The Chinese market remains strong in the the first half of 2014

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The Chinese market remains strong in the the first half of 2014

- The Chinese market (PC + LCV) remains strong in the first half of 2014, since it increased by 8.4% over this period, reaching 11.68 million vehicles, against 10.78 million recorded in the first half of 2013.

- Since 2011, the growth pattern seems to be accelerating, since it was only 2.7% in 2011 compared to 2010, 4.2% in 2012 compared to 2011, 6.1% in 2013 compared to 2012 and will probably be of 7.5% throughout 2014 compared to 2013. The year should end with a level close to 22 million vehicles sold in China, which represent more than a quarter of world wide sales.

- There now are no signs of slowing down or of a future slowdown (until 2020) of the Chinese automobile market . Car ownership is still very low, especially in western provinces of the country, that registered more important growth than eastern provinces.

- By manufacturer, Ford increased the most over the  six aggregate months of 2014 (+39%), followed by PSA (+27.5%), Volkswagen (+18%), Honda (+17%), Changan (+ 16%) and GM (+12.5%). Declining carmakers are all independent ones: Geely (-27.5%), Brilliance (-26.5%), FAW (-26%), JAC (-21.5%), BYD (-20.5% ), Lifan (-12.5%), Chery (-11%), Great Wall (-6%) and MG-Roewe (-3%). The objectives set by the Chinese government are very far from being reached.
 

14-23-3  


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PSA has announced the construction of a 5th plant in China

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PSA has announced the construction of a 5th plant in China

- In 2014, PSA’s production of passenger cars in China is expected to reach 700 000 units. This production is spread over 4 plants: 3 plants in JV with Dongfeng for a capacity of 750 000 units and 1 plant with Changan with a capacity of 200 000 units. Therefore the utilization rate of the PSA-DFM plant reached almost 74% and with an expected growth rate announced by PSA of almost 20% per year in future years, current production capacity will be saturated by 2016.


- This is the reason why PSA and Dongfeng announced the construction of a fourth plant, which will be PSA’s 5th plant in China. The plant, will have a capacity of 250 000 units and will be located in Chengdu,  production should start towards the end of 2016.


- The vehicles manufactured in the future plant have not yet been announced but they will probably be SUVs and MPVs from the Citroën, Peugeot and Fengshen brands (the DS brand being exclusively produced by Changan). We can therefore assume that the future Citroen SUV from segment B the CX-R (scheduled for 2015), will be one of the models produced in Chengdu.


- In the first six months of 2014, PSA produced 355 000 passenger cars, which ranks it the 9th largest producer in China, behind Honda (416 000 units) and Ford (398 000 units). Despite its growth, the position of PSA should not change in the next five years as Honda (+16% in 2014) and Ford (+40% in 2014) have also experienced strong growth. Ford, however, could overtake Honda before 2020.

 

14-22-10  


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Collapse of both production and sales in Venezuela

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Collapse of both production and sales in Venezuela

- The Venezuelan market (PC + LCV) is expected to reach less than 20 000 units in 2014, if the trend of the first 6 months of 2014 confirms itself (8 236 sales). This low volume is equivalent to the sales of a country like Cyprus. The country had yet experienced sales volumes reaching nearly 500 000 units (2007), the equivalent of the automotive market of the Netherlands.

- The country experienced a drop in registrations of nearly 96% between 2007 and 2014. This drop corresponds to the introduction of restrictions on the import of vehicles by the Chavez government, with the aim of increasing local production. Vehicle importers (like any other business in the country) must apply for foreign currency in order to import their vehicles. Yet the automotive sector receives very little foreign currency granted to importers (1% in 2014).

- However, local production has not offset the drop in imports, declining from 172 000 units in 2007 (the highest year) to almost 15 000 units (estimates for 2014). Indeed, manufacturers are impacted by the same restrictions on the importation of spare parts. Therefore, Toyota and Chrysler in particular, have almost stopped their production since the beginning of the year, while Ford, GM and Mitsubishi have a virtually non existing production, plants stay open just for the sake of it.

- Consequently, the Venezuelan market is one where it takes nearly a year to buy a new vehicle and where used vehicles are more expensive than new vehicles. In this doldrums, the hottest product is the Mitsubishi Lancer (715 units in the first 6 months) in front of the Ford pickup C3500 (554 units) and Ford Silverado (505 units).
 

14-22-9  


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The European market is recovering in the 1st half of 2014

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The European market is recovering in the 1st half of 2014

- The European market 29 countries recorded an increase of 5.1% in June, reaching 1 232 425 units, up 6.4% on the aggregate six months to 6 847 244 units, offsetting only part of the 2008 to 2013 decline. Let us recall that the European market, 29 countries had lost 23% of its volume between 2007 and 2013.

- It is mainly Eastern Europe countries that benefited from a strong recovery in sales in 2014 (+21.4% over the last 6 months), to 457 769 units, but the market of these 12 Eastern European countries did lost 35% of its volume between 2007 and 2013.

- To the west of Europe, Portugal (+37.9%), Greece (+23.4%), Ireland (+23.4%), Spain (+17.6%) are the countries that increased the most, but there again they had declined significantly between 2007 and 2013.

- This market growth is the result of an adjustment due to the sharp decline in previous years. The markets that suffered the least during the last 5 years (eg Germany) benefited the least of this catch up effect.

- Manufacturers who benefited the most from this upturn are : in first position Renault-Nissan (+16.7%), Volvo (+10.8%), and with lower volumes Mazda (+24.2%) and Suzuki (+12.5%), thanks to a novelty effect.

- Throughout the year, the European market is expected to slow its growth and rise between  4.5% to 5.0% (including +4.3% in Western Europe and +13% in Eastern Europe) .
 

14-23-1  


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Smart unveils the new Fortwo and Forfour

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Smart unveils the new Fortwo and Forfour

- Smart unveiled the new generations of the Fortwo and Forfour, which will be marketed in Europe as of November. In the United States, only the Fortwo will be marketed, and it won't be launched until after autumn 2015.


- The Forfour (which shares its platform with the Renault Twingo) will be produced in the Slovenian Renault plant located in Novo Mesto, while the Fortwo will continue to be assembled in the Smart plant of  Hambach (France).


- At their launch, the two models will be equipped with a 3-cylinder petrol version 90hp at first and a 70hp engine in a latter version. In 2015 a version with an electric engine will also be added to the range.


- Smart hopes that the launch of the Forfour will boost sales. This is the first car with four doors and four seats that the brand has launched since the first Forfour marketed only for two years, from 2004 to 2006.


- In the first half of 2014, Smart global sales have indeed fallen by 10% compared to the first half of 2013 to 47 000 units. However, Daimler, the parent company of Smart, believes that this brand is an important element of the Group's strategy, as sales of ultra compact cars could increase by nearly 40% by 2020, reaching an annual sales volume of 1 million units.

 

14-22-8  


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  1. Construction of two new VW plants in China
  2. The new Skoda product plan (2014-2018)
  3. Renault increased its global sales by 4% over the first five months of 2014
  4. Brazil: Production PC + LCVs is falling sharply in 2014
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