SGMW Hongguang is the first model of a new segment invented to fit Chinese consumers’ practical needs. Its sales easily eclipsed the combined volume of a dozen of other models.
SGMW Hongguang （上汽通用五菱宏光）is the best performing Chinese car model in the global best-selling auto model ranking. Its sales reached more than 530,000 units in 2013, which was next to only Ford's F-series (763,000 in the United States) in terms of best-selling models in a single market. However, in the first quarter of this year, Hongguang's sales in China continued to grow to more than 210,000, while F-series sold just about 173,000 units in US. It is very likely that Hongguang might have been the world's best-selling car model in 2014.
Back in September, 2010, when Hongguang was first launched, not many people paid attention to it. This new model was developed from the usual front-engine rear-wheel-drive one-box minivan construction. Hongguang moved the engine from under cab-floor to the front of body and hence became a two-box configuration. To everyone's surprise, Hongguang's monthly sales easily eclipsed the combined sales of a dozen of other models. It also staked a Chinese automaker's claim in the global best-selling model ranking.
Following Hongguang's success, many Chinese automakers launched FR minivans with similar constructions, such as Changan Honor（长安欧诺）, Dongfeng Fengguang（东风风光）, BAIC Motor's WW M20（北汽威旺M20）. In March, the combined sales of the abovementioned models, together with FAW Xenia （森雅）which was launched earlier, exceeded 100,000 units. The new FR two-box sedan has become an important segment in China's auto market.
The success of Hongguang comes from its minivan platform, which is a perfect fit for Chinese consumers' practical demand.
China is a big developing country and economic growth is the pivotal issue of the society. One of the characteristics of today's China is that we have numerous small and micro businesses as well as small amount transactions. Some industries are highly fragmented, and business owners often mix their work with life. Besides, China has a vast territory but road work is not well developed in many areas. There is a huge demand for a car model which has powerful weight capacity, large space, strong trafficability, low maintenance cost and can be used for both passenger and goods transportation purposes. Minivans and light vans emerge as preferred model for many Chinese consumers because of the versatile capability of their body and chassis. Hence China becomes the world's largest market for minivan and light vans, which accounted for about 40% of the segment's global sales.
Against the backdrop of strong market demand, plus automakers' sophisticated R&D in this sector, China is leading the world in minivan's R&D, manufacturing quality control, cost control, supply chain, and marketing. Chinese automakers have become the pacesetters of global minivan industry. Because Chinese companies have huge advantage in this segment over multinational companies, such as GM, Volkswagen and Toyota, China is now the main minivan technology exporter.
The robust chassis of minivan and light van has also given automakers a good foundation to develop other models. Huge market potential, rich experience and unique characteristic of the chassis have offered more opportunities for innovation. SGMW has developed a MPV product line based on Hongguang minivan. BAIC Yinxiang（北汽银翔） launched two SUVs (S2 and S3) based on the FR minivan platform, which expanded the platform's usage into SUV sectors and pulled the price of 7-seat SUV to 60,000 yuan. We can expect some very interesting follow-ups from this move.
Japan's Daihatsu is the most well-known foreign automaker chasing the same technology path. It has developed several front-engine rear-wheel-drive two-box sedans based on various minivan platforms, the most typical models being Terios （特锐）and Xenia. Unfortunately they didn't sell well in China due to marketing reasons. Though Chinese and Japanese automakers have totally different performances with their minivans, they are heading towards the same direction: build a popular car model which is versatile, has low production and maintenance costs, and can sell globally.
TNS Sinotrust believe that the front-engine rear-wheel-drive two-box sedan platform is the best mini vehicle and light vehicle technology path for automakers in developing countries. It is also Chinese auto companies' best answer to multinational automakers' "cheap car" strategy in the global competition.