An MG sedan, one of the first three cars by Nanjing Automobile (MG), makes its China debut after the Chinese carmaker acquired troubled British MG in 2005 for Pounds 53 million, in Nanjing, east China's Jiangsu Province, March 27, 2007.
(People's Daily Info)
China's home-made car sales surge 22 pct in first quarter
China's home-made passenger car sales surged 22.36 percent year on year to nearly 1.54 million units in the first quarter of this year, according to the China Association of Automobile Manufacturers.
The association said sales of saloon cars jumped 30.14 percent to 1.12 million units, multi-purpose vehicles were up 14.89 percent to 53,300 and sports utility vehicles up 15.77 percent to 71,600.
It said passenger car sales in March reached 567,000 units, up 16.13 percent from the same month last year. Sedan sales stood at 409,400 units in March, nearing the record monthly high of last December. Shanghai General Motors was the top seller with 104,800 saloon cars sold in the first three months, followed by Shanghai Volkswagen and FAW Volkswagen.
Meanwhile, the local automaker Chery sold 89,600 cars, ranking the fourth in terms of sales.
Santana was the top selling model with 49,600 units sold, followed by Excelle, Jetta, Camery and home brands Xiali and QQ, according to the association.
Analysts said car sales in China will continue to enjoy robust growth in the coming years as boosted by the country's rapid growing economy and household incomes.
Jiang Lei, deputy chief of the association, earlier forecasted car sales in China is expected to grow 15 percent to hit 8 million units this year.
China has overtook Japan in 2006 to become the world's second largest market for new vehicles only after the United States with new vehicles sales soaring 25.13 percent to 7.22 million units.
(People's Daily Info)
China introduces Toyota's training program to vocational education
Students of Beijing-based Changping Vocational School were the recipients on Tuesday of 14 new cars from Toyota Motor Corp. to help them learn how to fix them.
The 3.26-million-yuan worth of donation from the Japanese auto giant includes engines and gearboxes. A scholarship of 6.52 million yuan (around 815,000 U.S. dollars) was also established.
Liu Zhanshan, a senior official in charge of vocational education with the Chinese Ministry of Culture, said Toyota introduced its T-TEP (Toyota Technical Training Program) to Chinese vocational schools in 1994.
Students attending the program will have a chance to find jobs in the sale branches of Toyota.
"China is in urgent need for skilled workers in auto industry, " Liu said.
Earlier this year, Chinese Premier Wen Jiabao said China would give more prominence to the development of vocational education. By 2010, vocational middle schools are expected to recruit 8 million students.
Yoshi Inaba, vice president of Toyota Motor Corp., said the Toyota training program is also taught in many other countries to ensure the automaker has enough technicians who know how to fix Toyota vehicles.
"I hope Chinese students taking the Toyota training program make a contribution to the local vehicle industry," he said.
(People's Daily Info)
World leading auto makers eye more than sales in China
Many multinational automotive companies no longer see China as a sales market only, but are making it an important manufacturing, outsourcing, exporting and regional research base.
Such a move is highlighted at the Shanghai Automobile and Technology Exhibition, which opened on Sunday to public visitors.
Rick Wagoner, chief executive officer of the U.S.-based General Motors (GM), said in Shanghai the company would double its production capacity in China by 2010.
Business insiders said that more and more international auto makers would become inclined to base their production in China, attracted by the country's low labor cost and workers with sophisticated skills.
Ford China chairman Cheng Meiwei, also vice president of U.S. auto manufacturer Ford, told Xinhua at the exhibition that China was becoming the most important outsourcing center globally for Ford, and automotive spare parts made in China were assembled in Ford-brand vehicles all over the world.
The GM sedans under the brandname of Chevrolet, produced and sold in the U.S., were also made with many parts from China, just like Ford did.
Statistics from the country's customs show that China exported 11.5 billion U.S. dollars worth of automotive spare parts, accessories and auto bodies in 2006, outpacing the imports by four billion U.S. dollars to report its first-ever surplus in this trade sector.
Wei Jianguo, vice minister of commerce, also saw great potential in the country's export of vehicles and automotive spare parts, forecasting more international auto companies would build China into an important outsourcing base for them. Japan-based Honda already established a sedan production center in the country's manufacturing hub of Guangzhou to replace its factory back in Japan to produce autos that were for sales in Europe.
Yin Tongyao, general manager of China's domestic auto maker Chery, told Xinhua many multinationals had extended hopes to manufacture their brand-name vehicles in Chery factories for sales back in their home countries.
A Buick-brand concept car of GM debuted on the Shanghai auto show actually involved staff from the United States and China with core ideas from a joint technology center organized by GM and its joint venture Shanghai GM, a token of China's growing presence in the research work of multinational auto companies.
Major names like Toyota, Honda and Volkswagen are planning to switch more research and development projects into China, and some preparing to establish a research center in China.
Foreign brands took a 75 percent share of the Chinese market for sedan cars last year, with the top three best sellers being Shanghai GM, Shanghai Volkswagen and FAW Volkswagen, all of which are Sino-foreign joint ventures that mainly produce cars with foreign brands.
Foreign automakers converge on Shanghai for auto show
Foreign auto giants will show off their new models at the biennial Shanghai auto show this weekend, each trying to woo buyers in the booming Chinese car market.
"By 2020 China will be the world's largest market for new vehicles. In fact, the day may come sooner if the market continues to grow at 15 percent a year", said Kevin Wale, president of General Motors (GM) China Group.
GM and its joint venture partner Shanghai GM will display 40 vehicles in a 4,500 square meter exhibition space in Shanghai, including two concept cars - a Chevrolet Volt fuel-cell concept vehicle and a new version of the classic Buick Riviera.
Rick Wagoner, GM chairman and chief executive officer, said his company planned to double the production capacity of its major plants in China before 2010.
Last year the world's largest automaker sold 876,700 vehicles on the Chinese mainland, up 32 percent on the previous year, raising its market share by 0.6 percentage points to 11.8 percent, larger than that of any other foreign producer.
Another U.S. auto giant, Ford Motor Co., is showcasing 52 vehicles from its five brands - Ford, Mazda, Volvo, Jaguar and Land Rover.
The automaker has developed competitive muscle in China in everything from car and engine manufacturing to marketing, after-sales service and R&D, said Cheng Meiwei, Ford China president and chief executive officer.
With declining sales in North America, Ford saw its sales jump 87 percent in China last year to a record 166,722 vehicles and "is running full throttle towards its goal of becoming the leader in the Chinese car market", Cheng added. Japan's Toyota Motor, the world's second largest automaker, is displaying 31 vehicles, with 14 from its Toyota brand and 10 from its luxury brand Lexus.
"China has become Toyota's third largest market after the United States and Japan", said Yoshimi Inaba, executive vice president of Toyota.
The Japanese automaker sold 308,000 vehicles on the Chinese mainland last year, up 68 percent year on year.
"The Shanghai auto show has attracted all the world's major automakers - including DaimlerChrysler, BMW, Honda, Nissan, Ferrari and Porsche", said Wang Lei, speaking for the show organizers.
"None of the big names will be absent", Wang added.
China overtook Japan to become the world's second largest auto market last year, with new vehicle sales of 7.22 million units.
Rising auto sales are mainly driven by sales of sedan cars - passenger cars excluding sport utility vehicles (SUV) and multi-purpose vehicles (MPV) - which grew 37 percent to 3.83 million units last year.
Foreign brands took a 75 percent share of the Chinese market for sedan cars last year, with the top three best sellers being Shanghai GM, Shanghai Volkswagen and FAW Volkswagen, all of which are Sino-foreign joint ventures that mainly produce foreign brand vehicles.
Analysts say China, described as an "auto power" by Zhang Guobao, vice minister of the National Development and Reform Commission, will account for 50 percent of global market growth over the next 20 years.
(People's Daily Info)
China outpaces Germany in auto part exports to US
China exported auto parts valued at U.S.$1.936 billion to United States in the first quarter this year, moving ahead of Germany's export value of U.S.$1.934 billion in the same period, and becoming the nation with the second largest amount of exports to the United States.
During the same period last year, China exported auto parts valued at U.S.$ 1.52 billion to the United States; U.S.$ 1.73 billion were exported from Germany. At present, Japan is still the number one export nation to United States with a U.S.$3.57 billion export value.
China's total export value of auto parts was U.S.$6.132 billion in the first quarter this year, up 32.45 percent more than the same period last year. Of the autoparts exported, the export value of engines were U.S.$221 million, up 19.42 percent more than in the same period last year.
(People's Daily Info)
Chinese Fiats Headed for Australia
A Fiat with a Chinese engine is headed for Australia. Fiat said it would take its new Linea Model ‘ downunder’ once the right type of engine for the market was made available. The Linea, which has just been launched in Europe, is designed for the European market with smaller 1.4-litre and 1.3-litre engines and a manual transmission.
Fiat has recently signed a deal with the Chinese group Chery Automobile to supply Fiat with 1.8-litre and 2.0 –liter engines with an automatic transmission.
The new Fiat is expected to arrive for sale here some time between July and the end of next year and is expected to be a little pricier than the Punto
Fiat has confirmed two more models will join the punto in Australia. The Bravo is next on the list, with the launch set for September.
(Australia China Connections)
China's auto makers to use 12.55 million tons of steel this year
China's auto manufacturers will consume 12.55 million tons of rolled steel this year, Shi Jianhua, deputy head of the China Association of Automobile Manufacturers, said on Monday.
The total will include 9.41 million tons of steel plates and 3.14 million tons of construction steel.
The annual demand will increase to 27.67 million tons by 2010, including 20.75 million tons of steel plate and 6.92 million tons of construction steel, Shi said.
Domestic output still failed to meet demand and imported steel filled the gap, Shi said.
It is estimated that China's automotive industry needed 17.94 million tons of rolled steel last year, a growth of 19 percent on the previous year.
The total included 2.96 million tons for car production, up 24 percent, 7.5 million tons for truck production, up 18 percent, and 1.36 million tons for bus production, up 2.87 percent.
In 2006, China produced 7.28 million motor vehicles, ranking third in the world
(People’s Daily)
Changan to boost its brand
Changan Automobile will invest US$1.6 billion (€ 1.2 billion) in research and development over the next five years with a view to producing 30 self-branded car models and 13 engines. The move would help the company reach total production capacity of 2 million units by 2010, 60 percent of which will be own-brand cars. The announcement comes after a number of Changan’s domestic rivals have unveiled plans to develop higher-quality own-brand cars. Shanghai Automotive will spend US$ 1.8 billion on expansion this year, with priority placed on R&D. Chery Automobile has earmarked US$ 1 billion for R$D over the next decade out of a total expansion budget of US$ 3.9 billion.
(EuroBiz)
Cleaner cars
Diesel could shake off its dirty image and help China’s autos become more eco-friendly By Tim Burroughs
Gone are the days when automobiles in china would crudely fall in one of two categories: plush and pricey models or cheap, unstylish ones that just got you from A to B. New cars by both foreign manufacturers and ambitious local players reflect the functions and fashions of an increasingly diversified market. They are also likely to be greener.
China is working from a very low base when it comes to alternative-fuel cars, but recent auto shows have been notable for the high-profile appearance of hybrid vehicles as well as cars powered by exhaust-free hydrogen fuel cells.
Honda, GM, ford and BMW all had such vehicles on display at the Shanghai Auto Show in April. Not to be outdone, local manufacturers Shanghai Automobile industry Corp ( SAIC) and Chang’an Automobile brought along experimental fuel-cell sedans and gasoline-electric hybrids. Chery Automobile even showed models that run on vegetable oil, natural gas and ethanol.
“Everyone is talking about green vehicles,” says Philippe Coquelle, director of automotive research at market research firm ACNielsen China.
Pariah of pollution
Transport – and the carbon monoxide and nitrogen oxides vehicles produce – is now regarded as the key contributor to rising urban pollution. The push towards alternative fuels is unsurprising considering Beijing’s plans to increase energy efficiency and the international Energy Agency’s recent warning that China could overtake the US to become the world’s largest emitter of greenhouse gases as early as next year.
What may come as a shock to many Chinese people is that diesel, still widely associated with noisy trucks that don’t start in winter, could be the answer. Nearly 80 percent of commercial vehicles in China run on diesel but penetration in the passenger car market is just 1.2 percent. In Europe, it is 40-50 percent, according to Citigroup.
Modern-day diesel produces fewer emissions and is 20-30 percent more economical than gasoline.
“Volkswagen is confident that modern, fuel-saving and environmentally friendly diesel passenger cars are one of the best available solutions for China’s car industry and consumers,” says a spokesperson for the German automaker, which has been selling diesel engines in China since 2002.
Volkswagen plans to reduce fuel consumption and emissions by more than 20 percent by 2010 for all vehicles produce through joint ventures with first Auto Works and SAIC, which together cleared more than 700,000 units in 2006. Contributing to this will be a growing market for diesel engines in passenger cars, of which Volkswagen expects to have a 5-10 percent share by 2010.
But the company admits that it is difficult to make accurate predictions
First of all, despite the central government announcing several policies favouring energy-saving cars, there are still bans on the sale or use of diesel-powered vehicles in many cities.
Then there is the fuel itself. The economical and comparatively eco-friendly diesel vehicles now found in Europe meet Euro III emissions standards and above and require high-quality diesel to achieve this. Meanwhile, China’s State Environmental Protection Administration （SEPA）only brought in Euro III at the start of 2007, and it remains to be seen how effectively it can be enforced.
Even if the right car is united with the right kind of fuel in one town, there is no guarantee it will be the same a few kilometers down the road.
“The diesel quality in China varies form city to city or even form filling station to filling station,” says spokesperson for Volkswagen. “This factor currently limits the wide use of diesel cars in China.”
Green progress
However, some industry experts believe that developments in the country’s power industry will lead to change. Beijing is keen to promote coal liquefaction as means of turning the country’s abundant coal reserves into much-needed fuel and reduce its dependence on imports. Alternative fuels such as methanol and dimethyl ether will be produced by this nascent coal chemical industry as well as gasoline, aviation fuel and diesel.
Shenhua Energy, the nation’s largest coal supplier, says last year it had eight coal liquefaction projects in development, there of them scheduled for completion by 2010.
“ the coal-to-liquid fuels that will come out of the new coal conversion projects will meet the Euro IV standard,” says Jim Brock, a Beijing-based independent energy consultant. “ as these fuels come online we will see more diesel cars being launched. The question is : how fast can it happen?
Price will play a role. A litre of diesel currently costs about 12 percent more than a litre of gasoline. Retail fuel prices are already subsidized in China and it is possible that the government could intervene and reduce the gap. However, it is only worth taking such action if it is matched by efforts to develop the entire supply chain.
“ The whole system has to be revamped from the upscale production of diesel down to getting the fuel into the gas stations,” says Charles Cheung, head of regional autos at Citigroup.
Bearing in mind the financial and public perception obstacles that lie between diesel and the passenger car market, there is little doubt that this reform requires a firm push from Beijing. If a demand base can be established, the automakers can be relied upon to supply more diesel- powered models.
“Once the infrastructure is in place, we will bring the vehicles,” says joseph Liu, executive director ofr vehicle sales, service and marketing at GM China.
(EuroBiz)
China's passenger vehicle sales rise 24 pct in first seven months
China's passenger vehicle sales rose to 3.54 million in the first seven months this year, up 23.7 percent from the same period last year, according to the China Association of Automobile Manufacturers.
Sales of sedans jumped 26.6 percent to 2.64 million, sports-utility vehicles soared 46.4 percent to 187,600, while multi-purpose vehicles went up 17.8 percent to 124,400.
Passenger vehicle sales in July, however, declined by 10.45 percent from the previous month.
Changan Auto, one of China's auto manufacturers, saw the largest sales decline of 49.3 percent in July, followed by SAIC-GM-Wuling Automobile, down 15.8 percent, according to the China's Passenger Car Association.
Yang Dayong, deputy director of the Changan auto marketing department, explained, "July is an off-season for car sales. People just don't want to get out to buy cars in hot weather. Also minivans, largely used for carrying farm tools or agricultural products, are not demand because July is not a harvest season."
He also said a year-on-year comparison was more revealing as it excluded seasonal factors. Changan Auto's sales volume, compared with last July, still increased.
The three largest Sino-foreign carmakers continued to be the top three sellers. FAW Volkswagen was first with sales of 258,563, followed by Shanghai Volkswagen and Shanghai General Motors.
The indigenous carmaker Chery sold 197,923 vehicles, maintaining its fourth place.
The top ten sellers, which also included Guangzhou Honda, FAW Toyota and Geely, held a 64-percent market share.
(people's Daily)
Used car sales set to accelerate in China
After many years of boosting new car sales figures, China's motorists are increasingly wanting to upgrade, bolstering its fledgling used car sector.
Second-hand car sales totaled 2.7 million in 2006, according to the Ministry of Commerce, less than half that of the new car sales. Compared with developed countries, where used car sales are double or triple new car sales, China's used car market has a huge potential.
A survey by Sinotrust, a leading consulting company, shows China's new car owners keep their vehicles an average of 6.5 years, while 71.2 percent choose to purchase a new car after three to five years.
In Beijing, 170,000 used cars were sold in the first half and the ratio of used to new car sales reached 0.85:1, while two years ago, it was only 0.54:1, a CADA official said.
Xu Dong, deputy general manager of a Guangdong-based dealer, said used car sales would accelerate as 4S (franchise dealers in "sales, spare parts,service and surveys") and overseas used car dealers entered the market.
Li Xiaokuan, deputy director of market administration of the State Administration for Industry and Commerce, suggested manufacturers pay more attention to used cars sales. "Trade-ins could not only open up a new profit area, but also enhance their new cars sales."
He said China's used car sales rules had no restrictions on 4S dealers selling second-hand cars, and they should include the used car trade-in in their main business scope.
However the sector still faced problems, including dealer reliability, asymmetric information, lack of industrial standards, and contract problems.
Li said the industry and commerce administrative system had begun on monitoring dealers' credit worthiness. They would publicize the credit information, and restrict dealers business scope if they were found to have credit problems.
(people's Daily info)
China's auto output, sales both to hit record 9 mln units in 2007
China's auto output and sales are both expected to hit a record nine million units this year, said Zhang Xiaoyu, vice president of the China Machinery Industry Federation.
The figure, compared with a previous prediction of 8.5 million, would enable China to reach its auto production and sales targets for the 2006-2010 period three years in advance, said Zhang.
China's muscle-flexing and exhaust-emitting auto industry maintained strong momentum in the past five years, with output soaring an annual average of 26 percent.
Last year China surpassed Japan to become the world's No. 2 auto market, with total sales of 7.2 million vehicles and output of 7.3 million.
The country produced 4.5 million vehicles in the first half of 2007, up 22.4 percent on the same period of last year, while sales rose 23.3 percent to 4.4 million, according to the China Association of Automobile Manufacturers (CAAM).
(people's Daily info)
Green' the magic word at car show
Reducing emissions and raising fuel efficiency are the magic words at the Frankfurt International Motor show (IAA) as manufacturers and suppliers go all out to out-do each other - or at least out-talk each other.
Cutting greenhouse gas emissions from one of the prime suspects blamed for climate change is on everyone's mind this year - from luxury carmakers to tire makers, from sat-nav producers to car clubs teaching fuel-saving driving techniques.
"We're stopping emissions, not emotions," BMW chief executive Norbert Reithofer told journalists. "We want to show you can still have fun driving without harming the environment."
Environmentalists might dispute that, noting the gas guzzlers with up to 530 horsepower on display at this edition of the car show, and have rejected the notion that cars can be "green", "clean" or "environmentally friendly" in any way.
Yet BMW and other leading carmakers did offer more than just hot air on Tuesday, the first day of the world's largest car show. BMW presented a hybrid sports activity vehicle Concept X6 (SAV) due out in 2009 that it said will slash emissions.
"We've been working on this for the last five years, long before it became an issue for the media, politicians and the public," Reithofer said as BMW beat the rest of the German industry into the increasingly popular arena of hybrids - that reduce emissions by combining combustible engines and batteries.
Reithofer said BMW's long-term goal was to make cars that would be powered without the use of fossil fuels at all.
Mercedes-Benz brand said it will begin serial production within three years of a small car powered by a zero-emissions hydrogen fuel cell."
There was also a buzz in the vast Volkswagen exhibition hall around the new concept car model called simply "Up!" - a rear-engine, three-door four-seat vehicle that sips just three 3 liters of fuel per 100 km - and is to be sold for less than $13,830.
"Volkswagen has been working for a long time on fuel efficiency," said Volkswagen chief executive Martin Winterkorn, rejecting criticism that they and other German manufacturers had been asleep at the switch in developing low emission cars.
Also drawing a sizeable crowd of interested onlookers among the thousands of journalists was Volkswagen's new SUV - the "Tiguan", a smaller and cheaper version of its Touareg model.
General Motors' Opel unit presented an electric concept car called the "Flextreme" it hopes to bring out in 2010.
Opting for an electric car rather than a more expensive hybrid, Opel said the battery-powered car can hit up to 160 kph and its lithium battery can be charged by plugging into a socket or with a small turbo diesel motor.
But it is not only the carmakers talking about climate change. Michelin presented what it called a world premiere - its "energy saver" tire that it said can save 3 liters of fuel per 1,000 km by reducing rolling resistance.
Not everyone, however, was convinced carmakers had suddenly become true believers in the fight against climate change.
"Some of the carmakers have finally got the message that they have to do more to protect the environment," said Winfried Hermann, a member of parliament for the Greens party that had a stand at the IAA for the first time this year.
"They put on a massive advertising campaign before the IAA about cars and the climate. But unfortunately the campaign is far ahead of the cars they're showing. These cars are nowhere near as climate-friendly as they're selling it to us."
(people's Daily info)
Chery teams up with Fiat
China’s largest domestic car maker Chery Automobiles (奇瑞汽车) signed a memorandum of understanding on August 6 with Italian car giant Fiat to manufacture Fiat, Alfa Romeo and Chery brand cars for the Chinese market. Production of the new Chery-Fiat Vehicles will commence in 2009 in Wuhu, Anhui Province. Chery expects that the joint venture deal will produce 175,000 cars are year. The 50-50 joint venture is Fiat’s second foray into the Chinese market. Fiat signed a joint-venture deal with Nanjing Automobile (南京汽车) in 2001， However, the deal has not performed as expected, promoting Fiat to look for alternative Chinese partners to boost production and sales. Last month, Chery’s one millionth car rolled off the production line, making it the first Chinese car manufacture to pass this milestone.
(China International business)
Ford’s China Renaissance
David G. Thomas, former general manager of Chang’an Ford Mazda Automobiles, was a key player in the car manufacturer’s recent China success. During the first half of the year, sales of Ford/Mazda in China rose 57% year on year, up to 100,000 cars, compared with 50,000 sold during all of 20004. However, there is still work to be done. According to Thomas, Chinese consumers still tend to associate Ford with “big American cars, pick-up trucks and gas guzzlers.” China’s car buyers are the world’s youngest, so Ford has to create a new image to appeal to younger consumers, based around individuality and personality. Thomas is packing his bags for Detroit in the fall, where he will work alongside Ford CEO Alan Mulally. “The US market really needs David Thomas’ China experience,” Mulally explained.
(China International business)
Beijing to introduce tougher auto emission standards ahead of Olympic Games
Beijing will introduce tougher auto emission standards at the beginning of next year, as air pollution has become a major concern for the city in the preparation for the 2008 Olympic Games.
It is expected the new standards will reduce the amount of sulphur dioxide pumped out onto the streets of the nation's capital by automobile exhausts by 1,840 tons every year, said Feng Yuqiao, an official with the Beijing environment protection bureau.
Automobile distributors in Beijing are preparing for the new China IV standards that are equivalent to the Euro IV standards in the European Union, the official added.
Feng also said: "All the gas stations in Beijing will provide gasoline and diesel that meet the requirements of the new standards starting from Jan. 1."
The current China III standards, equivalent to the Euro III standards, have reduced sulphur dioxide emissions from automobile exhausts by 2,480 tons annually since it was enforced at the end of 2005, according to the official.
Officials believe it's not enough. "Air pollution caused by automobile exhaust is still serious," Feng said.
To reduce pollutants in emission, some buses in Beijing have already used fuel that meets the China IV standards.
There are 3.1 million motor vehicles in Beijing at present.
Despite a rapid increase in the number of motor vehicles in recent years, Beijing has managed to reduce nitrogen dioxide and carbon monoxide, two main pollutants in exhaust emission, in the air.
Nitrogen dioxide in every cubic meter of air reduced by 10.8 percent between 1998 and 2006, or from 74 gammas to 66 gammas per cubic meter, and carbon monoxide decreased by 33 percent from 3.3 milligram to 2.2 milligrams per cubic meter.
About 40 percent to 50 percent of the major pollutants in Beijing's air -- nitrogen oxides, carbon monoxide and inhalant particulate matter -- come from vehicle exhaust emissions, according to Zhu Tong, one of the expert panel for Olympics air quality protection and also a professor of the environment science and engineering school at Beijing University.
Beijing's air quality will be greatly improved after air pollution control measures take effect and construction works are finished ahead of next year's Olympic Games, Zhu said.
(People’s Daily)
Members only
Luxury car clubs offer a social network for the elite
A line of US$64,935 jeeps circles around the parking lot of the Agricultural Exhibition Hall in Beijing at six o’clock on a Saturday morning. Before the city wakes, a 10-jeep convoy of the Beijing Land Rover club has departed its habitual meeting point for a trial drive in the shadow of the Great Wall in Changping region north of Beijing.
Once a month, the drivers take on sand hills and rock formations during weekend competitions in Inner Mongolia, a four-hour drive from the capital. Longer trips have taken club members to remote mountainous regions like Donghuang and Xinjiang.
Networking opportunities
Clubs for drivers of luxury car brands are few and far between compared to the legion of associations that cater to owners of the locally made Chery QQ and Chinese-made Volkswagen Polos, said Li Li, a club coordinator and presenter on Beijing’s popular Traffic Radio.
Li takes calls from driving enthusiasts and car clubs on her daily FM103.9 show. “Owners of luxury cars tend to be more discreet,” she said. “They form clubs to share interests rather than just to drive and often split into smaller groups and do the things they like.”
Interestingly, an increasing number of female participants is driving the growth of car clubs across all brands.
Few high-end auto clubs charge an annual membership fee. Instead, members mingle and enjoy perks at car club soirees. Mercedes-Benz club members and guests received VIP cards at a party to launch the Ningbo Mercedes-Benz Club in March this year, along with a glass model of the car to commemorate the event. The VIP card gives discounts at selected local restaurants, boutiques and health clubs.
The club is more of a social outlet now, but will develop to offer technical help.
“Mercedes-Benz club gives car owners a platform to come together. In the future, the club will give services and advice, like a car nanny,” said club member Wang Li.
Marketers drawn to the affluent crowd help car clubs front some of the costs for club events. In Bentley’s showroom, silver and black versions of its best-selling model, the Flying Spur, are parked alongside displays for the Scottish whiskey label Royal Salute. The liqueur brand co-sponsors some of the events for Bentley China, which hosts an average of four parties a year for its customers.
“We pour whiskey and wine and invite pop stars to come along,” said Hu Hailong, sales manager at Bentley Beijing.
Club perks aside, members sometimes just enjoy each other’s company. “Outside of Porsche club events in Shanghai, Porsche owners participate in various activities together,” said club member Han Qimeng.
Twenty members of Beijing Land Rover club will spend seven days driving to westerly Xinjiang over the upcoming National Day break. A service car with Land Rover parts and a mechanic accompanies the drivers on long trips. Some members drive there and fly back. Four people travel in each jeep and split the bills. Naturally, they all stay in top quality hotels or brave the elements beneath the canvas of luxury McKinley tents.
(China Economic Review)
All about the brand
The luxury car segment is dominated by foreign brands but China’s automakers hope to catch a break
Sung Guobao flies up the Chengdu-Duijiangyan highway in his sporty 2006 Jaguar with a caravan of luxury cars following behind. He sits in the back and lights up a cigar from the Dominican Republic as his car reaches the off-ramp for the city of Dujiangyan.
The Jaguar pulls to a halt, and Sung continues to puff slowly as his right-hand man, Lao Liu, steps into the middle of the road to direct the dozen motorcades – including Honda Acuras, Nissan Infinitis, BMWs, Mercedes-Benzs – trailing behind.
The real estate division of Sung’s eclectic electronics, resort development and crematoriums company, Long De Group, is heading to a sprawling resort in the mountains surrounding the city for a business meeting with the mayor of Dujiangyan.
New wealth
Sung, along with his team of executives, are part of China’s rising middle class – dripping with new money and dishing out cash for luxury purchases that showcase their status. This affluent group buys an average of 15,000 luxury cars per month. Thanks to them, China’s high-end auto segment is growing about twice as fast as the overall car market.
China has become the fastest-growing market for BMW, which sold 23,595 cars last year, up 52.4% year-on-year. Rolls-Royce opened its 80th China showroom this year, while the joint venture between General Motors (GM) and Shanghai Automotive Industry Corp (SAIC) sold 876,747 units last year, the most in the country. Volkswagen, which has tie-ups with First Auto Works (FAW) and SAIC, placed second.
Alongside Dongfeng Motor Company, SAIC and FAW represent China’s largest state-owned auto manufacturers. In the 1980s, when Beijing turned to foreign expertise to help rising sedan demands, these were the firms they put forward as joint venture partners. The foreign carmakers provided the capital and expertise, receiving market access in return. The domestic companies contributed labor and it was Beijing’s plan that they would both profit and learn from the joint ventures. The long-term plan has always been to create a strong, export focused domestic auto industry.
The cream of America, Europe and Japan’s auto markets have all now set up shop in China. For the homegrown brands upon which local manufacturers are supposed to impart the knowledge gained from the joint ventures, life is tough. They make up less than than a third of the market, with most of their sales coming in the low-end segment. Exports are restricted to the developing markets of South America, Africa and the Middle East.
Nevertheless, these local automakers are not giving up. Several have come up with foreign-inspired designs for high-end cars with which they hope to enter the domestic luxury market.
At last year’s Beijing Auto Show, homegrown brands accounted for one third of the 572 vehicles on display. Among them was FAW’s luxury Red Flag HQ3, priced at US$75,000. It comes equipped with a bulletproof exterior and stretch features. The Red Flag brand has a history of supplying luxury vehicles to top government officials, and FAW wants to use this cachet to appeal to the China’s affluent crowd.
But breaking into the high-end segment is likely to be a challenge.
“People buy luxury based on three factors: quality, product performance and image,” said Songlin Mei, general manager of China operations for auto consultancy JD Power & Associates. “Homegrown luxury brands have a chance, but it is going to be tough.”
Falling short
China’s automakers still lack the innovation and technology of their foreign counterparts, which suggests that they haven’t absorbed as much from their joint venture partners as they might have expected. Unsurprising, perhaps, given the secrecy that surrounds foreign intellectual property for key components.
“It is easy to set up assembly lines and copy designs, but having the technology is what is important,” Mei added.
Yet local automakers have found another way to get their hands on foreign technology – buying foreign car companies. In 2005, SAIC bought the rights to two models and one engine series from the defunct UK manufacturer Rover. Then, earlier this year, SAIC launched the 2.5 liter Roewe 750 startup luxury sedan priced from US$22,000-40,000.
Katsumi Nakamura, president and CEO of Dongfeng, said attracting first-time buyers to homegrown labels could be as simple as creating the appearance of luxury with wooden panels, leather seats and a sunroof.
Although not a first-time car consumer, it is hoped that the likes of Sung Guobao might be swayed. His Jaguar and two luxury SUVs come fitted out in wood leather, chrome and crystal. But he is also in the hunt for a new car.
“Did you hear about the auto show in Shanghai [in April]? I might have to get me one of those Cadillacs… and give my Jaguar to Zhao Ziqi,” Sung said. “You know he might become the vice secretary in Aba prefecture? He will need a good car.”
(China Economic Review)
The need for speed
Porsche Offers Speed and more for owners
Chinese people are becoming ever more willing to splash out in order to flaunt their status
After buying a home, the next goal for ordinary Chinese is a car. For the elite, the villa is followed by an exotic sports car, with perhaps even a diamond necklace draped on the steering wheel. When it comes to conspicuous consumption for China’s nouveaux riches, there are few limits.
Discreet dealers won’t divulge the names of their well-heeled customers. But these people all know each other – they are members of the same clubs and gather on the race track.
Han Qimeng, a partner at a prominent international law firm in Shanghai, is one such owner. He caught the sports car bug just over a year ago after a long period as an SUV driver.
“I bought the first Porsche 911 GT3 in China last year,” he said. “Now, three or four people in the country have one.”
Han’s vehicle is a souped-up high-performance coupe, complete with a Formula One level engine and all the works.
Target market
Top global brands like Ferrari, Maserati, Jaguar and Porsche see huge market potential and fast-growing consumer power in China, so they’re revving up to race for the wallets of country’s richest people.
Porsche has plans to double the number of its sales centers, while Korea’s Hyundai has a more down-market sports coupe which is said to be a top-selling sports car in China in terms of volume. Even the brand-new BMW Z4 convertible (Z4 Roadster) has been released on the mainland.
There are three categories of sports cars, according to an executive with Chinese car manufacturer and importer Geely Automobile:
1. Expensive premium sports cars. Superior speed and performance cars like Porsche and Ferrari reach into the millions. Obviously, few can afford them.
2. Mid- to high-end models. These vehicles, selling for between US$80,000 and US$190,000, provide speed, comfort and status. Examples include the Mercedes-Benz SEL and the BMW Z series.
3. Mid- to low-end sports cars. Examples include the Hyundai Coupe and the Geely Mybo, priced from US$12,987 to US$25,974. These domestic brands are expected to retain their stranglehold on the low-end sports car market for quite some time.
Geely Automobile boss Li Shufu, who is 54th on one list of China’s richest people, initiated the fervor for domestic sports when he created the country’s first independent domestic auto brands. Suddenly snazzy looking vehicles, led by the Mybo, came with an affordable price tag. Rival domestic carmakers Chery, Lifan, BYD and Brilliance have since followed suit.
Speeding in style
Like many other upwardly mobile Chinese, Han got his first taste for fast cars at the Shanghai Formula One Grand Prix, held for the fifth time last fall. Now, he satisfies his need for speed with fellow members of Shanghai’s Porsche Club. This is an informal and remarkably unpretentious society that targets not only Porsche owners and aspiring buyers, but also people who are simply wild about sleek German sports cars (33 of the 77 people who attended the first meeting were non-owners).
The club, established by a group of friends last September, and blessed by Porsche itself, charges no dues – at least, not yet. There are over 500 Porsche clubs worldwide in some 50 countries, and the number of regional clubs around China is set to expand, according to Mark Bishop, Porsche’s Greater China managing director. Activities have ranged from laps around Shanghai’s Formula One racetrack to soccer matches.
Han’s favorite recent event was a weekend excursion with nine fellow owners to Yongzhou, 240 kilometers away. Driving on sparkling new highway, he made the trip in an hour and change – at one point reaching 240 kilometers per hour – but some fellow travelers weren’t so lucky.
“Two people driving Cayennes (Porsche’s sport utility model) were stopped for speeding,” said Han. “They were doing 200 kilometers an hour.”
(China Economic Review)
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