Auto Companies Banking on New Demand for Mini Vans Owing to Relaxation of One Child Policy in China

Multipurpose vehicles (MPVs) or mini vans were showcased hugely at the Guangzhou auto show and Volkswagen AG unveiled a super sized Touran model. GAC Motor, the Guangzhou Automobile Group subsidiary also showcased a mini-van prototype.


Automobile companies are betting heavily on mini vans becoming the next big star in the Chinese automobile market. This is being attributed to the relaxation of the one child policy by Beijing. Companies are hoping demand will rise for these larger variants of premium SUVs. These seven seater vehicles currently occupy only 10% of overall car sales in China. However, sales are rapidly picking up and growth percentages are higher than that of the entire market combined. According to industry sources, Chinese customers are steadily growing an appetite for these larger cars. Extended families often stay together in China and this can turn it into the biggest market for MPVs post the United States which has always been a favored market.


The one child policy was relaxed by October end but authorities hope to boost the population to 1.45 billion by 2030 from the 1.37 billion tallied by 2014 end. The two child policy will strengthen market share of MPVs and 7 seater SUVs according to industry sources. Sales figures for MPVs grew by 7.8% in the first 10 months of 2015, outstripping 1.5% growth of the entire passenger car market. MPV companies now have to newly focus on Chinese families instead of catering to companies desiring luxurious and super sized models for top executives or businesses that need these to carry staff and vehicles.


Many Chinese households include grandparents and other extended family members. Taking restrictions on owning second cars in many cities will lend an advantage to MPVs in comparison to five seater SUVs that currently occupy the major chunk of all passenger car sales. Owning two vehicles is a costly proposition in China and hence the growing demand for seven seater vehicles according to industry experts. GM and partners currently tally more than half of all sales of MPVs in China. The Wuling Hongguang minivan is a top seller along with the Baojun 730 MPV.


GAC and Geely Automobile Holdings are both toying with the idea of introducing min vans into the market. Chinese customers are now choosing utility over status needs. These are factors that should certainly boost demand even more for MPVs in the near future.


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