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The Growth of Chinese Vehicle Sales

Australia ended 2020 with over 100,000 fewer new vehicle sales than the year before. While this is understandable given the impact of COVID-19, we feel that there is light at the end of the tunnel. Australian new car sales (as at Feb '21) have now risen for the fourth consecutive month, with the market recording a 5% YoY jump in February off the back of almost 85,000 new vehicles sold. Encouragingly, this growth is almost entirely driven by consumers (YoY sales up 16%), as they regain the confidence to start spending on big-ticket items.

Digging deeper into the data, we can see that one factor underpinning these results is the growth of Chinese brands. China has gone from the 11th largest source of new motor vehicles in 2013 (7,092 vehicles) to 6th in 2020 (30,696 vehicles), and is now 4th in February 2021 (5,103 vehicles in a single month – 60% increase from Feb '20). Sitting just behind the major automotive manufacturing markets of Japan, Thailand, and Korea, this highlights the growing emphasis Chinese manufacturers are placing on the Australian market.

Key to this growth has been the remarkable performance in recent years of MG, as it became the first Chinese-owned brand to break into the top 10 in new vehicle sales when it hit 8th spot this month (ahead of industry stalwarts Volkswagen and Mercedes). With 3,017 sales in February 2021, MG has seen an impressive 159% YoY increase, continuing its rapid growth trajectory since its relaunch in 2017 (up 2,442% to 2020).

Although other Chinese brands have not seen the same scale of growth, it would be remiss not to mention their exciting progress. In terms of yearly sales, LDV has grown a massive 505% since 2016, from 1,542 to 9,323 in 2020, and Haval is up 1,052% over the same period (from 286 in 2016 to 3,294 in 2020).

While the Chinese brands have achieved a lot of their success in the booming SUV and ute markets, the MG3 small car has also played a significant role in MG's excellent result. As of February 2021, it is the 5th most popular car across the Micro, Lite, and Small segments (and the most popular lite car overall) – positioned as a serious contender to perennial favourites such as the Mazda 3 and Kia Cerato. In the words of MG Motor Australia’s market and product director, Danny Lenartic:

“Our position is a lot of car for the money, with a warranty to back it up.”

Whilst the growth to date in sales of Chinese-made vehicles has been impressive, our sense is that they are only getting started. Based on announcements to date, we will see a number of new and improved models over the next 12-24 months, with a particular focus on style, comfort, and safety technology. Additionally, given China's global leadership in terms of research and development into alternative powertrains, they are well positioned to deliver compelling, well-priced electric vehicles over the medium term.

If you’ve got any questions, or would like more information about new vehicle sales in Australia, please get in touch with our team of experts.

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Topics: Market Research Automotive Research Thought Leadership Research automotive trends vfacts