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Auto makers show off vehicles in key China market
by Staff Writers
Shanghai (AFP) April 20, 2013

Buyers swarm opening of China auto show
Shanghai (AFP) April 21, 2013 - Chinese buyers swarmed around hundreds of vehicles at the Shanghai auto show at its opening on Sunday, highlighting the importance of the world's largest car market to manufacturers.

Chinese and foreign automakers used models dressed as Playboy bunnies and dance performances to capture the eyes of potential customers, while long lines formed to try out driving simulators at one Japanese company.

Among the shoppers was entrepreneur Ou Yang, who browsed the sleek black vehicles on offer by luxury German car maker BMW.

"Since I enjoy driving very much, I prefer cars with higher maneuverability. As for the appearance, personally I pay more attention to the interior than the exterior," he said.

China's auto sales reached 19.31 million vehicles last year, a 4.3 percent rise from 2011, according to a Chinese industry group. The country has been the world's largest auto market since 2009.

Competition has become more intense as sales growth has slowed since 2010 and more companies have piled into the promising market.

"The bar is very high today, compared to five or eight years ago," said Sha Sha, who leads consultancy McKinsey's Automotive & Assembly Practice in Greater China.

But she added: "Given that China is such a sizeable growth market, the game is fair for both incumbent players and really competitive attackers."

Sales of Japanese brands in China have suffered since last year amid political row over disputed islands that sparked street protests across the country and calls for boycotts.

Toyota's China president, Hiroji Onishi, said he expected sales to recover later this year as the company launched new products, despite the lingering anti-Japanese sentiment and more competition.

"The market is growing very large. That means competition is only going to increase among the various players," he told reporters.

Another visitor to the show said he would not buy a Japanese car, after he viewed luxury Cadillacs from US auto giant General Motors.

"I would definitely not buy a Japanese car... because of national sentiment," said the Chinese public servant, who declined to be named.

Global car makers Saturday showed off hundreds of gleaming models in glitzy demonstrations ahead of the Shanghai auto show, as they compete for attention from the world's largest market -- China.

The rapidly growing Asian giant is crucial for foreign car makers, which now account for over half the Chinese market, as Europe battles a debt crisis and the United States struggles to put its economic recovery on a firmer footing.

"China is by far now the world's largest market and a driving force behind global industry growth," said General Motors Vice President for Global Manufacturing Tim Lee, ahead of the show's official opening Sunday.

GM sold 2.84 million vehicles in China last year, a record for the company, and will launch 17 new or updated models in the country this year.

The Shanghai auto show is expected to attract more than 800,000 visitors over the course of nine days and car manufacturers displayed their wares to hundreds of journalists on Saturday.

A six-foot blonde model in a silver jumpsuit on the stand of German chassis technology company ZF competed for attention with a promotional team dressed as traditional Chinese soldiers at the sprawling venue in China's premier Pudong development zone.

China became the world's largest auto market in 2009. Last year, its auto sales reached 19.31 million vehicles, a 4.3 percent rise from 2011, according to a Chinese industry group.

Sales growth has moderated since 2010 as China's economy slowed and as some Chinese cities put limits on car numbers because of concerns over congestion and pollution, but the country still offers better prospects than most parts of the world.

"Certainly, we have seen more dynamic times in China," said Dieter Zetsche, chairman of the board of management for Germany's Daimler and head of Mercedes-Benz Cars.

"But, on the other, hand there are still many reasons to believe in decent growth (in China)," he told journalists.

Japanese car makers' sales in China have suffered since last year amid a political row over disputed islands that sparked street protests across the country and calls for boycotts.

Japan's Nissan Motor Co, which unveiled a sporty "concept car" flanked by models in white dresses, said China remained its largest market with annual sales of around 1.2 million vehicles.

"We are confident about our prospects here and we will grow with China," Andy Palmer, executive vice president of Nissan, told a news conference.

The rapidly growing SUV (sport utility vehicle) and premium car segments were on full display in Shanghai, as Chinese consumers look for more space and more luxury, executives said.

Mercedes-Benz launched a premium compact, the GLA, as it seeks to make it luxury cars more affordable to Chinese buyers.

And Ford Motor Co., which lags its US rival GM in China, said it planned more offerings for its luxury Lincoln brand in China.

"China will be the largest luxury car market in the world, bigger than Western Europe, bigger than the US," said James Farley, executive vice president of global marketing for Ford. "So it's important."

Chinese auto companies were seeking to build brand recognition in a country where the modern auto industry dates back only three decades.

"It seems such a shame not to... find the inspiration to create something that is little different from the German cars, the Japanese cars, the American cars," said Peter Horbury, vice president of design for China's Geely group which launched a locally-developed "concept car".


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