Our man in China, Sven Serrano, continues Car Wars.
Volkswagen in the lead...
Volkswagen leads the way, thanks to its early arrival and link up in China with local partner SAIC in 1984. A naturally upbeat VW CEO Martin Winterkorn promised to introduce at least 4 new or updated car models for the Chinese market each year, with a commitment to reduce fuel consumption and emissions by 20% by 2010.
For the still growing luxury market, German manufacturers Mercedes Benz and BMW, had the largest exhibits in Shanghai, while U.S. carmakers Ford, GM and yes, even Chrysler shrugged off bailout worries for a few days here in China as they sought to woo buyers. GM China had about 37 vehicles on display with plans to double its annual sales to 2 million units over the next five years.
Running a strong second are the Big Three of Japan; Toyota, Honda and Nissan. While most of these sales are from local joint ventures, a small number of imports, from Japan reach China and are snapped up by discerning buyers, despite the high tariffs China slaps on incoming cars.
As Japanese car makers seek to lure Chinese drivers with their reputation for quality, durability and gas mileage, at least two makers, Honda and Nissan, are considering exporting cars made in China by their production units to other parts of the globe and possibly to Japan itself in an effort to cut manufacturing costs.
While overall numbers are smaller, Mazda reported its sales in China in the January-March quarter rose. Mazda operates a three-way car manufacturing venture in China with its top shareholder Ford Motor Co. and local partner, Changan Automobile Co.
Nissan greening up to make its run at the lead spot...
Nissan is eyeing the green future in China as the next line of subsidies from Beijing may be for electric cars, with as much as 60,000 RMB ($8,800) becoming available for fleet buys by taxi companies and local governments. In the inland city of Wuhan, known as ‘China’s furnace’ for its hot summers and over-heated radiators, Nissan is planning to provide free electric cars and recharging stations to the city in cooperation with the municipal government in a pilot program designed to see if such systems can be both sustainable and in the long run, profitable. It is expected to go online in 2011.
All manufacturers, both Chinese and foreign, will be looking at post-show sales figures in April and May to see if the sales boom will be a long term trend or a flash in the pan. China and its army of new drivers still face three major challenges – traffic, high prices for imported oil, and air pollution.
When this writer first arrived in Shanghai last summer, I considered buying a car immediately and taking to city’s challenging traffic in a locally produced VW or Skoda (a Czech VW subsidiary), but I’ve put that off until an affordable mid-sized electric or hybrid becomes available, hopefully in a few years.
Visitors to Shanghai might have missed the big show but a trip out to the suburb of Anting to the world class Shanghai Automobile Museum will more than make up for it. There, Red Banner Limousines park next to 1920s Rolls Royces and 1950s Wide-finned Cadillac convertibles. An original Mercedes Benz horseless carriage from the 1880s will remind you just how far down the road China and the World have come.
Read Car Wars - Part 1
**Additional sources cited: Bloomberg.com, China Daily, Xinhua News Service.
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Sven Serrano, is a free-lance writer specializing in Green Business and Investment issues, now living in Shanghai. A former Sierra Club employee, he worked as a university lecturer in Japan for over a decade, before moving to China last year. He is currently shopping for an alternative fuel hybrid electric car.
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