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Global giants recover China turf with crossovers
Yang Jian | 2017/12/22

SHANGHAI -- Since 2015 domestic brands have steadily gained market share in China from foreign rivals.

With a varied mix of moderately priced crossovers and SUVs, domestic brands accounted for 46 percent of China¡¯s total light-vehicle sales for the first 11 months of 2017, up from 38 percent in 2014.

But times are changing. Led by Volkswagen Group and General Motors, global automakers hope to regain market share by expanding their crossover lineups.

The trend emerged in 2017 and is likely to pick up steam next year.

To be sure, foreign automakers are achieving mixed results. While Japanese brands are holding up generally well, Hyundai Motor Co., PSA Peugeot Citroen and Ford Motor Co. continue to suffer declining sales. 

But the two largest players in the market -- Volkswagen and General Motors -- are gaining momentum.

After deliveries rose 9.4 percent year on year in October, VW Group¡¯s overall sales in China jumped 15 percent in November. During the same two months, GM sales rose 11 percent and 13 percent, respectively.

Volkswagen successfully launched three crossovers: the VW Touareg, Teramont and Skoda Kodiaq. And GM rolled out the redesigned Chevrolet Equinox, Baojun 510 and Wuling Rongguang S3.

With expanded lineups of crossovers and SUVs, Volkswagen and GM are poised to sustain sales growth next year. 

VW will introduce at least seven new and upgraded SUVs and crossovers in China under the Volkswagen and Skoda marques next year, the VW brand¡¯s China chief, Stephan Wollenstein, said at the Guangzhou auto show in November.

GM¡¯s Baojun brand soon will add a third crossover, the 510, although it has yet to disclose its overall product plans for 2018. 

With a wave of new foreign crossovers on the way, China¡¯s auto market appears headed for a free-for-all.

Two Chinese carmakers -- Geely and Great Wall Motor Co. -- are making progress in moving upscale. Both companies have started selling crossovers under new premium brands, and their goal is to compete directly with foreign rivals. 

But foreign automakers still enjoy a significant advantage: strong product development. And this advantage will help struggling companies such as Hyundai, Kia and PSA to revive sales.

Now that diplomatic relations between China and South Korea are improving, sales of Hyundai and affiliate Kia Motors have bottomed out. Now, the redesigned Hyundai ix35 and Kia KX crossovers should fuel a rebound.

Likewise, PSA sales have shown signs of stabilizing on demand for the Peugeot 5008 and the Citroen C5 Aircross, which arrived this year.

And Ford announced this month that it will introduce 50 new and upgraded models by 2025. 

So it shouldn¡¯t take long for these companies to reverse declining sales.

Chinese consumers seem to have an insatiable appetite for crossovers and SUVs. While other vehicle segments shrank in November, sales of crossovers and SUVs increased 8.9 percent to top 1.1 million. 

As long as global automakers roll out new models, it is only a matter of time before they reclaim turf lost to Chinese brands.

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