The Chinese Passenger Vehicle market is on track for sales of ~22 million units in 2021 – equal to the 2019 level. But the segment mix will differ from 2019, and “the rate of recovery from the 2020 decline will be far from uniform across the various sales groups per LMC. In terms of market status the Premium share is expected to improve from 14% in 2019 to 18%. The Low-Cost segment is forecast to end 2021 with 2% market share, up from 0.5% in 2019. Click to Enlarge.
The Chinese central government put into action a series of policies focused on ample monetary funding and pro-active fiscal measures during the still ongoing Covid crisis. With the effective containment of the virus in China from strong government public health/common good rules and regulations, the government intervention resulted in a quick economic recovery. While the auto market in other major economies floundered during the second half of 2020, the Chinese auto market beat expectations. The recovery continues during 2021.
As with most statistics though, the devil is hiding in the details. Consultancy LMC Automotive says there is an enduring imbalance in the economy’s internal structure: the performance of the Purchasing Managers’ Index (PMI) among medium and large enterprises is significantly better than that among smaller enterprises.
“In the post-pandemic era, the PMI of small companies is below the 50% mark. The PMI of larger companies, in contrast, is above the 50% mark, indicating that the government’s fiscal and monetary policies have been less effective for smaller enterprises than for their medium and larger counterparts. In short, the economy is showing a K-shaped recovery curve,” observes James Zhu, Powertrain Analyst at LMC.
Based on LMC’s latest forecasts, the Chinese Passenger Vehicle market is on track to hit sales of ~22 million units this year – equal to the 2019 level. But the segment mix will differ considerably to that of 2019, and “the rate of recovery from the 2020 decline will be far from uniform across the various sales groups, says LMC [see chart].
LMC projects 15 segments will have record sales growth this year. However, 15 segments are expected to close the year in negative territory, when compared with 2019. “In other words, it will be a zero-sum game, with some OEMs recovering strongly, while others fail,” said Zhu.
The Compact segment, which accounts for the largest share of China’s overall market, is forecast to decline from 63% in 2019 to 60% in 2021. This contrasts with growth in the Mini, Mid-size and Full-size segments. Mini segment share is projected to expand from 0.5% in 2019 to 3% by the close of this year, while the Mid-size and Full-size segments should see market share rise from 20% in 2019 to 24% in 2021.
In terms of market status, Premium segment share is expected to improve from 14% in 2019 to 18% this year, and the Low-Cost segment is forecast to end 2021 with 2% market share, up from 0.5% in 2019.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn.
He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe.
Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap.
AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks.
Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.
Chinese Covid Recovery Policies is Zero-Sum Game for Automakers Overall. Luxury, Compact Segments Benefit Most?
The Chinese Passenger Vehicle market is on track for sales of ~22 million units in 2021 – equal to the 2019 level. But the segment mix will differ from 2019, and “the rate of recovery from the 2020 decline will be far from uniform across the various sales groups per LMC. In terms of market status the Premium share is expected to improve from 14% in 2019 to 18%. The Low-Cost segment is forecast to end 2021 with 2% market share, up from 0.5% in 2019. Click to Enlarge.
The Chinese central government put into action a series of policies focused on ample monetary funding and pro-active fiscal measures during the still ongoing Covid crisis. With the effective containment of the virus in China from strong government public health/common good rules and regulations, the government intervention resulted in a quick economic recovery. While the auto market in other major economies floundered during the second half of 2020, the Chinese auto market beat expectations. The recovery continues during 2021.
As with most statistics though, the devil is hiding in the details. Consultancy LMC Automotive says there is an enduring imbalance in the economy’s internal structure: the performance of the Purchasing Managers’ Index (PMI) among medium and large enterprises is significantly better than that among smaller enterprises.
“In the post-pandemic era, the PMI of small companies is below the 50% mark. The PMI of larger companies, in contrast, is above the 50% mark, indicating that the government’s fiscal and monetary policies have been less effective for smaller enterprises than for their medium and larger counterparts. In short, the economy is showing a K-shaped recovery curve,” observes James Zhu, Powertrain Analyst at LMC.
Based on LMC’s latest forecasts, the Chinese Passenger Vehicle market is on track to hit sales of ~22 million units this year – equal to the 2019 level. But the segment mix will differ considerably to that of 2019, and “the rate of recovery from the 2020 decline will be far from uniform across the various sales groups, says LMC [see chart].
LMC projects 15 segments will have record sales growth this year. However, 15 segments are expected to close the year in negative territory, when compared with 2019. “In other words, it will be a zero-sum game, with some OEMs recovering strongly, while others fail,” said Zhu.
The Compact segment, which accounts for the largest share of China’s overall market, is forecast to decline from 63% in 2019 to 60% in 2021. This contrasts with growth in the Mini, Mid-size and Full-size segments. Mini segment share is projected to expand from 0.5% in 2019 to 3% by the close of this year, while the Mid-size and Full-size segments should see market share rise from 20% in 2019 to 24% in 2021.
In terms of market status, Premium segment share is expected to improve from 14% in 2019 to 18% this year, and the Low-Cost segment is forecast to end 2021 with 2% market share, up from 0.5% in 2019.
About Ken Zino
Ken Zino, editor and publisher of AutoInformed, is a versatile auto industry participant with global experience spanning decades in print and broadcast journalism, as well as social media. He has automobile testing, marketing, public relations and communications experience. He is past president of The International Motor Press Assn, the Detroit Press Club, founding member and first President of the Automotive Press Assn. He is a member of APA, IMPA and the Midwest Automotive Press Assn. He also brings an historical perspective while citing their contemporary relevance of the work of legendary auto writers such as Ken Purdy, Jim Dunne or Jerry Flint, or writers such as Red Smith, Mark Twain, Thomas Jefferson – all to bring perspective to a chaotic automotive universe. Above all, decades after he first drove a car, Zino still revels in the sound of the exhaust as the throttle is blipped during a downshift and the driver’s rush that occurs when the entry, apex and exit points of a turn are smoothly and swiftly crossed. It’s the beginning of a perfect lap. AutoInformed has an editorial philosophy that loves transportation machines of all kinds while promoting critical thinking about the future use of cars and trucks. Zino builds AutoInformed from his background in automotive journalism starting at Hearst Publishing in New York City on Motor and MotorTech Magazines and car testing where he reviewed hundreds of vehicles in his decade-long stint as the Detroit Bureau Chief of Road & Track magazine. Zino has also worked in Europe, and Asia – now the largest automotive market in the world with China at its center.