The stalled MPV market: Who is happy and who is sad

The China Passenger Car Association recently released data showing that passenger car terminal sales in a narrow sense reached 1.7449 million units in June, up 5.1% year-on-year and up 0.2% month-on-month. Cumulative sales from January to June reached 10.5624 million units, up 0.8% year-on-year. The automotive market situation in the first half of the year has been settled.

Among them, SUVs grew by 17.7% year-on-year, becoming the "biggest winner" in the dull auto market without exception, while sedans slightly decreased by 0.1% year-on-year. In sharp contrast, MPV sales were 145,900 units, down 13.8% year-on-year, and the cumulative sales from January to June were 979,800 units, down 17.3%, showing a trend of overall failure.

In the face of this continuous decline, what is the story behind the MPV market's fatigue? Why are there still some people "running" against the trend? In the second half of the year, will there be new highlights in the MPV market performance?

Wuling Hongguang, the "magic car", fell 28.5% in June, which was a sad day for the company

Why has the MPV market been weak in recent years? This is closely related to the failure of domestic brands in this field.

In the MPV sales rankings in the first half of this year, the "magic car" Wuling Hongguang sold 30,004 units in June and 258,584 units from January to June, accounting for 26.4% of the total MPV sales in January to June. Although it still ranks first, it fell by 28.5% and 12.1% year-on-year respectively. Whether in June alone or from January to June, there is still a sense of melancholy under the halo of the top spot.

At the same time, Wuling Hongguang led to the "collapse" of the overall domestic brands, and it can be noticed that although other domestic brands on the list had individual year-on-year growth trends in June, they all experienced varying degrees of sales decline in the first half of this year without exception. This is also a "microcosm" of domestic brands in the MPV market.

At present, the MPV models on sale in the domestic market are polarized into entry-level MPVs and mid-to-high-end business MPVs. Relevant data shows that in 2016, the sales volume of Chinese brand MPVs accounted for 90.8% of the total sales volume of MPVs in my country, but these brands only occupy the "low-end market".

The decline in sales of most domestic brands, led by Wuling Hongguang, is also an important reason for the overall failure of the MPV market.

Joint venture MPVs are emerging

In stark contrast to the overall slump in the market, joint venture mid-to-high-end MPV models such as Buick GL8 and Elysion all saw significant growth in June and from January to June. Touran, which was not on the top ten list, sold 3,285 units in June, up 22.4% year-on-year. “The scenery is better here” has become the inner reflection of joint venture players.

Take Buick GL8 as an example, the sales volume in June was 11,957 units, a surge of 105.4% year-on-year; the sales volume from January to June was 65,296 units, a year-on-year increase of 82.2%. Its eye-catching performance is due to its years of intensive cultivation in the Chinese market. The brand image has been deeply rooted in the hearts of domestic consumers. Since the new model was launched last year, it has been in a hot-selling state.

According to official statistics, in the price range of 229,900 to 449,900 yuan, models priced above 250,000 yuan accounted for 59.6%, and models priced above 300,000 yuan accounted for 39.3%. At the same time, among the purchase proportions of the entire series, private purchases have exceeded 50%, an increase of 14% over the whole year of last year.

This at least shows that the consumer groups and demands of joint venture mid-to-high-end MPVs with large space, high appearance and comfortable riding are fundamentally different from those of domestic low-end MPVs that are mainly used for both commercial and cargo purposes, and they have shown huge advantages in the home MPV market.

According to relevant statistics, in June, high-end models, whether sedans, SUVs or MPVs, all performed well and strengthened across the board, which also indirectly shows that the trend of high-end consumption in the domestic market is becoming more and more obvious.

Will the ultimate development of MPV be SUV?

The main culprit that caused the collapse in MPV sales is the continued high fever in the SUV market. In stark contrast to the obvious decline in MPV sales, in June, SUV sales reached 720,800 units, a year-on-year increase of 17.7%; the cumulative sales from January to June reached 4.4137 million units, a year-on-year increase of 16.8%.

Behind the contrast is the overlapping functional requirements of SUVs and MPVs, which has triggered a chain reaction. Compared with MPVs, SUVs are similar in overall appearance and have roughly the same space utilization, but their appearance, interior, powertrain, and especially configuration are significantly better than most MPVs on the market. Previously, Cui Dongshu, secretary general of the China Passenger Car Association, also expressed a related view: "In the Chinese market, the ultimate development of MPVs will be SUVs."

The popularity of SUVs has directly suppressed both sedans and MPVs. And since the "two-child policy", the high density of 7-seat SUVs has made the SUV market even hotter, further eroding the market share of MPVs.

The new blue ocean of MPV market

So, does the MPV market, which is currently in a state of mourning, have no potential at all? In fact, in the increasingly fierce competition in the Chinese auto market, automakers will not give up any possible growth point, and even in the rapidly disappearing MPV market, they have still found the future explosion point.

According to industry insiders, "Most low-end domestic brand MPVs are priced below 100,000 yuan, while the starting price of mid-to-high-end joint venture brand MPVs is above 200,000 yuan, leaving a blank in the 100,000-200,000 yuan price range."

As we all know, the price range of 100,000 to 200,000 yuan is the ideal price range for ordinary consumers. The lack of products with core competitiveness at this price has gradually shifted the attention of car companies to this area.

According to incomplete statistics from Auto Headlines APP, domestic brands such as Geely, GAC Trumpchi and BYD will launch MPV models with a price of more than RMB 100,000 in the second half of the year, which will intensify the competition in this market segment. Among joint venture brands, Buick, which has made great achievements in MPVs, will also launch the GL6 model to further expand its market share. A new round of competition is about to begin.

In the second half of the year, there will be a more intense battle between independent and joint venture MPVs. However, facing the widespread market fatigue, the overall decline of MPVs, and the fierce competition from SUVs and sedans, who will win in the end? Who will be the biggest dark horse in the MPV market that is on the decline? Let's wait and see.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.