Market Insight: Chinese brands defy downturn - for now

VEHICLE sales in China have taken a massive beating as a direct result of the coronavirus epidemic, plummeting 79 per cent in February and showing no signs of recovery through March although official figures are yet to come in.

But the sale of Chinese vehicles in Australia are withstanding the downturn in this market, with March figures released last week showing a degree of resilience among the four key brands – for the time being at least.

In overall terms, 2127 sales of Chinese-built vehicles were recorded in Australia last month, which is a 48.2 per cent increase on March last year and, with the first quarter now complete, brings the total to 5776 units – up 66.2 per cent compared to the first three months of trading in 2019.

Among the individual brands, MG continues to lead the way, recording 1234 sales last month for a 75.5 per cent increase and sitting at 3316 units for the year to date, which marks a stunning 93.2 per cent improvement and meets its 1000-a-month forecast set earlier this year.

This places it only about 700 units behind the far more established Suzuki (4031, -13.0%) and 17th on the industry’s sales table – which has more than 50 active members – while other big-name mainstream brands that are well behind MG this year include Jeep (1111, -15.4%), Renault (1156, -42.8%) and Skoda (1546, +7.8%).

The MG3 light hatch is proving the biggest drawcard for consumers, with 631 sales last month bringing its YTD total to 1746 – up 137.2 per cent year-on-year.

Solid supporting roles are being played by the recently launched HS mid-size SUV, with 245 sales last month taking its total for the year to 560, while the more established ZS small SUV is posting useful ongoing growth with 358 sales last month (+11.9%) and 1010 for the year thus far (+33.6%).

As GoAuto has reported, the Australian subsidiary of the Chinese auto giant SAIC Motor, under which the MG brand operates, has shown a high degree of confidence that it will trade solidly through the current COVID-19 pandemic – barring tighter restraints on social and commercial activities – as it has plenty of stock on hand and some cause for optimism as China looks set to become the first major market to recover from the crippling coronavirus crisis.

SAIC’s LDV brand is also holding up in Australia in the current environment under independent distributor Ateco Group, although it did fall 6.4 per cent last month (to 509 units).

For the year to date, LDV sales are up 10.7 per cent to 1447 units, with its volume and growth underpinned by the T60 ute (799, +23.3%).

The T60-based D90 large SUV is also in positive territory (86, +86.7%), but other variants are slipping: the G10 van (268, -6.0%), G10 wagon (199, -3.4%), V80 van (97, -21.1%). These were all down on a monthly basis in March, as was the T60.

That leaves the lower-volume sister brands Great Wall and Haval, which are both forging ahead at the moment.

The Steed ute-only Great Wall brand is up 65.5 per cent YTD on 389 units, with the 4x2 proving the most popular (254, +86.8%) alongside the 4x4 (135, +36.4%).

Both variants also turned in overwhelmingly positive results last month, the combined total of 161 units standing 67.7 per cent up on March last year.

The Haval SUV brand, meanwhile, posted 213 sales last month (+131.5%) and at the end of the first quarter has 591 sales to its name (+171.1%), thanks in large part to the H2 small SUV (367, +270.7%) – 134 of which were sold last month alone (+219%).

The H6 mid-size SUV is also chipping in with 144 sales (+114.9%), and the H9 flagship large SUV has 80 sales YTD (+56.9%).

There is no understating how difficult the months ahead will be for the automotive industry, and the threat the current pandemic poses on smaller-scale brands in Australia’s unbelievably competitive and underlyingly weak market.

Some may struggle to stay in business, but the Chinese brands – MG in particular – look to be on relatively solid ground.