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Bigger Is Better: SUVs and CUVs Rule the Road in China

A family takes delivery of their new Ford Focus at a dealership in Chongqing, China.
Meghan Reeder | CNBC
A family takes delivery of their new Ford Focus at a dealership in Chongqing, China.

Tuesday afternoon at the Hongqing Anfu Ford Dealership in Chongqing, China and the SUV showroom is buzzing. A steady stream of potential buyers are looking at the Ecosport CUV and Kuga SUV.

"I like how big it is," said one buyer after he opened the rear gate of a Kuga.

He's not alone. China has fallen hard for utility vehicles. Last year, sales of sports utility vehicles jumped 20.8 percent, outpacing the overall auto sales rate in the U.S.

"The people want to sit up high, see the road, have the spirit of adventure" said Wesley Liu, who oversees Changan Ford dealerships in China.

A Ford Kuga rolls off the assembly line at the Ford plant in Chongqing, China.
Meghan Reeder | CNBC
A Ford Kuga rolls off the assembly line at the Ford plant in Chongqing, China.

Like the U.S. Twenty Years Ago

Drive around China in 2013 and you'll notice how much it looks like the U.S. Gone are the days when bicycles ruled the road. Heck, gone are the days when you saw even a smattering of bikes sharing the road with small cars.

Today, you are as likely to see an SUV or crossover on the road as you would be driving around the U.S.

Last year, one out of every five vehicles sold in China last year were SUVs.

"It reminds me of the mid-1990's in the U.S., SUVs are just taking off," said Greg Brown, Ford Plant Manager Advisor in Chongqing China. Brown's Ford plant builds the Kuga crossover, the Chinese version of the Ford Escape CUV sold in the U.S.

"The young professionals, want what Americans have. Not only the functionality, but the attitude and image as well," said Brown.

Cars roll down the assembly line at the Ford plant in Chongqing, China.
Meghan Reeder | CNBC
Cars roll down the assembly line at the Ford plant in Chongqing, China.

Smooth Rides, More Space

One reason some Chinese buyers have embraced SUVs is because of how they handle rugged roads in rural China. While the streets in and around cities like Shanghai and Beijing are smooth and in good shape, it's a different story in the rural countryside.

"When you get into remote areas, you'll get some uneven or rough roads, so they want to have the confidence of getting there," said Brown. That factor is especially crucial as more Chinese leave rural areas and move to urban areas. When they drive home to see those relatives or friends they left behind, it's a more enjoyable ride in an SUV.

But just like Americans, most Chinese will primarily drive the SUVs in and around cities, often in heavy traffic.

So why would they buy an SUV for that type of driving? For the same reason Americans buy SUVs: they want more space.

Cars sit ready for delivery at a Ford dealership Chongqing, China.
Meghan Reeder | CNBC
Cars sit ready for delivery at a Ford dealership Chongqing, China.

Cash Is Still King

At the Hongqing Anfu Ford Dealership a shiny new Kuga sat outside the main showroom with a bow on the hood, waiting to be picked up by its new owner.

New car deliveries are an occasion in China, complete with the dealer shooting confetti into the air.

While a growing number of buyers will finance their new car or SUV with an auto loan, the vast majority still pay cash.

Liu said 20 percent now finance their new purchase. "5 years ago, fewer than 5 percent used financing. That's slowly changing," said Liu.

—By CNBC's Phil LeBeau; Follow him on Twitter @LeBeauCarNews

Questions? Comments? BehindTheWheel@cnbc.com

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