By Yang Zhongyang
With the comfort of a sedan car and the performance of a cross-country car, sport-utility vehicles, or SUV, have been greatly favored in the market in the past few years. According to statistics from China Association of Automobile Manufacturers (CAAM), China's automobile production and sales in the first quarter are 4,784,200 units and 4,792,700 units respectively, minor decreases of 1.8 percent and 3.4 percent compared with the same period of last year; SUV, however, goes up against the trend, achieving production of 447,000 units and sales of 441,600 units, increasing by 22.23 percent and 18.05 percent compared with the same period of last year.
In the Auto China 2012, the reporter discovered that not only major Chinese and foreign car companies have promoted their strategic SUV models, but also luxury brands, which normally produce only super sports car and limos, were eager to introduce their SUV models, intending to seize some shares in this segmented market.
Why everyone is enthusiastic
Its white body is like a killer whale jumping out of the water, its fast running blue wheel hubs chasing the waves. This is Great Wall's first concept SUV -- Haval E, its entrance was like a surging wave that shook the entire exhibition booth. On April 23, in Booth no.23 in E2 Exhibition Hall, the reporter saw not only the concept model Haval E, but also Great Wall's another 11 SUV models including the Haval H7, Haval M4, Haval H6, Haval H5, and Haval H5 Euro Style Edition, all of them very eye-catching.
In the meantime, in Booth 106 in the W1 hall, Dongfeng Luxgen's 7 SUV 2wd Flagship edition was closely surrounded by viewers. "Dongfeng Luxgen's 7 SUV has just got 5-star result in the first C-NCAP crash testing in 2012", said Wu Xin, managing director of Dongfeng Yulong Company Limited. According to Wu Xin, this SUV is equipped with highly effective 2.2L MEFI Turbo engine. With its luxury equipment, its intelligent technology, and its domestic pricing, it will continue to be a leading product in the SUV segmented market.
It's noteworthy that Ford, who doesn't possess leading advantages in the Chinese market, has not only introduced the world's first brand-new high-performance Focus ST in this year's Auto China, but has also highlighted all its SUV models at the center of its booth, showing Ford's determined commitment to become China's SUV market leader. "After the new Focus, Kuga is another key model of the 15 models that Ford promises it would bring to the Chinese market before 2015", Xiao Dawei, Chairman of the board and CEO of Ford China, told the reporter, "This SUV model integrates fashion, intelligence, and energy conservation. Our company is very confident about its performance in the Chinese market".
From Ford's Kuga to Buick's Encore, from Acura's RDX to Infinite's JX35, from BMW's M6 to Volvo's V60, the reporter saw that most multi-national auto companies have exhibited brand-new SUV in their booth in this year's Auto China. Besides, judging from the high-profile appearance of GAC's Trumpchi GS5, Changan's CS35, Brilliance's V5, Geely's GX7, and Dongfeng Fengxing's Jingyi, we can see that domestic brands have a lot of faith in the SUV market.
Rather surprisingly, luxury brands, including Bentley, Lamborghini, and Maserati, who normally produce only super sports car and limo, were eager to introduce their SUV models in this year's Auto China, hoping to expand their product line and grab some shares in the SUV market.
The thriving and growing domestic market
Why sellers are so enthusiastic about SUV? According to industrial participants, the main reason is the still strong demands in the Chinese market. According to statistics from CAAM, sales of domestic SUV in 2011 amounted to 1,593,700 units, and statistics from customs show that China imported 567,000 units of SUV in 2011. This means that in 2011, total sales of SUV models in China exceeded 2.1 million units, an increase of more than 20 percent compared with the same period in 2010. Even so, some SUV models are still in short supply after they have entered the market for years. Buyers may need to pay some extra money or wait for months to get the car.
Among the numerous segmented car markets, SUV outshines others. Dong Yang, standing vice president and secretary-general of CAAM, believes that this is the result of China's consumption upgrading and market segmentation. "The overall proportion of SUV in China is not exceptional. Maybe this is a development phase. When people bought their first car, they all chose a sedan. Now some people are buying their second car or replacing the first one, SUV become a choice".
As more and more people born in the 80s join the car-buying army and the car-replacing population becomes bigger, SUV will become more appealing to urban citizens who pursue free and comfortable lifestyle. According to a survey, there are three main reasons why consumers favor SUV: first, the multi purposes and practicability of SUV; second, SUV appears more majestic compared with compact models; third, SUV has become a culture and fashion, and the choice of SUV can exhibit the fashion style of the owner.
In order to cater to and seize the consumers, major car manufacturers are employing all their skills. They introduce new SUV models, with bigger room, richer configuration, more handsome appearance, more powerful drive, and better fuel efficiency, so as to improve their competitiveness.
Experts suggest that at the current growth rate, it may take only a few years for the market share of SUV in China to catch up with and exceed that of semi-luxury cars and approach that of economic cars, or even reach the similar level of European and American car market, accounting for more than 15 percent of the entire passenger car market. In Europe and the USA, SUV accounts for about 15 percent and 25 percent shares of the markets; in 2009, the SUV market took up 28 percent of the American market at one point. In 2011, China's SUV accounted for about 10 percent of the auto market, its development potential being huge.
Mei Songlin, Chief Research Director of J.D. Power Asia Pacific – China, estimates that the prosperity of China's SUV market would last for about another 5 years. His conclusion is mainly based on the development rules of the phase characteristics of the market. "Currently, third-tier and fourth-tier cities in China are currently in the phase where domestic auto brands prevail. The next phase is the entrance of low-end joint-venture brands, and in the next phase, low-end SUV enters the market. Therefore, in the next 5 years, SUV will continue to grow rapidly", said Mei Songlin.
"SUV is a type of car that can exhibit the individuality of the owner", says He Junjie, chief sales director of Changan Ford, who suggests that SUV has larger room and gives people a better sense of safety and reliability. There are many reasons for consumers to buy a SUV, and the market will continue to thrive for years.
