Business

Shanghai auto show: Global car makers rev up in China

Global car makers are increasingly choosing to unveil their models at Auto Shanghai, the biggest show in the world's top vehicle market.

Visitors to the show will be the first to see highly anticipated releases, including the Chevy Malibu 2013, BMW Concept M5, Subaru XV, Citroen DS 5, Audi Q3 and Mini Inspired by Goodwood.

Introducing a line-up of Ford Motor's electric concept cars, the US car maker's Asia Pacific and Africa president, Joe Hinrichs, told BBC News his combined region would account for 70% of company growth in the next 10 years.

"The opportunities for Ford are tremendous, so we're bringing the products here to realise more growth," he said.

In the next four years, Ford plans to offer another 15 vehicles in China and double its headcount in the country by hiring another 1,200 employees.

Its country sales grew by 20% in March 2011, while its larger rival General Motors reported flat sales.

Mr Hinrichs said Ford's strategy was to reach previously untapped buyers in China's interior.

Image caption Car makers are targeting new buyers like Wang Kui

"The larger cities and the eastern seaboard have saturated a bit in the market," he said.

"The tier-two and tier-three - and even tier-four and tier-five cities - are where most of the growth is coming from now. That is why last year we added almost 100 dealers in those smaller cities."

The Detroit auto giant has broken ground on a plant with joint venture partner Changan Ford Mazda Automobile in the south-western city of Chongqing, where it also plans to set up another engine plant.

Ford joins home-grown and overseas rivals in venturing into China's north and west - because overall growth in the country is slowing after years of breakneck expansion.

The Beijing and Shanghai governments have been restricting car sales in order to tame traffic chaos.

Image caption The Mercedes-Benz Concept A-class will go on sale in 2013

And although Ford expects the Chinese market to grow moderately, some experts, including the China Passenger Car Association, say sales could fall by 10% in 2011.

But Mr Hinrichs told BBC News: "We still see 5-10% growth this year and beyond.

"Actually we believe it's a great opportunity to have a sustainable, predictable growth.

"When you see the kind of growth we saw in the last couple of years, it's hard for capacity to keep up with demand and it's also hard to plan for the level of growth for the future."

For German car maker Daimler, the maker of the Mercedes-Benz luxury car, the Chinese market remains red hot - dealers say demand outstrips supply.

Chairman, Dieter Zetsche, said sales in the first three months of 2011 had risen by more than 80%. And Daimler expects China to be its largest overall market within four years.

Image caption Daimler chairman, Dieter Zetsche, says China holds many opportunities for the company

To keep up with demand, Daimler is building an engine plant near Beijing, its first outside Germany, which will begin production in 2013.

"Almost every Chinese is aspiring to acquire a 'Benchi'," Mr Zetsche said, using the Chinese pronunciation of Benz.

"The ones who are in our price range typically can afford to buy a car even if the money supply or credit supply becomes tighter."

Related Internet links

The BBC is not responsible for the content of external Internet sites