As Analysts Predict Slowdown In Sales Growth, Auto China 2016 Showcases Rise of SUVs in China

02 May 2016 Dashboard Insights Blog

Many of the stories coming out of Auto China 2016 are showcasing the SUVs and luxury SUVs at the show. Highlights include SUVs and crossover SUVs concepts from VW (VW T-Prime Concept GTW), Infiniti (QX Sport Inspiration), Mazda (CX-4, only sold in China), Honda (Concept D), GM (Cadillac XT5), Ford (Everest SUV), and Mercedes (GLC Coupe). Automakers also debuted electric SUV concepts such as the BAIC Motor EX200.

The focus on SUVs comes on the heels of a “love affair” with SUVs in China. During March, China saw 9.8% increase in passenger vehicle sales to dealers in China spurred by this increased demand for SUVs. SUV sales in March jumped 46% compared to a year earlier. 2015 saw a 52 percent increase in SUV sales.

Whether the increased demand for SUVs helps sustain growth in the Chinese auto market has yet to be seen. Based on a survey of Chinese consumers, McKinsey predicts that, “[a]fter five years of double digit growth”, growth in China’s vehicle market will slow to an average of 5 percent a year by 2020. McKinsey also projects that ridesharing services will place increased pressure on the market as more consumers rely on ridesharing rather than car ownership. The rise in shared vehicle sales should partially offset that loss in private vehicle sales. Overall, however, it is expected that Chinese sales will continue to increase year over year through at least 2030.

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