Shanghai showcases auto world's China hopes

Foreign and Chinese carmakers unveiled plans on Tuesday to ratchet up investment and introduce new models in China as Shanghai's auto show opened with all eyes on the world's largest car market.

World premieres at the show include Volkswagen's new retro-styled Beetle, General Motors' new Chevrolet Malibu, Buick Envision and its China-only Baojun 630, and France's PSA Group introducing its Citroen DS5.

As the first auto show since the March 11 earthquake and tsunami disaster in Japan, source of a large number of auto components, Shanghai will allow industry analysts to gauge the impact of the catastrophe on the sector.

Since the previous Shanghai auto show in 2009, China has overtaken the United States as the world's top car market and the event has accordingly emerged as one of the world's biggest auto fairs.

"From an importance standpoint, when you think about where the centre of gravity is in terms of volume and commercial benefit - it's here," Tim Lee, the Shanghai-based president for GM International Operations told AFP.

US giant Ford Motor Company announced plans to introduce 15 new vehicles to China by 2015 as it seeks to increase its share of the world-leading market.

China's auto market is showing signs of slowing to "a growth rate the market can sustain" of five to 10 percent after a decade of near non-stop double-digit annual growth, Joe Hinrichs, chairman and chief executive of Ford China said.

"Even if the percentage doesn't look as big as it used to, volume-wise it's the largest growth market in the world," he said.

Ford's rival General Motors, the leading foreign automaker in China by sales, said on Monday it aimed to more than double its Chinese sales by 2015.

GM China Group President Kevin Wale said the US auto giant aimed to capitalise on "the unmatched opportunities that the Chinese market offers" and sell around five million cars a year by 2015, up from 2.35 million last year.

German automaker Audi's Q3 sports utility vehicle made its world debut in Shanghai, with chief executive Rupert Stadler saying on Tuesday that China would become the company's largest sales market in 2011.

Auto sales in China rose more than 32 percent last year to a record 18.06 million units as its economy powered out of the world economic downturn.

China's largest automaker SAIC - whose partners are GM and Volkswagen - said it aimed to nearly double its annual sales to over six million units by 2015 and warned that by then its own brands should rival its foreign partners, SAIC president Chen Hong said.

Automakers are also seeking to get a foot in the burgeoning "green" car market in China, where the government is encouraging electric-car development in a drive to reduce the country's notorious air pollution and conserve energy.

China's FAW Group said Tuesday it would invest $1.5 billion to develop clean energy vehicles in the next five years while Guangzhou Automobile Group said it would work with its joint-venture partner Honda Group Co to make electric cars.

"The new energy vehicle opportunity here is probably bigger than in other countries," BMW board member for sales and marketing Ian Robertson said.

"There is a clear agenda to develop (green) technology."

The show, which opened on Tuesday to the media, covers 230,000 square metres (2.5 million square feet) of exhibition space.

About 2,000 car and parts makers from 20 countries are participating, showcasing 75 new car models, 19 of them making their world premieres. A total of 1,100 vehicles will be on display.

Having already conquered China's coastal areas and first-tier cities such as Beijing and Shanghai, the industry is looking to less-developed car markets in the country's vast interior for future growth.

GM, Ford and BMW were among the foreign automakers who also announced plans to dramatically expand their dealership networks throughout China.

Organisers expect 700,000 people to visit the show once it opens to the public for six days beginning on Sunday.


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