Last year's Guangzhou auto show. Almost all global and domestic carmakers will show their best at the 2011 event, as the once-torrid market registered just 3 percent sales growth in the first 10 months of the year. [Photo / Xinhua]

 

Year-end auto show reflects the fierce competition as market cools

GUANGZHOU - While the domestic market has slowed after blistering growth over the previous two years, automakers from both home and abroad are still in top gear at the annual year-end auto show in Guangzhou.

The 9th China (Guangzhou) International Automobile Exhibition, one of the nation's top-three auto shows, opened today and runs until Nov 28.

With almost all the major players in the industry participating with displays covering 180,000 square meters, the show is bigger than ever.

According to the organizing committee, exhibitors will hold 56 press conferences on media day today and almost every brand will have its senior executives present, illustrating the nation's rank today as perhaps the most important market globally.

China has been the world's largest auto market since 2009, when full-year sales soared 46 percent to 13 million units thanks to favorable policies from the government including tax rebates for small cars. The momentum continued in 2010 as sales jumped more than 32 percent to 18 million vehicles.

But as government stimulus programs expired, growth slowed sharply in 2011 to 3 percent. Vehicle sales totaled 15 million units in the first 10 months, according to China Association of Automobile Manufacturers.

Statistics from the association showed that the overall market numbers have been affected by sluggish commercial vehicle sales that declined 5 percent in the first 10 months. Passenger vehicle sales still increased by 6 percent, though the growth is far less striking than in previous years.

Analysts said that the market is in "normal deceleration" after two years of explosive expansion and remains healthy and promising in the long run.

Both market research firms IHS Automotive and JD Power-LMC predict that year-on-year growth in light vehicles sales in China will climb to around 10 percent next year from less than 5 percent this year and keep increasing in 2013 as customer demand remains strong.

Betting on the future

Betting on the tempting future growth, automakers are bringing their best and latest models at the biggest auto show in South China.

Volkswagen, the leading foreign carmaker in China, has a 3,000 sq m booth to display 30 models under its namesake brand, including the new Sharan, Sagitar and Cross Polo that are making their debuts in China.

Hyundai-Kia Automotive Group, a dark horse in Western auto markets and also in China, is showcasing 36 models, its biggest fleet ever in Guangzhou. Its Hyundai i40 and Kia K2 hatchback will premiere at the event.

Japanese brands also have big presence at the Guangzhou auto show. South China has long been seen as their home field, since Toyota, Honda and Nissan all produce vehicles at local joint venture plants in Guangdong province.

Toyota has a 4,000 sq m booth displaying 44 models from its own brand and the premium nameplate Lexus. Honda, along with its luxury unit Acura, has a stand about the same size in the exhibition hall.

German luxury brands Audi, BMW and Mercedes-Benz are also bringing exciting models to the show as they each race for a bigger share of the affluent market.

Audi is launching a limited edition racecar called the R8 at the show that is tailor-made for just the Chinese market. The company vowed earlier that by 2015 it will bring all of its lineup to the country, which is likely to surpass Germany to become the brand's largest market worldwide by the end of this year with projected sales of 300,000 vehicles.

BMW is introducing its X1 SUV at the show that will be locally produced next year when the carmaker completes its new plant in northeastern city of Shenyang. All three German premium brands are adding capacity in China.

Mercedes-Benz is showcasing a rich lineup highlighting its new CLS sports sedan, SLK roaster and E-Class sedan. The carmaker also brings the smart forvision concept for its Asian debut.

China's luxury car market is expected to increase more than 30 percent to sales of nearly 1 million units this year. Market analysts forecast that the segment could maintain growth of around 15 percent in the years to come.

Domestic players

Domestic carmakers also intend to shine with their newest products at the show. Guangzhou Automobile Group will debut a SUV model under its wholly owned brand Trumpchi. FAW Group will announce a new sub-brand at the show targeting entry-level buyers.

In the limelight is also on various hybrid and pure electric vehicles.

General Motors displays its Chevrolet Volt. The extended-range electric model was already on sale in the US.

Toyota brings its third-generation hybrid Prius. The carmaker previously said it plans to produce hybrid vehicles and key components in China in 2015.

Honda is showcasing its hybrid CR-Z and Fit that will both hit the Chinese market next year. The carmaker announced earlier this month that it plans to build electric cars at local joint venture in Guangzhou in 2012.

British premium SUV maker Land Rover is bringing its Range_e to Guangzhou, marking the Asian debut for the diesel-electric hybrid.