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| Daimler, Porsche CEOs head to Shanghai as China sales near US |
| Bloomberg / Tokyo Apr 20, 2009, 01:07 IST |
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Daimler AG will skip this year’s Tokyo Motor Show, Nissan Motor Co passed on Frankfurt, Europe’s largest car extravaganza and Porsche SE will bypass Detroit. All will be in Shanghai.
Porsche SE Chief Executive Officer Wendelin Wiedeking will unveil the new Panamera sports sedan in Shanghai. Daimler’s Dieter Zetsche, Volkswagen AG’s Martin Winterkorn and Toyota Motor Corp’s Katsuaki Watanabe will also be there.
“The hope for every automaker in the world is riding on China,” said Ricon Xia, an analyst at Daiwa Institute of Research (HK) Ltd in Shanghai. “No matter how many difficulties they are facing, they have to be here and the Shanghai Auto Show will be the show for the year.”
A record number of automakers will attend the Shanghai Motor Show, which starts on Monday, as China threatens to usurp the US as the world’s biggest auto market. General Motor Corp’s China sales surged to a record last month, at the same time its US sales plunged 45 per cent.
More than 1,500 companies will attend the show, the most since it started in 1985, said Wang Xia, an official with the organiser. More than 600,000 people are expected to attend the nine-day event at the Shanghai New International EXPO Centre, he said.
“We don’t have enough space and there are people still asking for more,” said Lawrence Lu, executive vice president of Shanghai International Exhibition Co. “A lot of foreign exhibitors can see the potential here.”
China’s vehicle sales have surged an average 20 per cent a year in the past decade, making it the biggest market for GM and Volkswagen after their home countries. Still, vehicle ownership per person is one-third the world average and about the level of the US in 1925 and Japan in 1965.
Passenger car sales jumped 10 per cent in March to a record 772,400 after the government cut retail taxes and gave subsidies to help rural residents buy vehicles. The growth compares with a 37 per cent plunge in the US and a 32 per cent decline in Japan.
Total auto sales in China may rise to more than 10 million this year, according to the government’s plan to help stimulate vehicle demand. In contrast, CSM Worldwide Inc. slashed its US auto sales forecast for this year to 9.7 million, compared with 13.2 million in 2008 and its initial 2009 forecast of 10.7 million vehicles.
GM, whose US sales plunged 49 per cent in the first quarter, doubled its 2009 forecast for China’s market growth as tax cuts and subsidies revived demand. The carmaker will show 37 production and concept models at Shanghai. The company’s CEO, Fritz Henderson, canceled plans to attend the show, due to “business requirements,” GM said in an email.
“General Motors has made a long-term commitment to China,” the automaker’s China president Kevin Wale said April 2. “Despite the challenges that GM and our industry now face, we believe our best years are ahead of us.”
With China set to overtake the US as the world’s largest auto market, Chinese carmakers are looking abroad. Geely Holding Group Co has been in talks to buy Ford Motor Co’s Volvo unit for more than a year, according to people familiar with the matter. Ford sold its luxury Jaguar and Land Rover brands to India’s Tata Motors Ltd.
In anticipation of rising sales, foreign automakers are expanding in China even as they close factories and fire workers elsewhere.
Volkswagen, which has invested a total of 6.8 billion euros ($9 billion) in China, aims to add at least four new models a year and double its number of dealers by 2018 to double sales to 2 million vehicles. The carmaker curbed German production in the first quarter and cut 16,500 temporary jobs worldwide.
GM, which plans to shutter 15 factories in the US by 2013, expects to double its sales in China to more than 2 million vehicles a year during the next five years by adding more than 30 new and upgraded models.
Toyota, which slashed global production by 50 per cent in February, still plans to open a factory in the northeastern city of Changchun with partner China FAW Group Corp, said Masahiro Kato, president of Toyota Motor (China) Investment Co.
The plant will increase the Toyota City, Japan-based automaker’s production capacity in China by 11 per cent to 1 million vehicles a year.
The company also plans to boost the number of dealerships selling luxury Lexus vehicles in China by a third this year to about 60, said Godfrey Tsang, vice-president of Toyota China.
Toyota, together with its partners, will have its biggest ever display at any Chinese auto show with 50 models, the company said in a statement.
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