Chinese Love Affair

MANILA, Philippines - With collapsing sales and numerous economic troubles, China has successfully become the world’s largest seller of vehicles, overtaking the faltering North American market with an annual figure of 13.6 million (compared to 10 million in the US). This represents an important milestone: a shifting base of power from the Western to the Eastern part of the world. Nowadays, no car manufacturer can afford to turn a blind eye towards China’s insatiable appetite for anything with four wheels. From General Motors to Honda to Mercedes-Benz, they have all established a foothold through partnerships with Chinese firms. After all, with a billion potential customers, getting just a small fraction could mean huge returns.

The importance of China in the global automotive arena is highlighted quite well in the recently concluded Auto China (colloquially known as the Beijing Motor Show). The 2010 installment is the tenth outing since the biennial event started in 1990. Since then, pundits have labeled Auto China as one of the world’s most important auto shows along with Detroit. Frankly, mentioning Auto China on the same breath as Detroit is quite insulting – for Auto China. It’s the biggest, most crowded, most complete auto show you can go to, and it’s the ultimate showcase for anything and everything from little commuter cars to bespoke handmade luxury models. It’s an experience you will never soon forget.

Welcoming you through the gigantic lobby are eight exhibition halls with over 40 internationally known brands and countless local Chinese ones. Some are logically placed with all the luxury brands under one hall, while some are much more mixed. Typically, you’d be half expecting comparisons with Detroit or Frankfurt, but they stall immediately as you enter any hall. The first thing that greets you is the noise: apparently, the Chinese believe you can attract good business by having the loudest sound system. It can also come in handy if you’re spoiling your competitor’s program. Next is the sheer volume of people. Trying to walk through the Bugatti or Aston Martin stands is like swimming through a strong sea current of people. If they decide to stop and snap photos, you’ll end up doing the same. But if they’re not too keen on that knock-off Chinese Porsche Cayenne, then you’re out of luck.

With average incomes rising fast, premium car manufacturers are struggling to meet China’s demands. That’s why Audi, BMW and Mercedes-Benz have all launched China-only long wheelbase models of their A8, 5 Series and E-Class sedans. Even Volkswagen has decided to take a third dip into the premium segment with their Phaeton sedan – a US$ 100,000 that failed to meet expectations in the Western market. On the higher end of the buying spectrum, Aston Martin showed off the Rapide four-door, while Ferrari showcased their already sold-out 599 GTO. Meanwhile, Lamborghini and Bentley had their own limited edition Chinese models in the Lamborghini Murcielago Super Veloce and Bentley Continental GT Design Series.

As much as the Ferrari created opportunity for shutterbugs, it’s the truly affordable brands that really attracted the crowds. For brands like General Motors, China is very important as they’ve sold a million cars last year and this year, they’re expecting to do two million. This will be largely fueled by commuter cars such as the all-new Spark as well as the upcoming Aveo RS hatchback. Meanwhile, Ford has the all-new Focus as well as the Start concept car with its 1.0-liter 3-cylinder EcoBoost engine. Even the Japanese and the Koreans are getting their act together: Mazda had the Mazda8 MPV, Honda had a designed-in China concept car and Hyundai showed off the all-new Accent.

With a rapidly developing and expanding market, China is caught between two phases: providing buyers with decent mobility now whatever the styling and preparing for a “green and electric” future. The Chinese government believes that going electric will solve the country’s dependency on imported crude oil and pollution while the required electricity can be generated from coal, of which China has plenty. Because of this, the government is pouring billions on electric car development. If they’re to be believed, Chinese brands have made extensive progress in terms of range, power, top speed and charge time. And everyone had at least one electric vehicle on display, the biggest of which is a working EV bus from Foton.

The Chinese’s love affair with the automobile is reminiscent of 1960s America, arriving at blistering speed. As such, the Chinese car market is expanding, measured not just in five-point intervals, but more like in multiples of ten. As such, Chinese car manufacturers are slowly “internationalizing” their processes. Today’s Chinese cars may lack refinement because costs are tightly restrained. However, if there’s anything Auto China proves, the Chinese can build and buy anything at any price. It sounds like a Catch-22, but Chinese executives believe that once they start exporting in big numbers, quality will go up. Though that remains to be seen, you cannot deny that China is a force to be reckoned with in the long run.