Global, main­land China au­tomak­ers de­but new mod­els


Ford showed off its new Taurus and Nis­san un­veiled a mid­size sedan and a SUV de­signed for main­land China on Mon­day at a Shang­hai Auto Show that high­lighted ris­ing com­pe­ti­tion from lower-priced Chi­nese auto brands.

Com­pe­ti­tion on the main­land is in­ten­si­fy­ing as eco­nomic growth slows and more man­u­fac­tur­ers pile into the world’s big­gest auto mar­ket by num­ber of ve­hi­cles sold. Global au­tomak­ers are spend­ing heav­ily to ap­peal to Chi­nese main­land tastes and lo­cal brands are rolling out lower-cost ver­sion of SUVs and other popular ve­hi­cles.

Ford Mo­tor Co. used the Shang­hai show for the global de­but of its lat­est Taurus, re­flect­ing the event’s rapid rise to be­come one of the global in­dus­try’s most im­por­tant show­cases. Gen­eral Mo­tors Co., Mercedes Benz and other global brands also un­veiled new mod­els or ver­sions mod­i­fied for the main­land.

Fea­tures on the Taurus in­clude mas­sage units in the back seat. That is aimed at buy­ers who have driv­ers and ride in back — a mar­ket niche that in­creas­ingly is driv­ing au­tomak­ers to de­sign big­ger, more com­fort­able rear seats.

“This new car rep­re­sents ev­ery­thing you can ex­pect in the grow­ing port­fo­lio of Ford ve­hi­cles in (main­land) China,” said Marin Burela, a vice pres­i­dent of Ford’s joint ven­ture with Chi­nese brand Chang’an.

The show high­lighted the resur­gence of Chi­nese main­land au­tomak­ers fol­low­ing two tough years spent los­ing mar­ket share to for­eign ri­vals. Lo­cal com­peti­tors have spent heav­ily to roll out new mod­els that are drawing buy­ers with lower prices at a time when main­land China’s eco­nomic growth is slow­ing.

Brands in­clud­ing SUV pro­ducer Great Wall Mo­tor and Geely Hold­ing, owner of Swe­den’s Volvo Cars, re­ported first-quar­ter sales gains of up to 70 per­cent. That helped to boost their mar­ket share so far this year to 43 per­cent from last year’s 38 per­cent, ac­cord­ing to LMC Au­to­mo­tive.

For global brands in­clud­ing Volk­swa­gen AG, sales were flat or even de­clined due to their em­pha­sis on higher-priced brands for which growth was in low to mids­in­gle dig­its. That was a sober­ing devel­op­ment for au­tomak­ers that are count­ing on China to drive fu­ture rev­enue.

“Mar­ket growth has come to a halt for in­ter­na­tional brands,” said Bern­stein Re­search in a re­port.

On Mon­day, Great Wall de­buted its H6 Coupe and showed its H8, the lat­est in a se­ries of SUVs that have helped to trans­form the com­pany into one of main­land China’s most suc­cess­ful auto brands. The com­pany has said it hopes to sell 10,000 units of each of the two new ve­hi­cles per month.

SUVs, popular with Chi­nese main­land driv­ers who value their im­age of safety in the coun­try’s chaotic traf­fic, ac­counted for 26 per­cent of all pas­sen­ger ve­hi­cles sold in the first quar­ter, the high­est pro­por­tion of any ma­jor mar­ket.

“We pre­dict that this year will be an SUV feed­ing frenzy,” said Ola Kal­le­nius, head of mar­ket­ing for Mercedes Benz, which un­veiled an SUV Coupe con­cept on Sun­day.

The abrupt de­cel­er­a­tion in main­land China’s eco­nomic growth has dragged down auto sales growth and prompted buy­ers to shift to lower-priced mod­els.

Eco­nomic growth slowed to 7 per­cent in the first three months of this year, its low­est quar­terly ex­pan­sion since the af­ter­math of the 2008 global cri­sis. That still is higher than the low sin­gle-digit growth fore­cast for the United States and Europe this year, but well be­low China’s peak of 14.2 per­cent in 2007.

The de­cel­er­a­tion to what main­land Chi­nese lead­ers term the “new nor­mal” of slower but more sus­tain­able growth has cooled cor­po­rate prof­its and the real es- tate in­dus­try. The rul­ing main­land Chi­nese Com­mu­nist Party is press­ing com­pa­nies to boost wages in an ef­fort to pro­mote growth driven by con­sumer spend­ing in­stead of trade and in­vest­ment.

“This is driv­ing sales growth in this (lower-priced) seg­ment,” said Di­et­mar Voggen­re­iter, pres­i­dent of Audi China.

Nis­san Mo­tor Co. un­veiled the Lan­nia, a mid­size sedan de­signed for Chi­nese buy­ers. The com­pany, which has made the main­land a pil­lar of its global turn­around strat­egy, calls the Lan­nia its first of­fer­ing for the coun­try’s “youth gen­er­a­tion.”

For the SUV mar­ket, Nis­san un­veiled its Mu­rano hy­brid. GM, Ford, BMW, Ford’s Lin­coln luxury brand and other au­tomak­ers also dis­played SUVs, many of them of­fer­ing hy­brid-elec­tric ver­sions.

Also Mon­day, Geely dis­played its Borui sedan, its first model de­vel­oped us­ing Volvo tech­nol­ogy fol­low­ing the com­pany’s ac­qui­si­tion of the Swedish brand in2010.

(Left) Per­form­ers in­tro­duce the Buick Ver­ano sedan at a Gen­eral Mo­tors event ahead of the Auto Shang­hai show in Shang­hai on Sun­day.

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