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News for June 30, 2022

RVs Taking Over China’s Roads and Parks

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A growing motorhome culture and expanding integration of campsites and scenic spots are becoming more prominent across China, according to a report.

China Automobile Dealers Association (CADA) said that the country’s RV market is creating stable growth in 2021 against the decrease of consumption stimulation during the pandemic.

CADA’s 2021 annual report showed RVs sold well in developed provinces like Jiangsu, Shandong, and Zheijang. Jiangsu ranked the highest in market share with over 10%. While Beijing and Suzhou sold more than 500 RVs in 2021, followed by Shanghai and Chengdu.

The RV market demand rose in spring, summer, and at the end of the year, showing relatively uneven development, according to the report.

The RV market was divided into motor homes, with sales amounting to 12,582 units in 2021 with a year-on-year increase of 43.2% and towable RVs with 3,543 units sold.

CADA said that despite towable RVs being unable to dominate the market, It shares strengths such as lower prices, spaciousness, and strong practicality.

Motorhomes are further segmented into three types: Class A, Class C, and  Class B. Consumers ordered 8,991 Class C motorhomes with bunk over cabs and 3,493 Class Bs in 2021, which is the opposite performance it had in 2018 when Class B outperformed the other. CADA said Class C motorhomes are expected to trend in five years.

“Class Cs and Bs are the main products in the market, and our Class B motorhomes topped the market share in the first two months this year,” said SAIC Maxus Automotive Co Ltd, China’s major RV provider. 

In 2021, the largest RV manufacturer in Asia, Maxus, sold 1,362 RVs, ranking first, followed by Yutong Group Co Ltd, which sold 1,311 RVs.

“Reliable quality, comprehensive services, and intelligent technologies are our keys to gaining the trust of customers,” a Maxus representative said.

The representative said that China’s economic growth is the fundamental driver for progress in the RV industry. The third consumption upgrade supported by information technology, an aging population, and personalized consumption help spur advances as well.

Experts said China’s RV industry has a short history that led to only a small market base, which can still help contribute to rapid growth along with the help of GDP growth and increased consumption capacity.

“Moreover, the rising tourism industry supported by encouraging policies serves as a large growth engine, boosting market demand and consumption. In turn, the growing market could expand employment and augment fiscal revenues of local governments, helping achieve common development,” said Zhang Xiang, a researcher at the Institute of Automobile Enterprise Management and Innovation of the North China University of Technology.

However, experts said there is still a gap between the domestic and Western markets.

According to Global Market Insight, the global RV market exceeded $70 billion in 2021 and is dominated by North America and Europe.

The European Caravan Federation said the North American RV market is the top player, accounting for $25 billion with over 600,000 RVs sold in 2021. Europe came second in market value, with Germany selling the most units with 106,138 units last year.

“The two markets also spearheaded ownership, covering 90 percent of global sales (20-24 million units) in 2020,” said Beijing-based Intelligence Research Group. 

RV ownership per thousand people in North America and Europe stands at about 30 and 15, respectively, while China is less than 0.2, suggesting significant market growth potential.

Zhang said countries like the United States have a lower population density to drive the industry, and cheaper for people to travel by RV rather than staying in a hotel.

Still, more efforts are needed to solve the problems and improve the domestic market.

According to Maxus, challenges include the country’s varied landscapes, environments, and climates that put a greater demand on RV performance. Poor after-sales service system and insufficient campsite infrastructure also need to be addressed.

Diversifying products, integrating campsites with scenic spots, and building more retail stores are recommended to improve the market. However, experts said traffic restrictions based on license plate numbers and height hinder the development.

Policies are being created to address the problem. The 14th Five-Year Plan (2021-25) for the development of cultural and tourism sectors said self-driving trips several times. It urged the industry to advance in different facets by building an overall RV-centric tourism industrial chain, new campsites and tourist centers, and enhanced related manufacturing technologies.

The plan also called for the Ministry of National Resources and the Ministry of Industry and Information Technology to support campsite establishment and facility production.

CADA said companies of all sizes could play a crucial role in the market as it grows.

“In short, the industry needs to promote van life culture, infrastructure, industrial policies, production and marketing in sync to achieve sustainable growth,” said Bai Wenxi, chief economist at IPG China.

CADA said China’s RV market could embrace great opportunities to become a larger and more industrialized sector as demand grows and further support is being given.

“The market is promising thanks to positive trends unfolding in many fields. Youngsters, especially Gen Z, will dominate consumption. Products will be diversified, and the supply chain improved. The new energy vehicle market will provide opportunities for RV market growth. And Internet+ will promote van life culture more deeply and quickly,” said the Maxus representative.

This article originally appeared on China Daily.

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