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China showcases global muscle at auto show

17 april 2011, 09:46
0
Entrance of the venue of the Auto Shanghai show in Shanghai. ©AFP
Entrance of the venue of the Auto Shanghai show in Shanghai. ©AFP
A security guard walks past a billboard outside the venue of the Auto Shanghai show in Shanghai. ©AFP
A security guard walks past a billboard outside the venue of the Auto Shanghai show in Shanghai. ©AFP
The world's top car makers head to China this week for the Shanghai Auto Show, where they hope to cash in as the sector reels from last month's earthquake and tsunami in Japan, AFP reports.

After two years of booming sales, the growth in China's auto market -- which in 2009 overtook that of the United States to become the world's largest -- tapered off to eight percent year-on-year in the first quarter of 2011.

That slowdown -- which still meant the sale of 4.98 million units -- comes as Beijing winds back stimulus measures put in place to combat the global financial crisis and curbs the number of licence plates issued in the capital.

But analysts remain bullish about the market's prospects, as the number of car owners is still relatively small compared with the country's massive population of more than 1.3 billion.

"The centre of gravity for activity is clearly moving towards China," Patrick Blain, president of the International Organisation of Motor Vehicle Manufacturers, told AFP earlier this month.

"One advantage that China has is its centralised economy," said Carlos da Silva, a Paris-based analyst for Global Insight.

"The periods of slowdown are also due to the government's wish to avoid overheating," he said.

The show, which opens Tuesday to the press, covers 230,000 square metres (2.5 million square feet) of exhibition space in Shanghai's Pudong high-tech district, 35 percent more than for the show two years ago, organisers said.

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

Organisers are expecting 700,000 people to visit the show during the six days that it is open to the public, from April 23-28.

As the first auto show since the March 11 twin disasters in Japan, where a large number of auto components are made, Shanghai will also allow industry heavyweights and analysts to gauge the impact of the catastrophe on the sector.

"By mid-April, the slowdown in Japanese factory output has meant that 800,000 fewer cars were made there," Da Silva said, adding that plants outside Japan were "just starting to suffer".

The analyst estimated that by month's end, 25,000 fewer cars would have been made in China, 55,000 fewer in Europe and 68,000 fewer in North America as a direct result of the crisis in Japan.

The show will also allow Chinese car makers, still mainly focused on small models marketed to customers with modest means, to showcase their more upmarket vehicles that will pose a direct threat to foreign manufacturers.

"The Chinese builders occupy 30-31 percent of the total market share. But in terms of revenue, they only account for around 17 percent," John Zeng, an analyst at J.D. Power in Shanghai, told AFP.

Jia Xinguang, an independent industry expert in China, added that "green" clean energy cars would also win attention in Shanghai.

"A Chinese development plan for these vehicles should be made public in the first half of this year," Jia said.

Last year, local media reported that the government was planning to spend $14 billion by 2020 on clean-energy vehicles, but the details of the plan were never published.

Among the world premieres, Volkswagen will unveil its new Beetle, GM will feature its new Chevrolet Malibu and the Buick Envision and France's PSA Group will debut its Citroen DS5.

China's Geely, which bought Volvo last year, will show off 36 new models, according to organisers.


By Boris Cambreleng

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