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Auto Shanghai: Spotlight on massive market

By Patrick Whiteley (China Daily)
Updated: 2011-04-19 15:20

Millions of new and aspiring Chinese car owners are fueling historic developments in the automotive world. [Photo / China Daily]

Allure generates gathering of global giants and new designs

When the last Auto Shanghai was held in 2009, China had become the No 1 global car market for the first time - just as the world teetered on the brink of economic collapse.

Oh, how times change. In just two years the global economy has managed to crawl back to life and a new hope has dawned. But one factor remains the same: China's status as the car king of the world.

The nation's passenger vehicle market ended last year with a remarkable 59 percent sales increase, thanks to a central government stimulus package and unbridled motoring passion among the people.

Tax cuts on small-displacement vehicles, subsidies for trade-ins and handouts to farmers helped drive sales.

But the measures have now stopped and carmakers face new challenges. There will be growth, there always is in modern China, but not at the dizzying levels of previous years.

Automobile industry consulting firm Sinotrust predicts that vehicle sales will grow 15.2 percent in 2011. If one only looks at the increasing number of Chinese drivers, it is obvious that natural demand will continue to expand over the next decade.

According to the Ministry of Public Security, almost 200 million Chinese people can drive and millions more are signing up for lessons.

Many new or aspiring drivers want to know about every nut and bolt in their dream car and there is no better place to find out than Auto Shanghai, the biggest motoring event in China this year.

In 2009, 1,500 exhibitors from 25 countries and regions participated and nearly 7,300 journalists reported from the expo. This year's show is bigger than ever with about 60 world premieres, more than double than the New York Motor Show underway at the same time.

The two overlapping important car shows has become a nuisance for global car companies, and Audi said it was especially miffed. The German carmaker has had to send two sets of executives to competing auto shows on the same days on opposite sides of the world.

As a sign of the Shanghai show's international importance, Audi is sending its US executives to New York and its global leaders to the expansive displays in Shanghai.

The 2011 show's massive footprint at the Shanghai New International Expo Center is another indication of the nation's car mania - it has grown to more than 200,000 square meters this year.

'From China for China'

The exhibit space for BMW alone is expected to cover 3,700 sq m as the German luxury carmaker launches a new plug-in hybrid variant.

BMW boss Norbert Reithofer says the long-wheelbase 5 Series plug-in hybrid will be the company's "e-car from China for China".

Another German auto icon, Volkswagen Group, is expected to showcase all nine of its brands,including the SEAT from Spain for the very first time in China.

SEAT has had it a bit tough in Europe and is looking for a new start in China. Its Leon and Ibiza models will spearhead the brand's entry with budget cars pitched to a younger market.

Another interesting newcomer is Yulon, the largest auto manufacturing conglomerate in Taiwan.

Last year it teamed with Dongfeng to make the Luxgen brand. In Shanghai the partnership will unveil the Neora, an intelligent electric concept car, the Luxgen 7 CEO, a luxury model, and the Luxgen 7 SUV, a vehicle slated to soon begin mass production.

The new venture will kick off production and sales this year and aims to sell 240,000 cars in 2014. By 2018, the company wants to sell 500,000 units a year from a product lineup of up to 12 different models.

Auto Shanghai's theme is innovation, which was the operative word for French auto giant PSA Peugeot Citroen in 2010.

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In the past it made the mistake of underestimating the market and not giving China its best cars. But that changed with the introduction of the Citroen C4 and C5 hatches, the Peugeot 307 and 308, and the upgraded 207.

Milestones, supercars

At Shanghai, PSA is making a special statement by revealing its forthcoming Concept SUV, a milestone for PSA because it was developed by Citroen's new R&D center in China staffed entirely by local designers.

The Shanghai show has a special luxury car display area to house Rolls Royce, Bentley, Lamborghini, Aston Martin and the rest.

Perhaps one of the biggest head turners will be new Ferrari FF, which makes its debut in China. Ferrari did spectacular business in China during 2010 - selling 300 cars, an increase of 50 percent over the year before - and the FF will help spur on its 2011 sales campaign.

General Motors is using Shanghai to plug one of its favorite stars - the Chevrolet Camaro (or Malibu in the US). Chevrolet's and GM's best-selling car in the US in 2010 with almost 200,000 in sales, it will be called the Kemailuo in China.

All the local brands will also be represented.

BYD, backed by Warren Buffett, is launching its S6 SUV. The Shenzhen-based carmaker registered major growth in 2008 and 2009, but last year expanded its dealership network too fast and sales failed to materialize, despite many dealers hanging pictures of Mr Buffett in their showrooms.

But BYD has turned a corner with some brilliant technology in the electric and hybrid cars that will be on show. Fruits of the labor still need time to ripen, so to keep up with current trends, its SUV should prove a winner.

SAIC is China's biggest carmaker and has some of the best motoring brains in the business.

Chang'an Auto recently hired Ma Zhengkun, SAIC's chief designer, and it seems he has been very busy. One of its new concepts for the show will be the Voss MPV concept, a six-seater with gull wing doors.

Auto Shanghai is a landmark event with too many cars to mention, but in car-mad China, it appears too many cars are not enough.

The author is a China Daily senior editor.