Domestic Brands Losing SUV Market

chery rely x5 suv

Facing fierce competition from foreign-owned, global brands, the home-grown Chinese auto industry, which is still coming of age, has shown surprising resilience. In the first three months of this year, native automakers held a near 50% share of China’s passenger vehicle market, selling 1.75 million units. However, this number looks less assuring if one considers the fact that the majority of the vehicles sold under native brands are subcompact and micro models. These models have much thinner profit margins compared with those in higher segments, in which foreign brands dominate. Add to their worries, the natives are losing share in the increasingly important SUV market in China.

Several Chinese automakers have product lineups nearly exclusively made up of SUVs and pickups, notably Changfeng and Great Wall. In 2002, around 70% of all SUVs sold in China are produced by domestic manufacturers, while only 20% in 2009. Take a quick look of our top 10 best-selling SUVs list in March and you will find Korean and Japanese models rule. In the past five years, Hyundai-Kia started to produce Santa Fe, Tucson, and Sportage in China through their JV companies, followed by Honda’s CR-V and Toyota’s RAV4 and Highlander. Recently, Hyundai’s ix35 rolls out of its Beijing factory. Domestic brands battle on; about ten all-new models from them are scheduled to hit the market this year, including Chery Rely X5 (see the gallery below) and Great Wall H5. It is important to see if they can truly go beyond copying foreign models and depending almost solely on low prices for marketing.

Rely X5 Gallery