Multi-purpose vehicle makers gain from moving into countryside

Wang Xing runs a small rural inn near Guangzhou, Guangdong province. He's kept the original farmer's house look and serves dishes made from wild vegetables to attract city residents at weekends. "Happy hours at the farmer's", as the business is known, has made him happy too - and it's brought him much more money than growing crops.

He used to use a minivan to pick up guests from the city, but later he felt the van was not comfortable or safe enough, and it got so shabby that Wang was afraid of losing face, and possibly customers.

Earlier this year he sold the van and bought a multi-purpose vehicle, with a front that looks like a bullet.

"It is more spacious and sharp-looking, and it earns me face," Wang says.

Many of Wang's neighbors have set up "happy hours" farm businesses and dozens of shuttle vans or MPVs now travel constantly between the city and the small village transporting customers. These farmers may not be urban dwellers yet, but some have already bought apartments in the city.

Figures from China's National Bureau of Statistics show that the nation's urban population increased by 12 percent between 2002 and 2011. It is now increasing by 20 million every year, says the Ministry of Housing and Urban-Rural Development.

Cheng Daoran, general manager of Dongfeng Liuzhou Motor Co, says this mass movement is changing customer habits and creating enormous opportunities for automakers.

"The auto industry has seen demand for another 4.3 million cars every year," he says.

As a company that specializes in making MPVs, Liuzhou Motor, a subsidiary of China's Dongfeng Group, is seeing increasing demand for the vehicles among new migrants to cities.

An MPV can carry up to seven people, big enough to hold an extended family in small towns or counties. When the rear seats are folded, there is enough space for large cargoes - produce just harvested or equipment used in self-employed businesses, for example.

"TheMPV is a niche product that can never reach the scale of regular passenger cars in sales, but it can bring lucrative returns with the backdrop of China's quick urbanization," Cheng says.

Last year, the company sold 72,746 MPV models, notably the Lingzhi models, leading the Chinese market. Sales increased by 159 percent on 2011.

"When more farmers move to small towns or cities, they have regular work to attend to every day. On weekends they may still want to do some business, such as selling yields from their land, so they need vehicles as flexible as MPVs."

The golden days for multi-purpose vehicles started three years ago, Cheng says. Before that, rich people in villages were still chasing minivans and small cars such as the Suzuki Alto.

"Customer trends are heading upward," Cheng says. "In the late 1980s, when the first group of farmers got some pocket money, they bought tractors to transport grain and other goods. In the 1990s, they bought tiny cars such as the Alto, and later, minivans such as the Wuling to conduct small business."