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Aug. 3 Newsletter


Industry Trends

July vehicle inventory alert index remains high despite dealers’ effort to boost sales in first half of 2017

  • The China Automobile Dealers Association (CADA) released the Vehicle Inventory Alert Index (VIA) on Aug. 1. The July VIA reached 52.5%, down 5.7% from the previous month, but remainingthe 50% warning line. This means dealers have been facing huge inventory pressure for the time being.

  • The July index remainedthe warning line because of the rise in temperature, which then reduced customers’ visits to dealerships and demand for cars. Dealers’ promotional offers in June also weakened demand for cars in July. Moreover, the boom of some local real estate markets undermined car demand as well.

  • CADA predicts that car sales will remain flat in Aug., since Aug. is an off-season for the car market. (Gasgoo, Aug. 2)

Rankings of auto complaints in China in July; analysis report on car complaints

  • The media outlet 12365auto.com received car complaints totaling 4,131 units in July, up 13.7% year-on-year and up 9.6% month-on-month. The complaints involved 453 models.

  • Complaints filed against JV brands totaled 2,373 units, accounting for 57% of total complaints. Complaints lodged against foreign brands increased 22 units compared with the previous month. Complaints against local brands dropped compared with June.

  • Compared with June, local brands, Japanese brands, and several European brands received fewer complaints in July. The number of complaints against German and South Korean brands increased in the month.

  • In July, problems related with body accessories and electrical systems were most frequently complained. Complaints against problems related with the transmission, steering, braking, suspension, and clutch increased compared with the previous month. Complaints regarding defective engines and tires fell compared with June. (12365auto.com, Aug. 3)

Chinese local brands begin direct competition with JV brands

  • In recent years, Chinese local brands have made substantial progress in both business scale and operating revenue, with their product quality, performance, and service improved a lot. There is a sense that local brands have been able to compete with JV brands by burnishing their brand images and are winning increasing recognition from Chinese customers. 

  • This year, SAIC Motor, Dongfeng Motor, FAW Group, BAIC Group, GAC Group, and Geely made the Fortune 500 list, and the six automakers all continued moving up places on the ranking list.

  • Chinese carmakers have made sweeping improvements in R&D, international business, and market competition and gained certain advantages in the fields of new energy and intelligent cars. In the first half of this year, local brands maintained a stronger growth momentum than the average industry level. In stark contrast, JV brands entered a sluggish growth period. (Economic Information Daily, Aug. 3)

SUV market trends survey report: SUV growth will begin to fall this year

  • Mr. Shi Jianhua, Deputy Secretary General of CAAM, indicated at a recent SUV forum that SUVs will likely outsell sedans in 2017 for the first time, becoming the most popular products of China's passenger vehicle market.

  • However, Xu Changming, Director of the Information Resources Development Department under the State Information Center (SIC), believes that the growth of the niche market has slowed down this year.

  • A survey report released at the forum also says that SUVs have gradually lost strong policy impetus following their prosperity over the past 10 years.

  • Zhang Zhiyong, Founder of Wenfeng Automobile Consultancy, holds the view that the SUV market will be reshaped, with Chinese brands to polarize. 

  • In the meantime, intelligentization and electrification have become irreversible trends in the auto industry, and SUVs could be electrified or hybridized to meet both market and policy requirements. (21st Century Business Herald, Aug. 2)

Latest Car Models

All-new, Chinese-made Volvo XC60 to debut at Auto Guangzhou 2017

  • An insider at Volvo Car China recently revealed that the all-new, Chinese-made Volvo XC60 will debut at Auto Guangzhou 2017, which is set to open on Nov. 17.

  • Positioned as a mid-size SUV, the new model will adopt an overall style remarkably similar to that of the XC90.

  • The new SUV will compete with the Audi Q5, Mercedes-Benz GLC-Class, and BMW X3. (Internet Info Agency, Aug. 2)

All-new Mercedes-AMG A 45 to introduce mild hybrid version, with greatly improved power performance

  • The all-new Mercedes-AMG A 45 was recently spied undergoing a road test.

  • The new model will employ an upgraded 2.0T engine or mild hybrid system, promising a greatly improved power performance.

  • It is expected to be unveiled in 2019. (Cheshi.com, Aug. 2)