Ford may be an also-ran in China, but it plans to catch up quickly with a range of new products.
The astonishing growth of the Chinese appetite for new cars and trucks is showing no sign of slowing down, good news for the scores of automakers gathered for this year’s Shanghai Motor Show.
The industry saw sales surge by 32%, last year –after a 2009 gain of 46% — to a global record of 18 million vehicles, leading makers foreign and domestic to announce billions of dollars in investments – and scores of new products – during a media preview that has drawn an estimated 10,000 journalists and top executives from around the globe.
“I know this is the most exciting auto show I’ve ever been too,” said Jim Farley, Ford Motor Co. executive in charge of the company’s global marketing effort.
Farley compared the energy unleashed by the show’s opening day to the excitement created by General Motors’ once popular Autoramas, a highlight of the U.S. car boom of the 1950s.
Citroen rolled out the Metropolis for the Shanghai show.
Ford’s big presence at the show stands in sharp contrast to its initial reluctance to invest in China. (Click Here for more on Ford’s China plans.) And the maker is definitely playing catch up, admitted Farley, who said that this year Ford expects to recruit 1,000 Chinese employees for jobs in sales, marketing, distribution and other staff positions. It’s also opened its first design studio in Shanghai.
Dieter Zetsche, Daimler AG chief executive officer and the head of the Mercedes-Benz brand, said the situation in China is unprecedented. “We’re in an extraordinary situation (in China,)” he said. “Certainly the economy could overheat or there might be social unrest. But the way the Chinese government has managed this process is pretty impressive,” noted Zetsche during an interview with reporters from English language publications.
(Mercedes targets the Middle Kingdom. Click Here for more.)
No other society in history has gone through the enormous economic transformation in such a relatively short period of time as China has over the last 25 years. Other societies have taken a century to match that economic boom.
The Chinese have succeeded in keeping their economy growing at a rate of 7% to 8% per year, which is required to create jobs, while not allowing things to overheat, said Zetsche. Over the last quarter of a century, millions of Chinese have moved from rural areas to seek a better life in China’s cities – though that has created a variety of complex social challenges.
Like a number of makers, Mercedes plans to reveal the concept A-Class in both Shanghai and New York.
The movement has helped ignite China’s automotive market, and “I don’t see this changing for the next five or 10 years,” Zetsche said.
Thus, Mercedes elected to use the Shanghai show from the introduction of its new A-class concept, which features a bold exterior design and an interior design Zetsche said was inspired by the aviation industry. (Click Here for more on the new A-Class.)
The compact model is based on a small, front-wheel –drive platform , powered by a new 4-cylinder turbo gasoline engine that is mated to a dual-clutch seven speed transmission. The A-class concept, which is very close to the production version coming later this year, also features a radar-based collision prevention assist.
Zetsche is one of many senior industry executives on hand for the Shanghai Motor Show. His German compatriot, Martin Winterkorn, Volkswagen Group CEO, handled the introduction of the new Beetle as well as vehicles such as AudiQ3 and Audi e-tron concept car and the new “Vision D” concept from Skoda.
(The Beetle underwent an unusual 3-city launch which included both Berlin and New York, as well as Shanghai. Click Here for more on the iconic coupe’s 2012 update.)
GM China Group President and Managing Director Kevin Wale predicts the maker will double Chinese sales.
The new Q3 is described as a premium SUV in a compact form that attempts to resolve some of the concerns about Audi’s bigger crossovers. It weighs in at barely 3,300 pounds, thanks to extensive use of lightweight aluminum, which translates into significant improvements in fuel economy.
Toyota CEO Akio Toyoda certainly didn’t travel quite as far as Zetsche and Winterkorn but his presence underscores the growing importance of China in Tokyo’s future plans. Toyoda also thanked the Chinese for their post-quake assistance to the Japanese people.
Nissan’s top designer, Shiro Nakamura, was on hand to unveil a striking new concept car from Infiniti, the Etherea, as was GM global design chief Ed Welburn, who was on hand for the maker’s multiple press conference.
The 2012 Chevrolet Malibu gets its official launch in Shanghai - then New York.
“China is going to be a very good market for us,” predicted Henrik Fisker, the founder of eponymously named Fisker Automotiver, which will deliver its first plug-in hybrid sports cars at the end of May. “Given the growing demand for new vehicles in China, where buyers keep spending despite challenges finding license plates and parking, it’s not surprising senior executive made the trip.
“Companies that placed a big bet on China in the late 1990s have been rewarded handsomely, Farley noted and the market is continuing to grow.
But sometimes that can be a problem.
“We have consistently underestimated demand. We’re always a half assembly plant short. You want to be half an assembly plant ahead,” said Tim Lee, president General Motors International Operations, which includes China in its territory.
Last year, GM became the first maker to exceed 2 million sales in a single year in China. Now, however, it predicts its sales could more than double by 2015.
“You’ve had this big economic growth (in China) (and despite the fact) it’s uneven…more and more people are reaching that tipping point where they can afford a car,” Lee said.
“This is a once in a life time opportunity,” said GM China President Kevin Wale. “This is the most dynamic period of growth in automotive history, he added.
“Even if growth slows to 10% a year that’s still another 2 million cars per years. There is nowhere else anywhere where that’s happening,” echoed Farley.