Visitors gather at the 15th Shanghai International Automobile Industry Exhibition, yesterday. The auto expo runs from today to April 29 in Shanghai, and features some 1,300 autos including 111 cars that will have their premiere at the trade fair.
The rapidly growing Asian giant is crucial for foreign car makers, which now account for over half the Chinese market, as Europe battles a debt crisis and the US struggles to put its economic recovery on a firmer footing
AFP/Shanghai
Global car makers yesterday showed off hundreds of gleaming models in glitzy demonstrations ahead of the Shanghai auto show, as they compete for attention from the world’s largest market — China.
The rapidly growing Asian giant is crucial for foreign car makers, which now account for over half the Chinese market, as Europe battles a debt crisis and the US struggles to put its economic recovery on a firmer footing.
“China is by far now the world’s largest market and a driving force behind global industry growth,” said General Motors vice president for global manufacturing Tim Lee, ahead of the show’s official opening today.
GM sold 2.84mn vehicles in China last year, a record for the company, and will launch 17 new or updated models in the country this year.
The Shanghai auto show is expected to attract more than 800,000 visitors over the course of nine days and car manufacturers displayed their wares to hundreds of journalists yesterday.
A six-foot blonde model in a silver jumpsuit on the stand of German chassis technology company ZF competed for attention with a promotional team dressed as traditional Chinese soldiers at the sprawling venue in China’s premier Pudong development zone.
China became the world’s largest auto market in 2009. Last year, its auto sales reached 19.31mn vehicles, a 4.3% rise from 2011, according to a Chinese industry group.
Sales growth has moderated since 2010 as China’s economy slowed and as some Chinese cities put limits on car numbers because of concerns over congestion and pollution, but the country still offers better prospects than most parts of the world.
“Certainly, we have seen more dynamic times in China,” said Dieter Zetsche, chairman of the board of management for Germany’s Daimler and head of Mercedes-Benz Cars.
“But, on the other, hand there are still many reasons to believe in decent growth (in China),” he told journalists.
Japanese car makers’ sales in China have suffered since last year amid a political row over disputed islands that sparked street protests across the country and calls for boycotts.
Japan’s Nissan Motor, which unveiled a sporty “concept car” flanked by models in white dresses, said China remained its largest market with annual sales of around 1.2mn vehicles.
“We are confident about our prospects here and we will grow with China,” Andy Palmer, executive vice president of Nissan, told a news conference.
The rapidly growing SUV (sport utility vehicle) and premium car segments were on full display in Shanghai, as Chinese consumers look for more space and more luxury, executives said.
Mercedes-Benz launched a premium compact, the GLA, as it seeks to make it luxury cars more affordable to Chinese buyers.
And Ford Motor, which lags its US rival GM in China, said it planned more offerings for its luxury Lincoln brand in China.
“China will be the largest luxury car market in the world, bigger than Western Europe, bigger than the US,” said James Farley, executive vice president of global marketing for Ford. “So it’s important”.
Chinese auto companies were seeking to build brand recognition in a country where the modern auto industry dates back only three decades.
“It seems such a shame not to... find the inspiration to create something that is little different from the German cars, the Japanese cars, the American cars,” said Peter Horbury, vice president of design for China’s Geely group which launched a locally-developed “concept car”.
SUV casts cloud over green car
Chinese car maker BYD gave pride of place to its new S7 SUV at the Shanghai auto show yesterday while another of its models, a fully-electric vehicle, languished in a corner with only a handful of visitors.
The contrast is indicative of the battle in the auto sector with gas-guzzling SUVs blazing past green-energy cars despite state incentives to promote cleaner vehicles in a bid to tackle the country’s air pollution crisis.
The most popular cars are far from the most fuel efficient, undercutting an attempt by authorities to reduce auto emissions and fend off growing smog.
“Certainly in China, you have people who want to have a big car because big is still what matters here,” said Klaus Paur, Shanghai-based global director of automotive research at Ipsos.
SUV sales jumped 43.5% in the first three months of the year, outpacing the 17.2% growth seen for the entire passenger vehicle segment.
In an effort to promote new-energy vehicles, the Chinese government has offered buyers incentives as high as 60,000 yuan ($9,700) while Shanghai gives up to another 40,000 yuan, the state-run China Daily has reported.
But electric and hybrid car sales were a paltry 7,200 units in the first quarter of this year, according to industry estimates.
The trend does not bode well for Beijing’s goal of seeing 5mn alternative-energy vehicles on the road by 2020.
“Just like everywhere else in the world, China did not make any significant breakthrough” in this area, said John Zeng, head of the Asia-Pacific for LMC Automotive.
“Firstly, the infrastructure in not there, and secondly, the consumer mindset is not there.”
That four in five car consumers are first-time buyers is another factor which inclines consumers toward the traditional combustion engine, Zeng said.
At a preview of the Shanghai auto show for journalists yesterday, global carmakers unveiled SUVs and multi-purpose vehicles, among them Citroen of France, Germany’s Volkswagen, BMW and Mercedes, and Japan’s Honda.
The Chinese preference for traditional cars is not promising for the several electric models from domestic and foreign car makers which were also on display.
BYD, which once staked its future on electric cars, will launch its model next year but few visitors showed interest in the car yesterday, an attendant said.
“They are asking how much the government incentives will be,” she said.
Previous incentives to promote greener cars have not been as successful as hoped.
Chinese domestic auto giant SAIC Motor launched an electric vehicle, the Roewe E50, in November, but has only sold about 200 units, said Zhu Jun, head of the company’s technical centre.
The car was originally priced at 234,900 yuan but after subsidies goes for about 130,000 yuan.
But even those incentives are not enough, said Zhu. “This is already much more expensive than a conventional car of that size.”
