With SUVs, Chinese carmakers at last unsettle foreign brands

Fri Apr 17, 2015 1:30am EDT
 
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By Jake Spring

BEIJING (Reuters) - Two years ago, just one Chinese SUV ranked among the country's top-10. In the first three months of this year, that number jumped to eight - a sign that Chinese automakers may have found their sweet-spot to battle foreign rivals in the world's biggest car market.

Despite preferential government policies, local carmakers have failed to really compete with foreign automakers like Volkswagen AG (VOWG_p.DE: Quote) and General Motors in sedan sales. Shifting the battleground to the roomier sport utility vehicle segment may bring more success.

"The domestic SUV market has entered a period of enduring, rapid growth, the market scope has expanded and more indigenous brands have gained momentum," a spokeswoman for Shenzhen-based BYD said in an emailed statement.

"Moreover, BYD, Great Wall, Geely and other indigenous brands have made enormous progress in technology, quality and service."

Retail sales of SUVs jumped by more than a third last year to 3.82 million as Chinese drivers, who are growing wealthier and are often restricted to a single car purchase in crowded cities, increasingly opt for larger vehicles.

IHS Automotive predicts SUV sales will increase by more than a fifth this year, before 2016 growth slips into single digits.

Chongqing Changan Automobile and Great Wall Motor will launch fresh versions of their top-selling SUVs at this week's Shanghai autoshow, while others such as BYD are expected to unveil new models in a rush to ride the rising popularity of SUVs.

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Women walk in front of the logo of Chinese car manufacturer BYD (Build Your Dreams) Auto stage before the opening of the 15th Shanghai International Automobile Industry Exhibition in Shanghai, in this April 19, 2013 file photo. REUTERS/Aly Song