Automakers vie to tap China market

April 20, 2009
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, SHANGHAI, Apr 20 – Carmakers from around the world unveiled their latest products Monday at China\’s largest auto show, hoping to shrug off dreary times for the industry by tapping into the world\’s new top auto market.

From international marques like Mercedes to up-and-coming domestic carmakers such as Chery, more than 1,500 manufacturers were on hand at industry show Auto Shanghai 2009.

The show is seen to represent the growing importance of an expanding market that is home to more than one billion people.

"We treat this as one of our most important shows," said Helmut Broeker, chief executive officer of Porsche China.

"This is the first time we have launched a product line in Asia outside our core countries," he said, referring to the Panamera, a four-door sports car making its international debut in Shanghai.

Accompanying the fanfare of Monday\’s opening, several major Chinese newspapers published thick, full-colour pull-out sections on the show, while others were adorned with glossy wraparound advertising from the car makers.

At a time when the global financial meltdown has pushed other auto markets to the brink of collapse, the Shanghai show will feature 13 new cars from multinational makers, according to the China Daily newspaper.

The models to be unveiled to the world at the show include the Mercedes S400 Hybrid, which combines a petrol engine with a lithium-ion battery, and the BMW X5 M, a sports activity vehicle.

China\’s own auto makers are also represented at the show, such as the Roewe N1 from SAIC Motor Corp. and the Riich M1 subcompact from Chery.

As the clout of the China market grows, and other markets become less important in relative terms, the world\’s major automakers are compelled to pay more attention to the Asian giant.

Embattled US auto manufacturer General Motors said last week that it was aiming to double its sales in China over the next five years. The Detroit-based group is on the verge of bankruptcy due to plunging sales at home and in other markets.

"We are seeing a major shift in the battleground within the global automobile market from the US to China," Atsuyoshi Hyogo, head of Honda\’s China operations, said Monday according to Dow Jones Newswires.

Government incentives, such as tax rebates on smaller engine cars, helped drive China\’s auto sales to a monthly record of 1.08 million units in March.

Vehicle sales in the first quarter rose almost six percent from a year earlier to 2.64 million units, according to official figures.

China\’s monthly car sales surpassed the US for the first time in January, when a total of 735,000 were sold in China, compared to 656,976 vehicles in the US.

At the same time, China is seeing growing momentum because of the spread of wealth to new groups of society, boosting demand for more expensive models.

"We see in China large engines have a very strong following," said Ian Robertson, executive board member of BMW AG.

"The premium car market in China has really only taken off in the last few years. Therefore we believe it will grow faster relative to other parts of the world," he said.

Even so, 45 percent of prospective car buyers in China postponed purchases due to concerns over the economy, and a quarter have cut their budget, according a survey of more 1,000 mainland consumers by research firm TNS China.

These factors favour Chinese car makers, who typically make cheaper vehicles than their foreign competitors, according to TNS China.

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