Premium brands bank of Chinese market to boost flagging global demand
International premium automakers are banking on Chinese customers to boost flagging sales, devoting their latest sports utility vehicle offerings to the world’s largest car market.
As a result, international manufacturers are tailoring their output more and more to suit the tastes of Chinese customers and launching more specialized vehicles in China at a pace faster than ever before.
In past decades, foreign auto brands just brought their models into the Chinese market without any modifications, but that all changed after it became the No 1 car market, according to Zhu Kongyuan, secretarygeneral of the China Auto Dealers Chamber of Commerce.
Hakan Samuelsson, president & CEO of Volvo Car Group, told China Daily that the company’s development in China is much faster than in the global market, leaving overall growth and presence in other markets behind.
He attributed the Geely Holdings controlled Swedish brand’s rapid expansion in China to its ramping up of its domestic production capacity, in contrast to limited capacity in other markets.
“In China we have four factories, including three wholevehicle factories and one engine production factory,” Samuelsson said. “So we will have a better growth in China. We have to grow faster, so we will have to have more capacity.”
The Volvo chief added, “Right now, plants in Luqiao and Chengdu will help us in production capacity, so will Charleston in the United States. Consequently, we have more capacity now.”
The Volvo XC 40, the company’s first compact SUV, will begin production at its Luqiao plant in eastern Zhejiang province this year. Awarded European Car of the Year on March 5 ahead of the Geneva Motor Show, the latest volume model is expected to help Volvo enter a new segment for additional sales.
In the future, Volvo Cars, except XC90 — the only imported model, will all be manufactured Hakan Samuelsson, president and CEO of Volvo Car Group in China, with all electric cars coming from the Luqiao plant by 2019.
Another luxury brand, Jaguar Land Rover, is also roaring in the oriental market together with a local partner Chery Automobiles, which has delivered about one fourth of the marque’s total production last year. The company said this was due to Chinese demand for luxury SUVs.
Jaguar Land Rover Automotive CEO Ralf Speth said, “The growth in China, the biggest market for Jaguar Land Rover, has taken over to a small extent the rest of the four regions of the world.” The British brands will start local production of a Jaguar SUV, joining the localized fleet of two Land Rover SUVs and another two Jaguar sedans, besides importing more to expand the offerings to Chinese customers.
The company’s Jaguar I-Pace is to be shipped to the Chinese market this year, and the carmaker has pinned great hope on its first fully-electric highperformance SUV in China.
“We have been preparing for an electrified future, before our rivals considered doing this, to make breakthroughs in China,” Speth said. “We are focusing on high quality and environment. We believe the Chinese market is heading in the same direction, and Chinese customers will make a wise choice,” he added.
Among the many world premieres at the Geneva Motor Show held last week, Audi AG CEO Rupert Stadler announced the company’s most aggressive ever SUV offensive.
The German premium brand will more than double its local portfolio with Chinese partner FAW in the next five years.
A total of 10 new Audi SUV models, including four fully-electric vehicles, will be launched in the Chinese market in the coming five years, and seven of them will be manufactured in China.
We will have a better growth in China. We have to grow faster, so we will have to have more capacity.”