Volkswagen sees China as a major battleground among global automakers.
Despite speculation the Chinese economy is heading for trouble and the threat of an east-west trade war, prospects for car sales in China remain bright this year, key executives from German and American companies said recently.
Daimler AG CEO Dieter Zetsche said, during a visit to Detroit, sales of new vehicles in China clearly could top 20 million units in 2011, “There are a lot of people who think it’s pretty realistic they could sell 20 milloin units in China this year,” said Zetsche, who has made expanding the Chinese foothold of Daimler’s Mercedes-Benz flagship a top priority over the last couple of years. China is now one of the world’s largest markets for luxury vehicles and continues to grow, he said.
Susan Docherty, the Shanghai vice president of sales for GM’s international operations, also said GM expects total vehicle sales in China to expand in 2011. Volumes in the booming Asian nation totaled 18.35 million, last year, and sales of GM and its partners topped 2.3 million units – the first time any maker ever topped 2 million in a single calendar year.
“Remember, sales have increased by double digits in each of the last five years,” she said.
Daimler CEO Dieter Zetsche sees China becoming the first country to top 20 million car sales this year.
In fact. China accounted for 72% of 2010 sales by GM’s International Operations, which covers Asia, Africa, the Middle East and Latin America, compared with 68% in 2009, Docherty said, underscoring the importance of the Chinese market to GM.
China also has become an export market as it shipped more than 35,000 Michigan-made Buick Enclaves from the U.S. to China, Docherty said. Sales of the Chevrolet brand alone increased by 411% and the Chevrolet nameplate actually outsold the Wuling brand, Docherty noted. Shipments of the Chevrolet Volt to customers in China are also expected to begin in late 2011 or in 2012.
Overall, GM expects sales in China to grow beyond 19 million units this year, she said, adding she would not be surprised if sales went higher despite the high profile efforts to limit the number of drivers and new vehicles in places such as Shanghai and Beijing – the capital city capping new vehicle registrations at 20,000 a month.
Joe Hinrichs, who took over as group vice president and president of Ford Motor Co. Asia Pacific and Africa in December, 2009, also said he expects the Chinese market to expand. Ford and its Chinese partners are building two new plants in the country to keep pace with the growth and also looking to expand their market share.
China has 300 cities with population of more than 1 million, and the government is looking to expand the economic boom beyond those along the populous Pacific coast. The growth potential in the so-called second and third-tier cities s enormous and largely untapped and is the area in which Ford plans to focus as it ramps up its operations in China, Hinrichs said.
Ford’s investment in China not only includes factories but also money for redesigned vehicles and engines, he said.
Meanwhile, BMW also expects more growth. Ian Robertson, a member of BMW’s board of management, said the maker now has three new plants under construction in China as it tries to keep pace with the developments in what has become the world’s largest market for vehicles, overtaking the U.S.
Jonathan Browning, the seasoned executive who now heads Volkswagen of America, noted after a speech at The Automotive News World Congress that China’s position is having profound influence on the world’s auto manufacturers. German automakers, including Volkswagen, which has a huge stake in China, are devoting more research and development to electric vehicles because they expect the Chinese authorities to mandate the wider use of electric propulsion in the future, he said.
The Chinese are making a substantial investment, through universities and research institutes, in EV research and are pushing to develop battery technology that would make electric powertrains available to deliver more range at a reduced cost.