Most car markets around the world would welcome any growth, however small, and cast an envious eye at China; but even China’s growth of around 8% causes some people to fret.
That’s because China’s growth is slowing after years of double digit gains turbocharged by government incentives. In fact, China is seeing its first dis-incentives: the government of Beijing is restricting car sales in a bid to cut congestion and improve air quality.
None of this overshadowed this week’’s Beijing Auto Show, featuring some 1,100 vehicles from 94 brands. A burgeoning middle class is hungry for mobility, and the importers are reaping the benefit – much of the cooling in the market has been borne by the domestic manufacturers.
China’s growth is slowing after years of double digit gains turbocharged by government incentives.
Consumers crave the perceived luxury and design of foreign imports, and the likes of Audi, BMW, Mercedes-Benz and Jaguar had no shortage of traffic through their stands. SUVs are the current sweet spot in the market, and no stand was complete without one. Ford took its SUV line up from one to four with the addition of the Escape, Explorer and the production version of the Ecosport, which it will build at its plant in Chongqing. Over at Volkswagen Group, Lamborghini chose the show to unveil its new SUV.
According to figures from J D Power and LMC Automotive, 2.1 million SUVs were sold in China last year, up 25% over 2010, accounting for around 12% of 2011′s total light vehicle sales of 18.5 million.
There’s little doubt that the motor shows in China, which alternate between Beijing and Shanghai, will overtake Tokyo as Asia’s premier industry event. What’s still lacking, though, is the innovation seen in Japan.
Chinese OEMs are decidedly conservative when it comes to design, and several are still not shy about copying: Beijing saw copies of the Mini, Toyota Aygo, BMW X3 and Mazda3. There was one piece of innovation by a Chinese OEM with the unveiling of the MG Icon at the SAIC stand – but it was designed by a Briton. The Chery Ant, meanwhile, would have looked at home at the Tokyo Show.
Chinese OEMs are decidedly conservative when it comes to design, and several are still not shy about copying.
There were some electric and hybrid studies from Chinese OEMs, although none appeared remotely production-ready.
Despite the slowdown in sales, industry insiders remain convinced that China is the place to be for some time to come, although the landscape will almost certainly change as consumers from smaller cities and towns increasingly put cars on their shopping list.
Former Chrysler and Toyota executive Jim Press, president of international operations for McLarty Automotive Partners, which runs dealerships in China, sees that recent cooling not so much as a slowdown but as a correction. “Sales were overheating,” he said. “The government is now taking action to cool things down. As we see more and more customers come into the market and the competition increases, you’ll start to see pressure on prices and profits. Carmakers will continue to sell a lot of cars in China, but they won’t make as much profit.”
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
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