SUV Booms Fades in China

SUV/crossover vehicles, which have outsold conventional sedans in China since 2012, have fallen behind this year, Bloomberg News reports.

The new service, citing economic data provider CEIC, says SUV sales peaked at half the market at the beginning of 2018 but have receded to about one-third today (chart). Demand for such vehicles, which surged 44% in 2017 and 17% last year, shrank 8% in July. Deliveries of sedans slipped only 1% in July.

Over the past two years and into 2018, carmakers have added new SUV/crossover models at a faster pace than market demand requires, according to Nomura Holdings Inc. During the same period, the pace of new sedan introductions has trailed demand.

Bloomberg notes that foreign carmakers continue to dominate China’s sedan market, delivering good results in the process. In July, deliveries fell 6% for Chinese-brand vehicles,—including SUVs, but they rose nearly 8% for German brands.