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February 6, 2017

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Mid-size SUVs complement family sizes,rising incomes

THE popularity of mid-size sport-utility vehicles is expected to continue this year as Chinese consumers — especially second-car buyers — weigh the advantages of handling ease coupled with larger interiors than standard sedans.

“We are optimistic about sales of mid-size SUVs in China this year,” said Zou Tianlong, China auto analyst with UBS Securities. “There is growing demand in the mid-size segment. We expect sales to reach 1.95 million units, up 30 percent from last year.”

In fact, the market share of mid-sized SUVs rose 3 percentage points to 17 percent last year, according to UBS Securities. In all, about 8.9 million SUVs of all sizes were sold last year, according to the China Association of Automobile Manufacturers.

There are several factors at play here.

As personal incomes rise, more consumers are considering replacing their old cars with new ones. That’s a major trend, considering that the boom of auto sales began in the 2000s, especially in coastal areas. Cars bought in the first part of the new millennium are beginning to get old.

The government’s new “two-child” policy also feeds into demand for mid-size SUVs, which have five or seven seats.

According to an auto survey by Nielsen and interviewing over 3,000 car buyers in November, more than one-fifth said they are considering having a second child.

“I want a mid-size SUV because I need more space now,” said Cecilia Chen, a 33-year-old car owner. “There are eight people in my family: my husband and me, our two young children and both sets of parents.”

Mid-size SUVs provide more storage space compared with sedans or compact SUVs. That’s a plus for families who want to take trips together.

“Consumer demand has changed, away from simply traveling from A to B,” said an engineer with a car company. “Chinese car buyers focus on space, driving experience and engine power. Considering those three factors, a mid-size SUV is ideal for them.”

In face of public demand, major automobile manufacturers are expected to roll out more mid-size SUV models this year.

SAIC Volkswagen unveiled its mid-size All New Tiguan L on January 18. Local media have reported that Great Wall Motor Co will launch a model called WEY W01 and Dongfeng Yueda Kia is going to release the KX7 in the first half of this year.

“We believe about 15 new mid-size models will be launched in 2017, and more than half of those new models are expected to sell well,” Zou said.


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