China is cementing its reputation as the most important market
for the car industry. Chinese car sales are up 13 percent
from a year ago, with sales expected to top 20 million this
year. By comparison, total sales in the United States this
year are forecast at just a little more than 15 million
vehicles. The importance of the Chinese market is reflected
in the size and sophistication of the Shanghai motor show, where
manufacturers are capitalizing on China's growing demand for luxury
cars and SUV's.
Order books are bulging and consumer confidence
is high, with China's growing middle classes prepared to invest
heavily in style and image.
Ford Motors' Dave Schoch is counting on it. "So you've got 30
million customers out there, all with different tastes and
different affordability levels. And what Ford wants to do is
bring the power and leverage of our global line-up, you know from
small to medium to large, into China" Schoch said.
But the competition is fierce.
"We are increasing our local content here in this country. And
next month we are opening the first engine plant with the capacity
of 250,000 units outside of Germany for Mercedes engines," said
Daimler AG Chairman, Dieter Zetsche.
The Chinese see cars as a potent symbol of success. Autoforesight
analyst Yale Zhang says the rising demand for premium and luxury
automobiles reflects China's emergence as an economic
"This market is becoming more like European or American style
entry-level premium like Mercedes C-class or BMW-3 series.
This kind of entry-level premium is growing very fast," Zhang
Demand has been especially high for larger, sport utility vehicles
(SUV's). Karsten Engel, who heads BMW's China Group, says the
roomy interiors appeal to China's newly rich -- even though some
will probably never drive them.
"The ultimate driving machine, you probably experience a lot from
the rear seat with your driver, so you need more space, you want
more space. You want to have the possibility to work in the
car," Engel said.
That's something luxury automaker Bugatti's marketing director
Stefan Brungs understands. "This is what the Chinese have learned
and perceived as luxury -- to sit in the back and be chauffeured,"
Despite the high demand for larger automobiles, environmental
issues and fuel consumption concerns are contributing to the
heightened interest in green, fuel efficient vehicles.
"Four years ago, when we introduced the concept of the electric
car, most of our colleagues in the industry thought that we had
lost our minds. Now it doesn't look so stupid, you know?,"
said Nissan's Asia Vice President Andy Palmer.
But for now, analysts say new hybrid and electric technology is
likely to take a back seat in China. Despite higher
government taxes on larger gasoline combustion engines, new data
show sales of SUV's are up nearly 50 percent from a year ago and
likely to double by 2015.
If YOU are considering buying a new
vehicle and you are a police officer (serving or retired), a
special constable or a member of police staff (or a partner of any
of these) then you can take advantage of some of the best deals
available on your insurance. You'll be amazed how much YOU can save
with POLICE INSURE.