Chinese compact vehicles suffer market shrinking with POLO, Fit sales sliding

Following the Peugeot 207 and Citroen C2 two compact vehicles stopping producing, anther one Mazda 2 from Changan Mazda also have been suspended production in May out the production structure adjustment. The highest monthly sales of compact vehicles reached 194,500 units in 2004, while vehicles of this size haven’t sold well with July sales of 91,000 units.

Many popular compact vehicles including VW POLO, Honda Fit, Hyundai Verna, Buick Sail and Kia K2 used to easily gain high monthly sales of ten or twenty thousand units, which indicates the popularity of compact vehicles. But, most of them can hardly sold over ten thousand units and some even sold several thousand.

In terms of compact vehicle of the joint venture brands, though they suffered sales slump, the sales remains around ten thousand. The sales slide is mainly contributed by sales surge in compact SUV of Chinese domestic brands and the price reduction of the general compact vehicle market.

DR 3 compact SUV costs 73,900 to 98,900 yuan and Lavida 1.6L cost at least less than ten thousand yuan. These price is lower than or close to some compact vehicles’ price. On the other hand, compact vehicles of domestic brands suffered pervading sales slump. Automakers shifted almost all the focus on SUV models and cut the promotion of compact vehicles. Their market has been squeezed by more pragmatic small vehicles of lower price like Hongguang.