Auto giants showcase abilities in Shanghai

08:38, April 20, 2011      

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World car giants unveiled plans yesterday to introduce brand-new models and rev up investment in China, as the auto show in Shanghai kicked off with all eyes on the largest and still-rising auto market.

China became the biggest car market in 2009, when other regions were reeling from the worst economic downturn in decades. The country's passenger car vehicle market ended in 2010 with an amazing 33 percent sales jump to more than 18 units, thanks to a rising population of the increasingly affluent families.

Beijing's stimulus package, including tax cuts on small-displacement cars, subsidies for trade-ins and handouts to farmers, and unbridled motoring passion among Chinese people has created a car-owning boom.

Global premier displays at the Shanghai show include Volkswagen's new retro-styled Beetle, General Motor's new Chevrolet Malibu, Buick Envision, and France's PSA Group introducing its Citroen DS5. And, U.S. auto giant Ford Motor Company announced plans to introduce 15 new vehicles to China by 2015.

Jaguar Land Rover is in talks with potential Chinese partners to set up an assembly plant in China, its chief executive said. "We are still in discussions," Ralf Speth told Reuters on the sidelines of the week-long Shanghai Auto show. "It takes time and we want to do it thoroughly." Jaguar Land Rover sold about 30,000 cars in China last year.

Auto insiders have predicted that vehicle sales will grow at a slower pace of 12-15 percent this year, as Beijing has phased out its preferential policies encouraging car ownership. Seriously worried about carbon pollutants spewed by vehicles, cities like Beijing and Shanghai have introduced restrictions on car sales, and parking fees are raised by more than 150 percent in Beijing.

However, in the vast inner smaller cities and countryside, there will be continuous growth in auto sales, as Chinese see car ownership as an emblem of prosperity and personal status. It is safe to predict annual 10-20 percent sales growth in the coming 10 years, though the growth is not expected to be at the dizzying levels of previous years.

Since the previous Shanghai auto show in 2009, China has overtaken the United States as the world's top car market and the event has accordingly emerged as one of the world's biggest auto fairs.

"From an importance standpoint, when you think about where the centre of gravity is in terms of volume and commercial benefit -- it's here," Tim Lee, the Shanghai-based president for General Motors International Operations told AFP.

Automakers are also seeking to get a foot in the burgeoning green car market in China, where the government is encouraging electric-car development in a drive to reduce air pollution and conserve energy.

China's FAW Group said Tuesday it would invest $1.5 billion to develop clean energy vehicles in the next five years while Guangzhou Automobile Group said it would work with its joint-venture partner Honda Group Co to make electric cars.

By People's Daily Online
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