WORLD> Impact on China
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WORLD> Impact on China
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Global gaze on record China sales
By Li Fangfang, Gong Zhengzheng and Xiao Ma (China Daily)
Updated: 2009-04-20 07:50
Despite gloomy international sales, whether in Western countries or emerging economies, the still-robust Chinese auto market currently offers the brightest prospects for global automobile manufacturers to offset their losses at home. China has been the first to show improvement from the devastating industry downturn that began in second half of last year as it benefits from a series of government incentives to boost auto consumption. "China might be the automobile market with the most potential in these hard times," said Hui Yumei, an analyst with automobile industry research company Sinotrust. "The government's stimulus policies are starting to take effect." The view is backed by Zhong Shi, an independent auto analyst based in Shanghai, who said "tax cuts and rebates for small car purchases lured buyers back to showrooms and relit consumption enthusiasm". China halved retail taxes on small cars this year and plans supply 5 billion yuan for vehicle subsidies in rural areas to drive auto sales after growth rose at the slowest pace in a decade last year, when 9.38 million units were sold, an increase of 6.7 percent over 2007. The stimulus package was felt in the first quarter, when domestic sales surpassed the waning US market for three months in a row, giving China the temporary title of top auto market in the world. The country even reached a monthly sales record of 1.11 million vehicles in March, 34.1 percent more than in February, and a 5 percent year-on-year increase. That compares with a plummet of more than 30 percent in US for the period, when 2.2 million vehicles were sold. "China's auto sales in 2009 may break the 10-million barrier and overtake the US as the world's largest automobile market for the entire year," noted Mei Songlin, deputy general manager of J.D. Power Asia-Pacific. The growth in China provides provide global automakers the confidence to further develop and invest in China in a big way. While cutting back on budgets in other auto shows this year, major multinational automakers' zest for the 13th Shanghai International Automobile Industry Exhibition is illustrated by the number of participants and the size of their booths and pavilions. The show has attracted 1,500 automakers and parts manufacturers from 25 countries and regions that have a combined display area of 170,000 sq m, a rise of 20 percent over the last session. Thirteen new cars from multinational makers will make their global debuts at the Shanghai show, according to Wang Xia, vice-chairman of the Automobile Sub-council of the China Council for the Promotion of International Trade. "Of course global carmakers are facing very difficult times, and it is clear they will save money on shows in markets that are collapsing and have problems," said Harald Muller, CEO of German expo organizer IMAG. "But China is still the market that is increasing, so they will concentrate on one or two major auto shows this year, and the Shanghai show is definitely one them."
Luxury car maker Mercedes-Benz is set to regale Chinese audiences with a double breakthrough - a record-high number of premieres along with an impressive lineup of 35 models - at Auto Shanghai 2009. "The Shanghai auto show has become the largest auto show for Mercedes-Benz globally, and only comparable to Frankfurt Motor Show," said Klaus Maier, president and CEO of Mercedes-Benz (China) Ltd. Mercedes-Benz's Shanghai presentation includes four world premieres, five Asia debuts and four first-time releases in China, along with a fleet of compelling cars from all brands in Mercedes family - Mercedes-Benz, Maybach, Smart and Mercedes-AMG. Its rival BMW will unveil two world debuts, three Asian premieres and one sports model's first drive into China. Volkswagen, long among the top two automakers in China through its joint ventures, will have also a large presence in keeping with its market status. "Together with Shanghai Volkswagen and FAW Volkswagen, Volkswagen Group brings all of our series and latest technologies to the show," said Martin Winterkorn, CEO of Volkswagen AG. "Our two brand-new models will meet Chinese consumers - the sixth-generation Golf and Passat New Lingyu." "Volkswagen Group has always been confident in China's automobile market. In this year as well next we will invest $1 billion in China on new technologies, the introduction of new products, brand building and upgrading sales channels and services." The Big Three US carmakers - most notably General Motors and Chrysler, which are on the edge of bankruptcy - still promise their usual exhibition scale and standards at the Shanghai auto gathering. Chrysler will exhibit its nine Chrysler, Jeep and Dodge models, providing Chinese consumers choices in the sedan, MPV, SUV and crossover segments. The GM China family will have 37 vehicles on display - 33 from SAIC-GM and four from SAIC-GM-Wuling. "Our production and concept models will represent all five brands offered by our Chinese joint ventures," said Kevin Wale, president and managing director of GM China. "GM has made a long-term commitment to China. Despite the challenges that GM and our industry now face, we believe our best years are ahead of us. One look at the GM China family's lineup on display at the Shanghai auto show will convince even the most hardened skeptics." The company announced earlier this month that it plans to double its annual sales in China over the next five years to 2 million units. Japan's Toyota Motor Corp is to display around 50 vehicles in a 4,500 sq m area jointly with its partners in China, which is the group's most aggressive move in a China motor show. The company said its presentation illustrates Toyota's plans to make additional investment in the Chinese market. Toyota's China sales grew by 17 percent to 585,000 vehicles last year from 2007. The carmaker runs car joint ventures with China's FAW Corp and Guangzhou Automobile Corp.
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