Global auto makers woo China despite slower sales

Global auto makers woo China despite slower sales

BEIJING - Agence France-Presse
Global auto makers woo China despite slower sales

A model stands by a car made by Great Wall Motors at the Auto China. AFP photo

Major carmakers gathered in Beijing yesterday for China’s leading auto show, seeking an edge in the world’s largest automobile market after a sharp slowdown in growth.

China emerged as the world’s top car market in 2009, but the sector stalled dramatically last year, with sales rising just 2.5 percent to reach 18.51 million units, after the government rolled back auto-purchase incentives.

Nonetheless, many of the world’s major carmakers remain confident of continued steady growth in the Asian nation, where three out of every four new car purchases are by a first-time buyer.

Organizers say 120 new models will be launched at the Auto China 2012 exhibition, which runs until May 2 and is expected to attract hundreds of thousands of visitors.

“This big country merits big ambitions,” said Dieter Zetsche, chairman of Daimler AG and head of Mercedes-Benz Cars.

“So we will continue to build our manufacturing presence ... all in all, the local car market will double by 2020. In turn, we will double our production capacity here by 2015.” Daimler will invest about three billion euros in China in the coming years in an effort to achieve a sales target of 300,000 units by 2015, Zetsche said.

Market on the left lane

Toyota President Akio Toyoda told reporters the growth of China’s car market was unprecedented in its speed, as he unveiled a new hybrid car his firm is building especially for the country of 1.3 billion people.

“In 2009, the Chinese car market surpassed the United States to grow into the world’s largest market. The speed in which it did so was unlike any other ever experienced,” he said.

China has pledged to invest more than $14 billion to develop the technology and infrastructure for clean energy cars in a bid to have more than 5 million on the road by 2020.

Toyota, BMW, Honda and China’s Warren Buffett-backed BYD have all announced they will unveil electric or hybrid cars as part of a total of 88 new energy vehicles to be displayed at the show.

But analysts warn it may still take a long time for the Asian nation to fully embrace an electric future.

“International car makers are all trying to appease the government by showing they are indeed bringing electric vehicles to China,” said Namrita Chow, an analyst at research firm IHS Global Insight.

“Almost every international automaker has announced plans for electric vehicles in China. But almost all are equally as skeptical of volume sales.” Carmakers are also scrambling to tap markets in China’s second-tier cities where car ownership remains lower than in the nation’s major urban centers.

U.S. automaker Ford recently opened a new production facility in southwest China’s Chongqing, while Volkswagen has announced plans to open up a factory in the nation’s westernmost region of Xinjiang.