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European brands have long held sway at the high end of China's car market, but they are increasingly squeezing local manufacturers with cheaper offerings.
German carmakers have led the European push, claiming 20.7 per cent of the market in the first 11 months of the year, a rise of 1.5 percentage points from the same period last year, China Association of Automobile Manufacturers data shows.
French brands boosted their market share by 0.7 percentage point to 3.8 per cent.
The figures, which are based on unit sales, also showed a gain for American brands, up 0.3 percentage point to 12.8 per cent.
Chinese producers saw their share drop to 38.1 per cent from 40.2 per cent.
Also losing out were Japanese firms, giving up 0.5 percentage point to 15.3 per cent.
Analysts expect more pain for domestic and Japanese manufacturers next year.
"Considering European and US carmakers' continuous efforts in diversifying product lines and models, as well as targeting the low-end market, their advantageous position can be maintained next year," China Merchants Securities analysts said in a research report.
Japanese producers, although well established in the China market, have been buffeted by the fallout from political tensions between the two countries, analysts say.
But they, along with the domestic manufacturers, have also been hurt by the greater push by their Western rivals into the lower end of the market, accompanied by competitive prices.
The China Merchants analysts said this amounted to a "price shock", given the brand premium that the Western players had commanded in their pricing.
South Korean models were also feeling the pressure, with their market share slipping over the first 11 months.
Harry Chen, an analyst with Guotai Junan Securities, said the Japanese brands were likely to face an extended impact from the bilateral tensions.
"With the many choices of car models offered by US and European brands, Chinese consumers will consider shifting to other brands despite their loyalty to Japanese carmakers," Chen said.
The top three Japanese players - Nissan Motor, Toyota Motor Corp and Honda Motor - last month lowered their China sales targets for this year due to sluggish sales.
Launching new models that targeted lower-tier cities would help Japanese brands win market share from domestic ones, but price competition would be intensified, Chen said.
Sales of sport utility vehicles outperformed other segments, posting 34.1 per cent growth for the first 11 months to 3.59 million units from a year ago. This compared with a 2.6 per cent rise in sedan sales to 11.11 million units. Chen said the trend would continue next year.
However, Dong Yang, the secretary general of the state-backed carmakers association, said the resilience of Japanese brands had been underestimated.
"Japanese cars are not second to European ones. If their outlook had not been clouded by political factors, their market share should have been bigger than the current levels," he said.
Domestic carmakers would continue to struggle next year, Dong said. "I don't think home-grown brands have bottomed out [in terms of market share]. We still need to observe their performance early next year."
However, car sales as a whole, including passenger and commercial vehicles, would see a slight improvement, with year-on-year growth for next year forecast at 7 per cent, Dong said.
John Zeng, a director at consultancy LMC Automotive, expects passenger car sales to outperform with a 9 to 10 per cent gain next year.
Passenger car sales for the first 11 month grew 9.2 per cent to 17.64 million units from a year earlier, while those of commercial vehicles fell 7.3 per cent to 3.44 million units, data from the carmaker association shows.
Zeng is more optimistic about the outlook for domestic brands as major players such as Geely Automobile Holdings and Changan Automobile had launched new models and would see sales pick up next year.
Although the anti-monopoly wave that broke out in August brought down prices for some car models and parts, Zeng said the probes "have come to an end and are unlikely to have a long-lasting impact on sales of European brands".
 


European carmakers extend lead in China

European carmakers are likely to maintain their advantageous position in China, given their continuous efforts in diversification. Photo: AFP

Business

China Business

More pain seen for local and Japanese carmakers next year as Western players increase their push in the low-end market


European brands have long held sway at the high end of China's car market, but they are increasingly squeezing local manufacturers with cheaper offerings.


European carmakers extend lead in China

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}More pain seen for local and Japanese carmakers next year as Western players increase their push in the low-end market

More pain seen for local and Japanese carmakers next year as Western players increase their push in the low-end market