Only four Chinese brands became Top 10 in terms of taking up market shares of SUV models in April according to data from China Passenger Cars Association.

 

Look back on last year, SUV models of Chinese brands almost took up the market. Sales of Baojun 560 dropped by 40.7% compared with that of last month in April. Changan CS75 also suffered a yearly drop of 25.9% in sales, ranked the 16th. And sales of Refine S3 even failed to make it one of Top 10.

 

Sales of SUV models of JV brands, on the contrary, increased a lot in April. With a yearly rise of 68.3% in sales, Envision outshined Tiguan. Japanese brands including XR-V, CR-V, Vezel and X-Trail all became Top 10. Rise in sales of XR-V、CR-V both were more than 50%.

 

More and more JV brands begin to fight for larger marker shares of SUV models, leading to fiercer competition for Chinese brands.

Setting low price for SUV models has been the strategy that helps Chinese brands to take up large market shares. Now JV brands also lower price to compete with Chinese brands, making it difficult for Chinese brands to take up larger market shares.

 

Hyundai Kia announced to launch three SUV models of low price for the Chinese marketing in the following two years. VW and GM also announced their plan to launch SUV models of low price for the Chinese market in 2018. Plan of JV brands to launch economical models in 2017 or 2018 may further reduce market shares taken up by Chinese brands.

 

However, price war may not be a good choice for Chinese brands who aim at sustainable development.

 

Launching high-end models help some Chinese brands including Haval of Great Wall build up good reputation in the Chinese market. H6 remains No. 1 in sales of SUV models in April. However, sales of H9, H8 and H7, also positioned as high-end SUV models, were not as good as that of H6. Sales of H7 were 1,290; sales of H8 were 628; sales of H9 were 1,181. Insiders believed small sales of other models of Havel resulted from their high price. Customers may emphasize on brand value rather than products when they buy vehicles at price as high as H7. Therefore, Chinese brands may need to be cautious about price setting when bringing to the market their high-end models.

 

Experts believe that only by investing more on brand building, development of cars models, launching products of different types, marketing mix and developing after-sales service can Chinese brands develop in a sustainable way.