Sales in China rise 8.0% to 12.81 million units in first half of 2016 due to tax breaks

SUV sales remain strong; Chinese own brand share expands

2016/08/18

Summary


(Source: Created based on MarkLines' data)

  In the first half of 2016 vehicle sales in China increased by 8.0% year-over-year (y/y) to 12.81 million units (on a factory shipment basis, including exports), exceeding 12 million units for the first time for the period. This is largely attributed to a tax break that the Chinese government started offering to purchasers of passenger cars with engine displacements of up to 1.6 liters in October 2015.

  In the sales volume rankings for Chinese automotive groups for the period, Shanghai Automotive Industry Corporation (SAIC Motor Group) and Dongfeng Motor Group Co., Ltd. maintained the first and second positions respectively. Competition for the third place between Changan Automobile (Group) Co., Ltd., China FAW Group Corporation, and Beijing Automotive Group Co., Ltd. (BAIC) was tight. The top five groups sold roughly 9.19 million units, which accounted for about 72% of the market.

  As for market share by vehicle type, the sales volume of sport utility vehicles (SUVs) increased 43.7% from 2.67 million units in the first half of 2015 to 3.82 million units in the first half of 2016, and accounted for about 30% of the entire automotive market. At the same time, the sales volume of sedans and hatchbacks for the first half of 2016 decreased 3.8% y/y to about 5.57 million units. The sedan and hatchback share of the entire market fell from 48% in 2015 to 43%.

  In the market share breakdown for Chinese and foreign brands, Chinese own brands held a top share of about 42% of the domestic passenger car market because of aggressive SUV model launches. The share for Japanese brands expanded to approximately 16% while that for French brands shrank.

  China's vehicle imports and exports for H1 2016 decreased y/y for the second consecutive first half period. In May 2016, vehicle imports to China increased 6.1% y/y, showing some signs of recovery.

  Sales of new energy vehicles (electric vehicles (EVs) and plug-in hybrid vehicles (PHVs)) in China for H1 2016 were around 169,000 units (including commercial vehicles), approximately 2.3 times that for the same period of the previous year. Of China's total passenger car sales volume for H1 2016, about 108,000 units were new energy vehicles. BYD Auto maintained the top position and held around 42% of the new energy passenger vehicle market.


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