As a result, the firm continues to forecast growth for the SUV segment in China, with local production volume continuing to rise, although the rate of growth is forecast to slow

Data from the China Association of Automobile Manufacturers (CAAM) shows that the Chinese market for locally produced vehicles continues to see growth. However, the growth rates are in the single digits, with the overall market's rate of production growth at 5.3% in the first quarter, propelled by the demand for passenger vehicles, which rose by 9% in the quarter. It should be noted that CAAM data refer only to wholesale vehicle production and sales. This means that sales reported by the CAAM are vehicles that have been moved from the automakers' production bases to dealerships. CAAM data also only include models that have been locally produced and sold in China; the data do not include imports.

The SUV segment continues to bring in growth rates, while the overall largest volume segment continues to be the sedan segment, though this is witnessing a declining growth rate. With the SUV segment's double-digit growth, automakers are rapidly trying to expand their presence in the segment by offering more products for Chinese consumers.

IHS added that another developing trend in China is the strong government push to strengthen the new energy vehicle (NEV) segment. Automakers are, therefore, often looking to supply these with new products. The Shanghai Motor Show will be the launchpad for a number of SUVs and some of these will be NEV variants, so meeting both trends. Mitsubishi, for instance, has also announced it will display PHEV concept SUVs at the exhibition, while Citroën is to show the Aircross PHEV SUV concept. Meanwhile, long-wheel-base (LWB) sedans have long been a strongly selling product in China, and automakers are now combining these LWB models with alternative powertrains in order to appease the government. Cadillac, for instance, is to introduce its CT6 PHEV sedan at the show.

IHS Automotive continues to forecast overall growth for the SUV segment in China, although growth rates are slowing. In 2014, China's SUV production rose 36.72% y/y to 4.32 million units. This year, the company forecasts China's SUV production levels to rise by around 22.5% y/y; however, SUV production growth will then begin to slow. Double-digit growth in SUV production is forecast to continue to 2017, when SUV production levels in China are expected to hit over 6.6 million units per annum (upa). From 2018, production growth rates are predicted to slow to single digits, although output will reach more than 7.04 million upa.