1.1% CAGR from 2020 to 2024.
SUV segment:
The SUV segment showed 11% CAGR from 2015 to 2019 and is expected to fall and reach 5.8% CAGR from 2020 to 2024. VW, Haval, and Geely are considered the top 3 players of this segment with a combined market share of 23% in 2019.
VW registered 34% CAGR from 2015 to 2019. They also added a 5% market share in the last 5 years. Geely’s performance is excellent with a 6% increase in its market share from 2015 to 2019. BMW, Jeep, Skoda, MG further registered a double-digit CAGR growth from 2015 to 2019.
MUV Segment:
The MUV segment is dominated by Chinese, American, and Japanese players. The MUV segment registered -10% CAGR from 2015 to 2019 and is expected to show an immense growth of 11.3% in the next 5 years. This forecast estimate is based on a new customer survey and a new product range plan. Customers perceive MUV as more spacious and more convenient than SUV. Similarly, customer centricity was observed in the US market .
领英推荐
Currently, the Chinese car segment is encountering some challenges. As a result, the consumer confidence index has fallen due to the China-US Trade war; however, the US has given some signs of lowering this pressure this year. New emission standards in China, tighter restrictions on buying cars in the biggest cities, rising inflation, and a growing used-car market all would hurt car sales in the domestic market.
Segment share of Car, SUV, and MUV:
In 2019, the Car, SUV, and MUV had 48%, 44%, and 8% segment share respectively. It is anticipated that this will become 40%, 49%, and 11% by the end of 2024.
Customer Behavior Pattern and Product Strategy:
The overall pace at which Chinese consumption has grown is hard to imagine; just a decade ago, urban Chinese did not have enough money to cover their basic needs like food, clothes, and housing and now, half are living in relatively well-to-do households, where they get ample funds from perks like regular meals, premium products, latest electronics, and holiday travel. China maintained stable employment factors last year.
Currently, urban consumers are now the prime drivers of the Chinese economy, with their spending account crossing over 60 per cent of GDP growth. In the next 5 years, the Tier II system is believed to engage actively to drive the economy.
It is expected that the new employment factor will continue to score more than 13 million jobs for five consecutive years. In December 2019, the Consumer Price Index (CPI) rose by 4.5 per cent year-on-year, with an increase of 4.2 per cent in the urban sector and 5.3 per cent in the rural sector.
In 2019, the per capita consumption of the whole country was 21,559 yuan, which is a trivial increase as compared to the same period of last year, but a steep increase i.e 5.5 per cent after deducting the price factor.
In the coming decade, household consumption will grow by an average of 6% annually; which will be mainly powered by upper-middle-class people who will expand to represent an estimated 56% of households by 2024. The new job creation and population movement from rural to urban areas, where incomes are higher will be their key drivers. The resulting income growth will elevate underprivileged and lower-middle-income households to an upper middle class and affluent respective with income support of around 66% of the total population.