BEIJING (AdAge.com) -- Global car companies are enjoying huge growth in China, but the excitement reached feverish levels last week as automakers from across the country and around the globe converged on the capital for one of the world's biggest car shows and the largest to date in China.
China's passenger car sales jumped 45% to 10.3 million units in 2009, and rose 76% in the first quarter of 2010. Most analysts expect double-digit growth to continue for the next several years -- or even decades. After all, car ownership is still relatively low in China, where fewer than 50 people per 1,000 own a vehicle, compared with roughly 800 cars per 1,000 Americans and more than 500 cars per 1,000 inhabitants in Germany.
The Chinese market is dominated by Volkswagen and General Motors Corp., with 16.6% and 13.4% market share, respectively, last year, but privately owned Chinese car makers are growing fast, too.After sweet-talking guards at the front gate and staff at the registration desk, I received a pass to visit the 2010 Beijing International Automotive Exhibition (also known as Auto China 2010) on press day April 23 -- or as much of it as I could handle in one afternoon. Nearly 2,100 companies from 16 countries were displaying almost 1,000 cars between April 25 and May 2 in a venue covering over 200,000 square meters -- equal to about 40 football fields.
The halls were packed with photographers, reporters, car-company executives and lots of scantily-clad young women. Auto shows in Western markets have toned down the use of models, letting cars shine, or not, on their own merits, but clearly the trend hasn't caught on in China. Fashions ranged from ball gowns to metallic dresses with platform boots to bikinis. With a handful of cartoon characters walking the corridors, the show looks like a cross between a karaoke club and a space-travel-theme amusement park.
While lacking somewhat in sophistication, the show has scale, energy and ambition befitting a country that is now the world's largest car market by unit sales. Eighty-nine models will make a global debut in Beijing this month.
About four-fifths of the new models are made by local car companies such as Shanghai Automotive (SAIC), Zhejiang Geely Holding Group, BYD, Dongfeng Motor Group, Great Wall Motor and Chery. They are emerging as serious threats to foreign car makers, particularly American and Japanese firms, just as they are looking to growth in China to offset falling sales at home.
Giant sales office
The Beijing show is also about cash. While car shows in the West are geared toward car reporters, dealers and parts suppliers, in China, they also serve as a giant sales office. The country doesn't have enough dealerships to meet the interest of Chinese looking for a new car. After conducting extensive research online, prospective buyers turn up at shows ready to buy, sometimes carrying bags of cash. The AFP reported this week that Rolls-Royce sold two models -- one costing $1.3 million -- in the first few hours of the Beijing Auto Show.
There's plenty of talk in Beijing about Geely, which just finalized a deal to buy Volvo from Ford for $1.8 billion and was one of the top exhibitors at the auto show. China's largest private car maker sold 334,000 cars last year in China, and plans to sell 2 million cars by 2015, mostly overseas. Geely put 39 models on display at the auto show, more than any other domestic car firm. But Chinese and western car experts alike are uncertain whether Geely has the experience and stamina to successfully revive Volvo on the global market.
Alongside luxury sedans, SUVs, an extra-long Rolls-Royce and the fastest-ever Ferrari road car on display, the auto show was peppered with small, energy-efficient cars as part of the overall theme for Auto China 2010, "For a Greener Tomorrow."
Nearly 100 cars on display, including electric cars and hybrids, touted low- energy consumption, alternative fuel models and emission reductions.
These are all encouraging developments in a country choking with pollution, especially since the Beijing auto show demonstrated without question that China's thirst for cars is just getting stronger.