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Energy-saving SUVs gaining market favor
Last Updated(Beijing Time):2011-09-08 15:18

By Chang Yanjun

Although it is a subdivision market, the SUV cars has a strong growth momentum in China's automobile market. The data shows that SUV sales volume in 2010 amounted to 1.326 million, representing an increase of 101.27 percent year on year, and a 68 percent higher than the average speed of passenger vehicle growth. This is the first time that the SUV market scale exceeds one million. In the first half of this year, although the auto market growth dropped, the SUV market still achieved an increase of 20.58 percent.

Zhang Xiaoyu, executive vice president of the China machinery industry federation said in the China's Urban SUV Trends Forum held in 2011 that, SUV market had become one of the highlights for the dropping of the auto market growth in the first half of this year.

Last year, the sales volume of SUV accounts for nearly 10 percent of the total share of passenger vehicle, while in Europe and the US market, this figure was 15 percent and 25 percent respectively. Mizuno Yasuhide, general manager of Dongfeng Honda Automobile Co., Ltd, said: "With China's sustained economic boom, auto market will become more and more mature. It can be foreseen that, along with the gradually diversification of customers and demand, SUV market will present a great potential."

Formed in the 1990s, urban SUV can be regarded as the youngest one among the few SUV categories for its strong power, good operability, comfort and superior passenger and goods loading function to sedan. It can meet consumers' demand for multi-functional auto and make this subdivision category grow significantly in a short time. In Chinese market in 2004, Dongfeng Honda stepped ahead to introduce the second generation of CR-V, pioneered the concept of urban SUV, and soon arose the consumption boom in Chinese market. So far from its launching, CR-V has kept its leading role in sales. By July 30 of this year, the accumulative sales volume of Dongfeng Honda CR-V has accumulated to 500 thousand vehicles.

Thanks to the CR-V's early setting foot in this field when SUV hadn't been started, the sales volume of CR-V could amount to 500 thousand in seven years. As Chen Binbo, executive vice general manager of Dongfeng Honda Automobile Co., Ltd. said, "The success in a subdivision market is to a great extent due to the correct judgment and control on trends. Currently, the Great Wall, as one of the independent brands, is also very successful in this subdivision field."

"Seeing from the internal SUV market, every regional market of China promotes the development of the regional SUV market by the urban SUV." Xu Changming, director of the Information Resources Development in State Information Center pointed out that CR-V in Dongfeng Honda, Tiguan, Sportage, RAV4, Qashqai, Hover SUV of the independent brand Great Wall and Chery's Tiggo all belong to the mainstream models. Their sales are among the top 10 and they perform particularly well in their regional market. The total sales of Dongfeng Honda CR-V in the eastern and central China run the first, and the biggest sales volume in the western area belongs to Hover SUV.

What's more, the demand of Chinese consumer is changing. The common characteristics of mainstream consumers are, they have a higher educational level and income, and pay more attention to family life which is regarded as the center of the life. Therefore, they like the larger and comfortable space to be used by the family. Meanwhile, their reach in life is expanding continually. They want a vehicle to meet their need for urban traffic, and to be used to go for outing or rest. Lin Lei, co-president and CEO of Sinotrust International Information Consultation (Beijing) Co., Ltd. thought: "this indicates that the life trend is changing. Life trend will bring about fundamental changes of people's consumption characteristics and consumption direction. Urban SUV can indeed meet the demand of the mainstream groups of Chinese Consumer, which create ascending conditions for urban SUV."

In addition, the survey of the Sinotrust also showed that the SUV market had experienced some structural changes because of the fast growth in recent years. In 2007, the market share of the top three SUV model was 42.4 percent and the top five was 63.4 percent; while by 2010, the market share for the sales of the top three fell to 27.9 percent, the top five dropped to 40 percent. The declining of concentration shows that products in SUV market are increasingly rich and the competition increasingly intense. Moreover, from the perspective of price, the market share of the SUV products between RMB 15 thousand yuan to RMB 30 thousand yuan has been enlarged continuously; it is expected to be one of the largest segment markets in the current SUV market.

Although the development perspective of SUV market is bright, Dong Yang, executive vice-president and secretary general of China's Auto Industry Association pointed out that one of the major weaknesses of SUV is that it's heavy and the oil consumption is high. "Oil consumption is about to be a big issue. China will surely carry out the relative policy of limiting high oil consumption vehicles or encouraging low oil consumption ones. Meanwhile, Chinese consumers have been influenced greatly by policy all along, so it is a disadvantage. We hope the future urban SUV vehicles will be more energy saving and environmentally friendly."

Zhang Xiaoyu also deemed that the continued growth of SUV market must be integrated with the development of new energy vehicles. He said: "We hope to keep such high growth speed of SUV, and to become the pioneer or the leading figure for the new energy vehicles entering the market. The energy saving and environmentally friendly SUV will be the mainstay of the next stage of development. 
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