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Market “on drugs,” time for “medication” to stop?

“Crazy” or “strange” probably would be an understatement to describe what has transpired in the industry toward last few remaining months of 2016.

All kinds of sales records were shattered as many carmakers had already reported sales exceeding 2015 totals or significantly surpassing sales targets for 2016 long before December arrived.

Sales of November passenger vehicles (cars, MPVs and SUVs), for example, hit an all-time record high of 2.38 million units, up 22 percent year-on-year, according to data released by China Passenger Car Association (CPCA) on December 8. Sales through to November had already surpassed 20 million units, more than the 2015 total.

Great Wall Motor sold a mind-boggling 70,000 units of its star model – the H6, by far the country’s top-selling SUV, in November. That comes after consecutive months of sales of over 50,000 units. Just to put it into perspective, only a handful of carmakers sell that many vehicles in a single month, let alone one model! The company, which recently launched the WEY luxury SUV brand, will become the first Chinese carmaker to sell more than 1 million vehicles and earn more than ¥10 billion ($1.47 billion) in profit in a single year.

Then there is Geely, which sold more than 100,000 vehicles in a single month for the first time ever, with six models topping the 10,000-unit sales mark. GAC Motor sales through to November went through the roof, more than doubling previous year’s mark thanks to its star SUV – the GS4, while SAIC Motor’s Chinese brand passenger vehicle arm got a major boost thanks to the RX5 that now sells more than 20,000 units a month within just a few months hitting the market. Chery had its best sales month on record in November with sales of over 86,000 units.

In the luxury segment, Mercedes-Benz sold more vehicles in the first 10 months than it did entirely in 2015, fast closing its gap with both Audi and BMW, while second-tier brands such as Cadillac, Volvo, Jaguar Land Rover and Lexus are all seeing sales either surpassing or inch closer to that magic 100,000-unit plateau.

First-tier passenger vehicle JVs such as SAIC-Volkswagen, SAIC-GM and FAW-Volkswagen are approaching annual sales of close to 2 million units. GAC-FCA, thanks to localized Jeeps, saw sales through to November more than quadruple.

Even new brands that were launched within the year such as Hanteng Auto, SWM Motors and Borgward saw crisp sales with monthly sales in the 5,000-unit range.

If you produced a car, it was sold. It was that simple. Add the recent quarrel between Audi and dealers over its pending tie-up with SAIC Motor, new brands and “internet carmakers” popping out of nowhere and “fraudulent” OEMs cheating over new energy vehicle subsidies, we’ve just had a pretty weird year for the industry.

Shen Jinjun, president of China Automobile Dealers Association (CADA), offered an interesting analogy at a recent forum: the policy-driven market is like a person needing medication to standup and walk.

None was more evident in 2016. Time for the “medication” to end so that the market can “walk” on its own?

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Market “on drugs,” time for “medication” to stop?

“Crazy” or “strange” probably would be an understatement to describe what has transpired in the industry this year especially over the remaining few months.

All kinds of sales records are being shattered as many carmakers had already reported sales exceeding last year’s totals or significantly surpassing sales targets for this year long before December arrived.

Sales of November passenger vehicles (cars, MPVs and SUVs), for example, hit an all-time record high of 2.38 million units, up 22 percent year-on-year, according to data released by China Passenger Car Association (CPCA) on December 8. Sales through to November had already surpassed 20 million units, more than last year’s total.

Great Wall Motor sold a mind-boggling 70,000 units of its star model – the H6, by far the country’s top-selling SUV, in November. That comes after consecutive months of sales of over 50,000 units. Just to put it into perspective, only a handful of carmakers sell that many vehicles in a single month, let alone one model! The company, which recently launched the WEY luxury SUV brand, will become the first Chinese carmaker to sell more than 1 million vehicles and earn more than ¥10 billion ($1.47 billion) in profit in a single year.

Then there is Geely, which sold more than 100,000 vehicles in a single month for the first time ever, with six models topping the 10,000-unit sales mark. GAC Motor sales through to November went through the roof, more than doubling last year’s levels thanks to its star SUV – the GS4, while SAIC Motor’s Chinese brand passenger vehicle arm got a major boost thanks to the RX5 that now sells more than 20,000 units a month within just a few months hitting the market. Chery had its best sales month on record in November with sales of over 86,000 units.

In the luxury segment, Mercedes-Benz sold more vehicles in the first 10 months than it did entirely in 2015, fast closing its gap with both Audi and BMW, while second-tier brands such as Cadillac, Volvo, Jaguar Land Rover and Lexus are all seeing sales either surpassing or inch closer to that magic 100,000-unit plateau.

First-tier passenger vehicle JVs such as SAIC-Volkswagen, SAIC-GM and FAW-Volkswagen are approaching annual sales of close to 2 million units. GAC-FCA, thanks to localized Jeeps, saw sales through to November more than quadruple.

Even new brands that were launched within the year such as Hanteng Auto, SWM Motors and Borgward saw crisp sales with monthly sales in the 5,000-unit range.

If you produced a car, it was sold. It was that simple. Add the recent quarrel between Audi and dealers over its pending tie-up with SAIC Motor, new brands and “internet carmakers” popping out of nowhere and “fraudulent” OEMs cheating over new energy vehicle subsidies, we’ve just had a pretty weird year for the industry.

Shen Jinjun, president of China Automobile Dealers Association (CADA), offered an interesting analogy at a recent forum: the policy-driven market is like a person needing medication to standup and walk.

None was more evident this year. Time for the “medication” to end so that the market can “walk” on its own?

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