Shanghai Auto Show random thoughts and a look at China EV market through auto show eyes
I went to the Shanghai Auto Show in April. More specifically, I was there on press day, April 20. The Shanghai show venue is gigantic. Enormous. Stupendously huge. Wear comfortable walking shoes. Even then, I always feel a bit dazed while there, though some of that may be jet lag now that I fly in a few days before to attend. It was rainy and cold on April 20.
A few random thoughts:
Chinese automakers have really improved their design language. Used to be bad or weird. Now that many use the same design houses as the foreign automakers, and the others copy foreign automakers’ design, Chinese automakers’ vehicles are nice looking. But boring, just like most of the vehicles I saw at the show. Still, it is an improvement.
Local automakers are trying to impress with their innovation in engines and transmissions, but they aren’t there yet. They still borrow or copy much. Separate blog soon on that from interview with Gary Tan, head of Ricardo China. www.ricardo.com
Mercedes www.mercedes.com is really trying to boost China sales. The Mercedes stand was huge. Half a hall. Not surprising. The luxury market in China is one of the fastest growing – sales rose 25% in the first two months of the year to 116,606 units according to LMC Automotive. The passenger vehicle market as a whole rose 22% in the first two months of the year, though it fell 6% in February. China’s luxury car segment is seen as the holy grail of China’s automotive market. http://www.forbes.com/sites/kenrapoza/2013/03/07/luxury-car-market-turning-chinese/
Mercedes is lagging in China http://www.businessweek.com/articles/2012-10-25/mercedes-needs-to-rethink-china . It sure garnered some press with all the money it spent before and during the show. That might result in bigger market share. But Mercedes www.mercedes.com.cn is still viewed as a bit less cool than BMW www.bmw.com.cn and even Audi www.audi.com.cn in China.
Not sure what GM’s plan is for Buick www.buick.com.cn in China. The Buick stand was boooring. All the cars were champagne color or silver. Or so it seemed to me. The Chevy stand was filled with color and sound and new and old Chevy models. Dan Akerson, GM’s chairman, has said Chevy and Cadillac will be the focus of GM’s global push. http://europe.autonews.com/article/20130225/ANE/302259730#axzz2SAlFKze1 Bob Socia, president of GM China, said at a press event during the show that GM’s focus in China would be luxury –which I figure means Caddy — and SUVs. The SUV market is the other holy grail of China’s auto market– up 19% in the first two months of the year. GM says it will introduce 9 new or refreshed SUVs to the China market over the next five years. Here is anotgher take on the press event: http://online.wsj.com/article/SB10001424127887324493704578432144026830614.html
Where does that leave Buick? Buick is big, big, big for GM China. I guess GM could launch a Buick-badged SUV in China, but Buick is better known there for its executive van, the GL8. It will be interesting to see how Buick fits into GM’s future in China given it is being relegated to the back of the line in the rest of the world. To be fair, GM’s Riviera concept car, another fishlike concept car from PATAC, was badged Buick. But it is only a concept….
The youth market is in! The Chevrolet www.chevrolet.com.cn presser was all about appealing to the youth market, which makes sense. Relative youth will even be the focus of GM’s Cadillac marketing effort, it seems. According to GM, the average luxury car buyer in China is 35 to 40 years old, ten years younger than in the U.S. Other automakers were also courting the youth market at their stands and in their pressers (admission: I didn’t make it to that many pressers this year. Was too busy walking around looking at stuff….).
As for electric vehicles, they were everywhere and nowhere, sort of like their market presence in China. Every automaker an EV or two in its stand. SAIC had a row of six EVs: The SAIC 550 PHEV, the SAIC BEV550, a Shanghai brand Light Weight Fuel Cell Vehicle, the Roewe 750 light hybrid, the Shanghai Volkswagen e-Lavida sedan, and the Springo BEV from Shanghai GM.
Impressive, but then I ask the young men at the stand which of the EVs are available to buy right now. Only the Roewe 750 is on the market, and sales are slow. The PHEV will launch later this year, they said. Shanghai GM www.shanghaigm.com just started production of the Springo pure EV, David Dunahay, interim executive director of electrification strategy told me. GM is going to “bring it out slowly,” he said.
The GM Riviera concept car was a PHEV. Does that signal the future direction of GM’s www.gmchina.com EV strategy in China, I asked Dunahay? “I wouldn’t take it as a signal,” he naturally told me. “We want to participate in a variety of (EV) segments.”
BYD www.byd.com wasn’t touting it pure-electric car, though it did have the next-gen e6 pure BEV at its stand. Rather, it highlighted the latest generation of its “Dual Mode” hybrid technology, embodied in the Qin electric vehicle. BYD claims the BYD DMII Qin can go 50 kilometers in pure electric mode. It will be launched in the third quarter of 2013, said a BYD spokesperson.
(An aside. I attended the opening of a BYD manufacturing plant here in California on May 1. It will initially produce electric buses. There were several e6 crossover EVs there. They are intended for fleets, I was told. Check out the rest of the story at http://www.plugincars.com/chinas-byd-opens-electric-bus-production-plant-california-127131.html )
Great Wall www.gwm.com.cn had a tiny EV called the Kulla, but it was just for show and likely will never go into production. The star of its booth, as befitting a company that is China’s largest SUV producer, was the H7 luxury SUV with a traditional engine. But, Great Wall’s stand also had a Haval SUV plug-in hybrid electric. Production will begin in 2015, I was told. Great Wall plans to offer PHEVs across the entire Haval lineup in the future, Wang Dingcai, a new energy vehicle engineer at Great Wall’s engineering institute told me.
Word is that Beijing will issue a revised EV policy soon (not soon as in “mashang,” which could mean years, but soon as in “xianzai,” a matter of weeks) and the new policy will subsidize plug-in hybrid electric vehicles and even regular old hybrids at higher rates. The way the subsidy is distributed may also be changed. Right now it goes to the manufacturer; it may become a direct-to-consumer subsidy.
But no one knows for sure which technologies will be favored. A Ford China executive put the situation in China’s EV sector bluntly: “Automakers don’t know what technology the government supports so we have to support them all,” said J.D. Tang, head of marketing, sales, and service for Ford Motor (China)’s import business. www.ford.com
Ford China is taking a cautious approach to China’s EV market. It showed no electric vehicles at its stand in Shanghai. It is waiting to see what types of EVs there is market demand for, said Kumar Galhotra, vice president of product development at Ford Asia Pacific. “You have to have technology and we have it,” he told me. “But whether or not we deploy it will come down to a demand for it. It is not something that can be forced on the market.” Tell that to Beijing.