From the Desk of Mike (The Hammer) Garvin
They show off a smorgasbord of new vehicles — from compacts and electrics to the biggest, brassiest SUVs and luxury sedans
By Elaine Kurtenbach
The Globe and Mail
|Unlike other recent auto shows, there was no lack of glitz at the Shanghai show. (Photo: Peter Parks/AFT/Getty Images.)|
SHANGHAI — The Shanghai Auto Show, once a venue for the West to show off its cars to a country still relying on bicycles, is now a showcase for China's own industry.
China's up-and-coming auto makers unveiled a smorgasbord of new vehicles this week at Shanghai's auto show, from compacts and electric vehicles to the biggest, brassiest SUVs and luxury sedans, manoeuvring 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 car makers seemed jubilant: sales hit a monthly high of 1.1 million in March, outpacing U.S. sales for the third straight month and a far cry from the double-digit declines in most other markets.
"I have only three words: Excited, excited, excited!" Zhang Xiaoyu, chairman 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 auto market."
From battery-making upstart BYD Auto to sports and luxury car makers like Porsche, auto makers everywhere are zeroing in on China as they struggle through hard times elsewhere.
China's domestic auto makers are nowhere close to meeting U.S., 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 like 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 auto makers, 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.
Chery Automobile Co. introduced its Riich and Rely new premium models — aiming to move upmarket after building its business mainly on sales of smaller cars such as the popular QQ mini.
Porsche kicked off the show on Sunday night by unveiling the Panamera, its 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 auto market.
"This is a clear signal that we count on these markets and have full confidence in their future economic potential," Porsche chief executive officer Wendelin Wiedeking said.
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 like the VW Santana, a 1980s model made by Volkswagen AG's joint venture with Shanghai Automotive Industry Corp. 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 U.S. and elsewhere, the gravitational centre of the world auto 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 fuelled cars on show, including its plug-in hybrid F3DM — the first to begin mass production anywhere.
A BYD spokesman 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 co-operate with its electric vehicle technology.
BYD is sticking to its plan of selling an electric vehicle in the U.S. market by 2011.
"But details are still under the discussion," he said.
23 April 2009 — Return to cover.