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Automakers Unveil New Models in Shanghai

April 20, 2015
Volkswagen, Ford and GM were among the auto manufacturers who championed new models at China's largest car show, and trumpeted the market despite a slower economy.

SHANGHAI - Global carmakers including Volkswagen, Ford and GM showed off hundreds of vehicles Monday, adamant that China remains the promised land even though sales growth has hit the brakes.

At China's premier auto show, foreign carmakers admitted that an economic slowdown in the world's second-largest economy had taken its toll, but said the market was simply too big -- and too important -- to ignore.

China's economy expanded 7.4% last year, the slowest in nearly a quarter of a century.

"It is still growing and the market is the largest market in the world," Ian Robertson, head of sales and marketing at Germany's BMW, told reporters.

Vehicle sales in China reached 23.49 million last year, well ahead of the United States, which it overtook in 2009. But annual sales growth halved to 6.9% last year from 13.9% in 2013, according to the China Association of Automobile Manufacturers (CAAM). The slowdown continued in the first three months of this year, when sales rose just 3.9%.

Among the bright spots in China is the market for SUVs, one of the country's faster-growing segments.

"By 2018, China is expected to be the biggest market in the world for SUVs," John Lawler, chairman and CEO of Ford Motor China, told a news conference.

Ford is introducing seven new vehicles in Shanghai, including two SUVs and the Taurus, intended to be its flagship sedan for the China market.

But the "premier" car segment -- which sells for $33,000 to $197,000 -- and the even more pricey luxury market have been hit by the economic slowdown, as well as a campaign lasting more than two years to crack down on corruption and government waste.

"There's an impact from a cultural standpoint about showing off your wealth in China right now," said Luca de Meo, member of the board of management for sales and marketing at Germany's Audi. "It could have an impact on the automotive business and we're seeing it already in the high-end segment. There are less government-related purchases as well."

At the show, a rumored ban on scantily-clad models appeared to be in effect, with carmakers using demurely dressed attendants and dance shows to draw attention to their stands at a sprawling new venue.

Energy Drive Still Building

Automakers, with Chinese government backing, are making a renewed push for new energy vehicles, displaying the latest fully-electric models and hybrids at the show.

Volkswagen announced plans to locally produce more than 15 new energy vehicles in China in the next four years, while GM will launch a plug-in hybrid version of its Cadillac brand CT6 sedan.

But the Chinese market for electric cars remains small, owing to perceived problems with reliability and access to charging facilities.

Electric and hybrid vehicle sales in the country reached 26,581 in the first quarter of this year, three times the same period in 2014 but still accounting for less than 1% of total sales, according to the CAAM.

"The government is very determined in terms of the drive for the industry's electrification," the president of GM China, Matt Tsien, told reporters. "How long will it take to get there? I think it all depends on factors like infrastructure and regulations."

By Bill Savadove

Copyright Agence France-Presse, 2015

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