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Car wars
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08:34, April 21, 2008

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Athletes from around the world will contend for gold this August during the Beijing Olympic Games, but before the sports gala begins, automakers are already locked in an intense competition of their own to see which will catch the most Chinese buyers.

It promises to be a long match, however, with no immediate winners likely in the world's second-biggest and fastest-growing vehicle market.

Global auto giants and local carmakers are in top gear to parade their products through the 2008 Beijing International Automotive Exhibition, which opened on Sunday at an all-new venue.

There are 890 vehicles on display in a total area of more than 180,000 sq m - the largest in Asia - with seven foreign models making their global premieres, 24 Asian debuts and more than 100 China maiden appearances.

The nine-day auto pageant is expected to attract more than 600,000 visitors, according to organizers of the biennial event.

Vehicle sales in China jumped by 21.4 percent year-on-year to 2.58 million units in the first quarter of this year. Full-year sales are predicted to hit 10 million units, up from 8.79 million in 2007.

US carmaker Ford Motor Co, together with its Japanese unit Mazda and other affiliate brands, is showing 55 vehicles - including six concept models and one making Asian premiere - in a combined booth of 5,500 sq m, which makes it the biggest exhibitor.

Ford is also putting its new powertrain technology, EcoBoost, on show. The turbocharged direct-injection technology provides 15 percent improvement in emissions and up to 20 percent better fuel economy, as well as improved performance.

Bob Graziano, Ford's newly appointed China CEO, says "Ford will be introducing EcoBoost-based products starting in 2009, beginning in North America and then on to other parts of the world, including China".

Ford's group China sales rocketed by 47 percent to 90,791 vehicles in the first quarter.

General Motors and its Chinese joint ventures are displaying 42 models with the Buick Invicta making its global debut.

Rick Wagoner, the group's chairman and CEO, said China may surpass the United States as the world's biggest vehicle market within a decade.

China is to account for more than 40 percent of global auto sales growth during the period, Wagoner predicted.

GM is the top player in China's vehicle market with local sales last year exceeding $1 million units.

Wagoner said GM and its joint ventures will continue to invest an average of 1 billion annually in China.

He said GM is also looking to source more parts from China for its global operations, taking advantage of the emerging high-quality and low-cost supply base in the country.

Yet he cautioned that "energy for automobiles is one of the core energy and environmental challenges facing our world todaywith a market that shows no signs of slowing, China is being impacted more than most".

On Saturday, GM opened an automotive energy research center in Beijing jointly with its partner SAIC and Tsinghua University.

Wagnoner said the goal of the center is to develop an automotive energy strategy that will drive China away from its reliance on petroleum-based fuels and toward sustainable transportation.

GM will bring three of its fuel-cell hydrogen-powered cars into China in the second half of this year for testing in this market, he said.

A third of petroleum consumed in China is used for automobiles. It is estimated that the nation will need over 250 million tons of oil for transportation by 2020.

Fredrik Arp, CEO of Swedish premium car producer Volvo Cars Corp, predicted China is expected to be among its top 10 markets in the future thanks to a strong demand in the country.

To meet with the constantly growing demand for premium cars in China, Volvo is planning local production of the S80 sedan, its flagship model. Sources from the company said a modified version of the S80 will be made in China next year. Volvo started assembling its S40 compact sedan in China in 2006.

"The already successful S40 production, together with the modified S80 in the future, means that our Chinese production base is the most important outside Europe," Arp said.

He said that after it starts local production of the S80, Volvo will evaluate if the parts and components sourced in China also can be used on the cars it produces in Europe.

German carmaker Volkswagen is displaying 31 new models at the Beijing auto show with two locally developed compact models making their global debuts.

The two models will be put into production at Volkswagen two joint ventures in China this year.

Winfried Vahland, Volkswagen's China chief, said the group aims to sell more than 1 million cars in the country this year, up from 910,491 units in 2007.

As the sole official automotive partner of the Beijing Olympic Games, Volkswagen will provide 5,000 vehicles to serve the sports event.

At the same time, Chinese carmakers are competing for limelight.

Chery, the top indigenous passenger car brand, is flaunting a record 29 new models at a record area of 2,500 sq m in a same exhibition hall with Japan's Toyota, which offers 50 vehicles.

Chery's cars on display include five powered by diesel, hybrid petrol-electricity, fuel cell and other new energy resources.

It aims to move 480,000 vehicles this year, up from 381,000 units in 2007.

Great Wall Motors, the emerging SUV and pickup producer listed in Hong Kong, is displaying 16 models in a booth of 1,800 sq m at the auto show.

Source: China Daily

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