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SUVs - China - February 2019

“Despite declined sales of SUVs, the ownership of SUVs surged more than ten percentage points over 2017 to 2018. Consumer interest in buying SUVs, especially mid/full-size SUVs, remains strong.”

– Terence Zhou, Research Analyst

This report examines the following issues:

  • What’s the future for domestic brands?
  • Fuel consumption challenge
  • Make driving compact SUVs a lifestyle for females

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this report
          • Figure 1: Definition of different monthly household income groups, by city tier
      • Executive Summary

          • The market
            • Figure 2: Best- and worst-case forecast of the market volume of SUVs, China, 2013-23
            • Figure 3: SUV sales volume share, by segment, China, 2016-18
          • Companies and brands
            • Only Haval lost share among the top 10 brands
              • Figure 4: Top 10 brands in SUV sales, by sales volume, 2016-18
            • Entry price further lowered
              • Figure 5: Starting price of top 10 best-selling SUV models, 2018
            • Localising manufacture and more electric models
              • Innovation highlights: extended range electric SUVs and more pet-friendly features
                • The consumer
                  • SUV ownership increased significantly in tier one cities
                    • Figure 6: Type of cars owned in tier one cities*, November 2018 vs December 2017
                  • Tier two and below: compact cars still lead in ownership but SUV is catching up
                    • Figure 7: Type of cars owned, in tier two or lower cities*, November 2018 vs December 2017
                  • Mid/full-size SUVs most wanted in tier one cities
                    • Figure 8: Type of car planning to buy, in tier one cities*, November 2018 vs December 2017
                  • German brands become more popular
                    • Figure 9: Favourite SUV brand, in tier one cities*, 2019 vs 2018
                  • Japanese brands are good at converting buyers in the purchasing journey
                    • Figure 10: Brand intended to buy, by intended SUV buyers at different purchasing stages, November 2018
                  • SUVs need better fuel consumption levels
                    • Figure 11: Unsatisfied point for SUV owners, November 2018
                  • Optimal pricings for SUVs
                    • Figure 12: Optimal prices of different types of SUVs based on Price Sensitivity Analysis, November 2018
                  • What we think
                  • Issues and Insights

                    • What’s the future for domestic brands?
                      • The facts
                        • The implications
                          • Fuel consumption challenge
                            • The facts
                              • The implications
                                • Figure 13: Comparison between hybrid versions and regular versions
                              • Make driving compact SUVs a lifestyle for females
                                • The facts
                                  • The implications
                                    • Figure 14: Jeep compass commercial
                                • The Market – What You Need to Know

                                  • SUV market showed resilience
                                    • SUV competition set to intensify
                                    • Market Size, Segmentation and Forecast

                                      • Annual sales set to linger around 10 million units over next five years
                                        • Figure 15: Best- and worst-case forecast of the market volume of SUVs, China, 2013-23
                                      • Trading up for mid/full-size SUVs in replacement/second car purchase
                                        • Figure 16: SUV sales volume share, by segment, China, 2016-18
                                    • Market Factors

                                      • Elimination of foreign share limit for joint ventures
                                        • Figure 17: Foreign share limit cancellation plan
                                      • Rising fuel price creates demand for new energy SUVs
                                        • Figure 18: Fuel price per litre, 2015-18
                                        • Figure 19: Volvo XC 60 Hybrid and Porsche Macan
                                      • Consumers’ spending preferences
                                        • Figure 20: Financial confidence, 2017-19
                                    • Key Players – What You Need to Know

                                      • Top ten is gaining more market share
                                        • Compete by giving consumers more choices
                                          • Innovations in the car usage experience
                                          • Market Share

                                            • Market becoming more consolidated
                                              • Figure 21: Top 10 brands in SUV sales, by sales volume, 2016-18
                                            • Key players in 2018
                                              • Figure 22: Haval F5 and H6
                                              • Figure 23: Geely S1, X3 and Emgrand GS
                                              • Figure 24: T-ROC, Tayron and Tharu
                                          • Competitive Strategies

                                            • Entry price of SUVs lowering further
                                              • Figure 25: Starting price of top 10 best-selling SUV models, 2018
                                            • Domestic production of high-end models
                                              • Figure 26: Domestic produced models
                                            • Electrification
                                              • Figure 27: Pure electric models coming in 2019
                                              • Figure 28: Plug-in hybrid vehicles
                                          • Who’s Innovating?

                                            • Extended range electric SUVs
                                              • Figure 29: CHJ Leading Ideal One
                                              • Figure 30: Interior design of CHJ Leading Ideal One
                                            • Noise-cancelling technology
                                              • Figure 31: Dog kennel from ford
                                            • Popscape
                                              • Figure 32: An Airstream trailer towed by a Tesla Model X
                                          • The Consumer – What You Need to Know

                                            • Ownership and purchase intention remain strong
                                              • Watch out for German and Japanese brands
                                                • Fuel consumption remains the biggest frustration
                                                  • Optimal pricing suggests room for price increase
                                                  • Type of Cars Owned and Planning to Purchase

                                                    • The ownership of SUVs surged in 2019
                                                      • Figure 33: Type of cars owned in tier one cities*, November 2018 vs December 2017
                                                      • Figure 34: Type of cars owned, in tier two or lower cities*, November 2018 vs December 2017
                                                    • Future purchase intention of SUVs remains strong
                                                      • Figure 35: Type of car planning to buy, in tier one cities*, November 2018 vs December 2017
                                                    • Non-first time car buyers switching to bigger, premium cars
                                                      • Figure 36: Type of car owned and planning to buy, by non-first time car buyers, November 2018
                                                    • Potential buyers for mid/full-size SUVs
                                                      • Figure 37: Type of car planning to buy – mid/full-size SUV, by selected demographics, November 2018
                                                      • Figure 38: Type of car planning to buy – mid/full-size SUV, by city tiers, November 2018
                                                      • Figure 39: Type of car planning to buy – Select items, by type of car buyers, November 2018
                                                  • Favourite SUV Brands

                                                    • German brands become more popular
                                                      • Figure 40: Favourite SUV brand, by tier one cities, 2019 vs 2018
                                                    • Favourite brands among SUV owners and intended buyers
                                                      • Figure 41: Favourite SUV brand – word cloud, November 2018
                                                      • Figure 42: Favourite SUV brand, November 2018
                                                    • Brands that consumers intend to buy
                                                        • Figure 43: Brand that consumers intend to buy, November 2018
                                                        • Figure 44: Gap between favourite brand and brand intending to buy, November 2018
                                                      • Japanese brands are good at converting buyers in the purchasing journey
                                                        • Figure 45: Brand intended to buy, by intended SUV buyers at different purchasing stages, November 2018
                                                    • Dissatisfaction about SUVs

                                                      • Fuel consumption is still the biggest complaint
                                                        • Figure 46: Unsatisfied point for SUV owners, November 2018
                                                      • Group most sensitive to fuel consumption
                                                        • Figure 47: Unsatisfied point for SUV owners – monthly household income, November 2018
                                                    • Perceptions of SUVs

                                                      • Perceptions reveal popularity of compact SUVs as a first car
                                                        • Figure 48: Correspondence Analysis – SUV advantages, Nov 2018
                                                      • Lifestyle pursuers of compact SUVs
                                                        • Figure 49: Perceptions of compact SUVs – can reflect my lifestyle, by gender and age, November 2018
                                                    • Optimal Pricing of SUVs

                                                      • Methodology
                                                        • Ideal SUV price according to consumers
                                                          • Figure 50: Price sensitivity – compact SUVs optimal price, November 2018
                                                          • Figure 51: Price sensitivity – compact SUVs threshold prices, November 2018
                                                        • Compact SUVs over RMB200,000 still stand a chance
                                                          • Figure 52: Price points that are considered as expensive but still would consider buying, by monthly household income, November 2018
                                                        • Optimal price for mid-size SUVs
                                                          • Figure 53: Price sensitivity – mid-size SUVs optimal price, November 2018
                                                          • Figure 54: Price sensitivity – mid-size SUVs threshold prices, November 2018
                                                        • Ideal price of full-size SUVs according to consumers
                                                          • Figure 55: Price sensitivity – full-size SUVs optimal price, November 2018
                                                          • Figure 56: Price sensitivity – full-size SUVs threshold prices, November 2018
                                                        • Pricing strategies for SUVs
                                                          • Figure 57: Optimal prices for SUVs, November 2018
                                                      • Meet the Mintropolitans

                                                        • MinTs are potential mid-size SUV buyers
                                                          • Figure 58: Type of car owned and planning to buy, by consumer classifications, November 2018
                                                        • More favourable towards German brands
                                                          • Figure 59: Brand that consumers intend to buy, by consumer classifications, November 2018
                                                        • MinTs are more demanding about vehicle dynamics and interior materials
                                                          • Figure 60: Unsatisfied point for SUV owners, by consumer classifications, November 2018
                                                      • Appendix – Market Size and Forecast

                                                          • Figure 61: The market volume of SUVs, 2013-23
                                                      • Appendix – Methodology and Abbreviations

                                                        • Methodology
                                                          • Fan chart forecast
                                                            • Abbreviations

                                                            SUVs - China - February 2019

                                                            US $4,460.00 (Excl.Tax)