Beijing Motor Show 2008: Chinese Automakers Reveal Future Ambitions

The Beijing Motor Show opened to the press yesterday, with Chinese automakers vying for centre stage against competition from overseas. Geely is at the forefront of this, having unveiled more than 10 production and concept vehicles as it strives to move away from its low-budget image. Among the vehicles it has shown are its Panda minivehicle, with both a traditional gasoline (petrol) and electrical powertrain, the C-segment King Kong HRV, and the larger FC-2 hatchback and FC-3 sedan. The company has also exhibited more niche models, as multi-purpose vehicles (MPVs) and sport utility vehicles (SUVs) are both becoming popular in China, while in an attempt to move further upmarket it has shown two coupé vehicles, the China Dragon and the top-level GT, as well as a luxury sedan, the GC-1. All of these vehicles are likely to form part of Geely's ambitious strategy announced by Vice-President Frank Zhao prior to the start of the show, which includes 15 new platforms and 42 models by 2015.

Reflecting its plans to enter mature markets overseas, Chery has unveiled an upgraded A3 sedan and Storm 2, which it considers to have "European style". The company is looking to expand its SUV line-up with what it calls the "Brave Warrior Series" of vehicles, the Higgo 2 and Higgo 3 pick-up, to be offered with both manual and automatic transmission and a range of engines to suit the customer. Chery has also shown a range of vehicles with powertrains that include diesel, hybrid, fuel-cell, and flex–fuel, reflecting future trends and its intention to meet them.

Shanghai Automotive Industry Corporation (SAIC) has revealed the latest addition to the Roewe brand, the 550. The model, which was initially previewed as the W2 at last year’s Shanghai Motor Show, is the result of a joint effort between the designers of the former MG Rover company and SAIC's own team. The sedan is powered by the company's 1.8-litre turbocharged engine and has achieved five-star ratings in both domestic and international crash tests, according to reports.

Two commercial vehicle manufacturers that have recently decided to enter the passenger car market have also shown off vehicles. Anhuai Jianghuai has unveiled two sedans, codenamed the A137 and A138, which have been designed by Italy's Pininfarina. Beijing Automotive Industry Holdings, which is best known for the truck-maker Beiqi Foton Motor, has decided to bring back the Beijing marque and this will be used for passenger cars from around 2010, and it has revealed three sedan concepts, two SUVs, and one hybrid model.

The importance of the Chinese market has also been underlined by Honda, whose JV with Guangzhou, Guangzhou Honda Automobile, has exhibited a locally developed SUV, the Linian. The design of the vehicle offers a hint to the future direction of the brand’s self-developed vehicles, the first of which is expected to be the SUV in 2010.

Outlook and Implications

The models mentioned are being exhibited in Beijing alongside such notable vehicles as the Audi Q5 (see China: 21 April 2008: Beijing Motor Show 2008: Audi Unveils Q5 SUV) and Mercedes GLK (see China: 18 April 2008: Beijing Motor Show 2008: Mercedes-Benz to Debut New GLK SUV) SUVs, serving to underline the ambitious nature of domestic automakers in China. With vehicle sales in the country set to breach 10 million units by the end of 2008 and carry on towards over 15 million units per annum (upa) within the next six years, according to Global Insight data, automakers are aiming to gain a slice of this potentially valuable pie. The growth rate of the Chinese market over the past few years has resulted in these automakers becoming increasingly bullish and setting hugely ambitious sales targets.

Despite the gains that have already been made by these automakers, there are still many challenges on the horizon. Among these is the increasingly competitive nature of the vehicle market in China, which looks set to become even more intense in future as international carmakers look set to redouble their efforts in the country as mature markets become less profitable and seem set to decline. Volkswagen (VW), for example, has launched its Lavida model to add to its range of vehicles that has been developed specifically with local tastes in mind, while General Motors’ (GM) Buick brand has launched a heavily revamped Excelle (see China: 14 April 2008: GM Launches New Buick Excelle in China), which was one of the largest-selling vehicles in the market last year and could return to this position when the refreshed version is released in May. Global automakers may also be able to gain benefits from their sheer size when it comes to finding a way around the rising raw material costs that are hitting the industry, which may give them an advantage both in terms of price and profitability.

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