Friday, February 13, 2009

Interesting Moves in Auto Market Share

Here's a chart put together by showing one-month market share changes in China. While a single month's results should not be interpreted as a trend, there are a few interesting observations to make here.

The most interesting detail I can see is that three of the top six market share gainers are the only three private firms on the list: BYD, Great Wall and Geely. The remaining firms are SOE-foreign JVs and a handful of SOE Chinese brands (Chery, Brilliance, Hafei, Tianjin and Changan).

Given Beijing's support for its state-owned automakers, and its determination to see consolidation in this industry, the continued success of the private firms is fascinating. One of the objectives of my research is to understand the story behind why these guys continue to slug it out with the SOEs, and why they think they can succeed.

Although there's no way for me to know this for certain, it is possible that BYD's bump is related to Shenzhen's announcement of a fleet purchase of BYD's new plug-in hybrid.

Also, keeping in mind that these are full-year 2008 numbers compared to January of 2009, Hyundai's increase is a little surprising given that 2008's numbers likely contain huge fleet purchases of Hyundais for taxis in Beijing.

As for Toyota's drop, that's surprising given the popularity of Toyota in China. While there's no love lost between China and Japan, Chinese consumers tend to place Toyota at the top in terms of quality.

Any other ideas on what may have driven these one-month changes in market share?

UPDATE: Despite its having lost a sliver of market share during January, Chery announced that it had the biggest January in its 12-year history, working its people overtime during the Spring Festival and moving over 35,000 vehicles. They attribute the big increase to the tax breaks given to purchasers of small cars from January 20.


  1. hyundai's market share is up in the US, too. did they offer chinese buyers the same they offered americans? and did they market it during some super-bowl equivalent show?

  2. Thanks, Kim.

    There was indeed a TV event equivalent to the Super Bowl on January 25 (The CCTV New Year Gala), but that probably would have come too late to affect overall sales. Though it's been a few years since I last watched it, I don't remember there being a lot of ads anyway.

    There was also a 5% tax break on small (<1.6l) cars that went into effect on January 20. That may have had some affect, and it may also explain the presence of the private automakers at the top of the list (in this case, bottom); they make mostly small cars that are eligible for the tax break.

    I did find this on Hyundai and their affiliate Kia:

    Sounds like they have geared up for big growth in 2009, but that doesn't explain why Hyundai did so well and Kia lost a little market share.

    Just a guess here, but, like in the U.S., maybe Chinese consumers see Hyundai as a better quality vehicle than Kia, if for no other reason than that they are more familiar with the brand.

    I know that a lot of people in Beijing see Hyundai as quality brand due to the city's purchase of hundreds (maybe thousands?) of them for taxis prior to the Olympics. I was a little disappointed last summer when my last taxi ride in Beijing was in one of the old, formerly state-of-the-art, VW Santanas. :-)

  3. Nope, no ads in the CCTV New Year Gala. Although, there was a lot of ads in the nearly half hour gap between the weather forecast and the start of the gala, but certainly nothing (beyond the sheer number of ads) stood out.

    I also noticed a preponderance of small car makers like Suzuki and Chang'an near the, uh, bottom of the list. My impression is people are starting to value fuel-efficiency.

    Could Hyundai's Chinese branding as 北京现代 be helping its image here in Beijing?

  4. Thanks, Chris. I think you may be right about sensitivity to fuel efficiency. Last year's bump in fuel prices (even if it was somewhat minimized by price controls) was probably a shock to the average driver who had precious little funds remaining after springing for the car.


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