Shanghai showdown for carmakers
China’s up-and-coming carmakers unveiled a smorgasbord of new vehicles on Monday at Shanghai’s car show, from compacts and electric vehicles to the biggest, brassiest SUVs and luxury sedans, manoeuvering to upstage their global rivals in the world’s only major growing market.
There was scant hint of the gloom prevailing elsewhere: Shanghai’s show opened with the usual armies of models clad in glittering evening gowns or skimpy skirts, rock bands and other razzmatazz.
Overall, the mood among China’s homegrown carmakers seemed jubilant: after all, sales hit a monthly high of 1,1-million in March, outpacing United States sales for the third straight month despite double-digit declines in most other markets.
“I have only three words: excited, excited, excited!” Zhang Xiaoyu, chairperson of the Association of China Auto Engineering, said at a launch event by Geely Automobile Holdings.
“After only 18 years of development, we may become the world’s leading car market,” he said.
From battery-making upstart BYD Auto to sports and luxury carmakers such as Porsche, carmakers everywhere are zeroing in on China, the world’s second largest market, as they struggle through hard times elsewhere.
China’s domestic automakers are nowhere close to meeting US, European and Japanese standards in most respects.
But they’re working hard enough and expanding fast enough to have industry leaders looking over their shoulders.
“The Shanghai show is certainly one of the most important shows in the world now,” said Nick Reilly, president of GM’s Asia-Pacific division. “It shows the size and breadth of the competition here.”
After attempts to export to European markets fizzled several years ago, homegrown manufacturers such as Geely returned to the drawing board, improving designs, engines, transmissions and platform.
“They made some very hard decisions, to scrap their old vehicles and shift to some new ones” said Yale Zhang, a Shanghai-based analyst with CSM Worldwide. “After two years of hard work they are in much better shape.”
Both domestic and foreign manufacturers have been expanding their product offerings to span the spectrum from lower-end compacts to the raciest, plushest luxury models: only with a full range do they expect to thrive in this hyper-competitive market.
Chinese carmakers, still unable to successfully challenge their foreign rivals in affluent Western and Japanese markets, are striving to bring quality up to snuff, while also going after the small-car market where their home player status gives them cost and distribution advantages.
Geely brought six new models, including what it called a “large business limousine,” its first city SUV and an economy model that it says is an “international standard” small family car.
“We had a lot of difficulties. Now we are trying to overcome them,” said Geely’s chairperson Li Shufu.
“I promise that Geely is doing the best it can to transform itself,” he said.
Chery Automobile, another homegrown manufacturer, introduced its Riich and Rely new premium models—aiming to move up market after building its business mainly on sales of smaller cars such as the popular QQ minicar.
“Chery is ready to meet the challenge of the global market.
We’ve succeeded in launching four brands of new cars this year,” declared Chery’s president, Yin Tongyao. “You can be sure Chery will have a bright new future.”
Porsche kicked off the show on Sunday night by unveiling the Panamera, the German carmaker’s first foray into the luxury sedan segment. It said its decision to reveal the vehicle in China signals the rising importance of the country’s car market.
“This is a clear signal that we count on these markets and have full confidence in their future economic potential,” Porsche chief executive Wendelin Wiedeking said in a statement.
Like the company’s Cayenne SUV, the new four-door Panamera will be built at Porsche’s plant in Leipzig, Germany. It will be entering the market in Europe, South America and parts of Asia in September 2009, in North America and Australia in October, and in China in early 2010.
It’s a far cry from decades past, when vehicles such as the VW Santana, a 1980s model made by Volkswagen AG’s joint venture with Shanghai Automotive Industry that remains the staple of Shanghai’s taxi fleets, were among the few choices on the market.
China managed to revive sales after a late-2008 slump with tax cuts and rebates that have resulted in small vehicles being driven out of showrooms nearly as fast as companies can make them.
While its surge to the forefront of the industry mainly reflects deteriorating conditions in the US and elsewhere, the gravitational center of the world car market clearly has shifted to China and other emerging markets.
BYD, which has attracted investment from Warren Buffet, introduced only one new model, the M6 multipurpose vehicle, but it had plenty of its latest electric and conventional fueled cars on show, including its plug-in hybrid F3DM—the first to begin mass production anywhere.
“I think Mr Buffett’s investment has helped BYD to become better known to people on the other side of the world,” said Paul Lin, a company spokesperson.
He said the company, whose F3 conventional sedan was the 10th best-selling car in China last year, was getting many inquiries from foreign companies looking to cooperate with its electric vehicle technology.
BYD is sticking by its plan of selling an electric vehicle in the US market by 2011.
“But details are still under the discussion,” he said.—Sapa-AP