Automakers unveil new models at Beijing show

AP News
Posted: Apr 23, 2012 5:02 AM
Automakers unveil new models at Beijing show

Ford unveiled a three-cylinder mini-SUV and Chrysler showed a dragon-theme Jeep on Monday as automakers rolled out models designed for Chinese buyers at the Beijing auto show amid tougher competition in the world's biggest vehicle market.

Automakers are looking to China to drive revenue amid weakness in the United States and Europe. But explosive sales growth that hit 35 percent in 2010 fell to just 2 percent in the first quarter of this year.

Ford Motor Co. premiered the scaled-down EcoSport SUV, designed for "urban adventurers" with a 1-liter engine. It is due to be manufactured at Ford's factory in the southwestern city of Chongqing.

"This new SUV is specially designed for growth markets like China," said Kumai Galhotra, Ford's vice president of product development for the Asia-Pacific region.

The array of vehicles at the show designed with Chinese buyers in mind reflected this market's huge and growing importance to automakers that used to sell the same models worldwide with few local changes.

Nissan, Toyota, Audi and China's young but ambitious automakers also used Auto China 2012 to showcase luxury sedans and SUVs with China-specific features. The event, China's biggest auto show this year, opens to the public on Friday.

Chrysler Group LLC announced it will sell a dragon-themed Jeep, with gold-toned accents and dragon designs on headrests and elsewhere.

"To be successful in China, we must tailor or vehicles to the specific tastes of Chinese customers," said Mike Manley, Chrysler's chief operating officer for Asia.

Automakers are targeting both ends of the market, rolling out luxury models for newly rich urban Chinese and economy models for the low-income but vast rural population.

Japan's Infiniti showed a new luxury sedan with a bigger back seat for Chinese businesspeople. Italy's Fiat SpA, trying to rebuild its presence in China after withdrawing in the 1990s, showed the new Viaggio sedan, designed with its local partner Guangdong Automobile Co. to appeal to Chinese buyers. The four-door sedan, with a 1.4-liter engine, goes into production in June at a factory in the southern city of Changsha.

"The products that we are building today globally have a lot more attention paid to what the customer needs in China," said Kevin Wale, president of General Motors Co.'s China unit, in an interview ahead of the show.

Chinese auto sales growth plunged last year after the government tightened lending and investment curbs to cool an overheated economy and inflation.

Total auto sales rose just 2 percent in the first quarter of this year over a year earlier to 1.2 million vehicles, according to LMC Automotive, a research firm.

Global automakers kept their own sales growing faster than the market in 2011 by taking share from Chinese rivals such as Chery Automobile Co. and Geely Holding Group, though industry analysts and companies say that trend is unlikely to last.

Sales by Volkswagen AG and its Chinese partners rose 12 percent in the first quarter, while Chery's fell 22 percent, according to LMC Automotive.

"I don't think that's a long-term trend," said Wale. Pointing to the experience of Japan and Korea, he said, "you should never underestimate the ability of a major industrial market to generate globally competitive car companies."

China's independent automakers, aiming to move up to higher-priced market segments, showcased luxury sedans and SUVs with more powerful engines, navigation systems and other features to appeal to more prosperous buyers.

New brands created by global automakers and local partners under pressure from Beijing to establish more indigenous Chinese brands showed some of their first low-priced vehicles aimed at lower-income areas of China.

Chery, the country's top indigenous brand, premiered one of its biggest sedans yet, the Qiyun 5, with a 1.8-liter engine, which it says will be priced at 76,000-100,000 yuan ($12,000-$16,000).

BYD Co., China's second-largest domestic car brand, showed off an updated e6 electric sedan that it says can travel 190 miles (300 kilometers) on a charge and other models with more powerful engines. The company is 10 percent-owned by American investor Warren Buffett's Berkshire Hathaway Corp.

"In the short term, competition will be more fierce, especially when international brands are launching low-cost vehicles," said Henry Li, general manager of BYD's export division.

"We try to create our own competitive edge to cope ... We are not only staying in a low segment but are creating new technologies and improving quality," Li said in an interview. "That's the way we have to respond."


Associated Press writer Didi Tang contributed.