In China, East bests West rivals
Wheels.ca

In China, East bests West rivals

Special to the Star

Apr 24, 2009

SHANGHAI–Pretty girls. Pounding music video presentations. Light shows and dry ice. Talk of optimistic sales growth. A heady stream of new production, hybrid, electric and concepts cars – this year's Shanghai auto show was the antithesis of the sombre scene that's been playing out on the North American auto show circuit, from Los Angeles to Detroit to Toronto.

With the collapse of new car sales in North America, Japan, Russia and Europe, this year's Shanghai auto show (which swaps every other year with Beijing) was the well-lit stage to showcase China as the only healthy large new car market in the world today. And not just for home market manufacturers.

"The Shanghai auto show has become the largest auto show for Mercedes-Benz globally, and only comparable to the Frankfurt Motor Show," said Klaus Maier, president and CEO of Mercedes-Benz (China) Ltd.

Hard to argue with Maier. Especially after the retreat of virtually every major non-Japanese automaker from Asia's former premier auto show in Tokyo, scheduled for late October.

And as my Grade 11 math teacher once told me, you can't argue with the numbers. Research firm J.D. Power has forecast an 8.2 per cent fall in global auto sales for 2009.

Now counter that with what's happening in China.

Industry analysts expect an overall 10 per cent rise for 2009. And with the help of a recently introduced scrappage program, Chinese new-car sales in March hit an all-time monthly high of 1.11 million vehicles, or about the equivalent of how many new cars were sold in Canada in all of 2008.

The significance?

After surpassing Japan as the world's second-biggest car market in only a few years, China will likely overtake the U.S. in new-car sales this year for the No. 1 spot, to a projected 11 million plus – up from only 1 million sold in 1992.

This relatively new success may be just the start of a long run of Sino-automotive global dominance.

With more than 1.3 billion Chinese getting wealthier and having better access to personal credit every year, you can see why attending an auto show in China is a celebration, not a wake.

at the same time, the race is on with Western automakers looking to crash the party and shore up weaker home markets.

In addition to GM, Toyota, Nissan, Honda, Suzuki, Mazda, Daihatsu, Mitsubishi, Fiat, Ford, Citroën-Peugeot, and Volkswagen are all trying to fight for a piece of this growing pie, hooking up with local state-owned automakers.

Ironically, China's strong economy may end up being the saving grace for struggling North American auto and parts makers.

Reports are circulating that some Chinese automakers are lying in the weeds, waiting for the price to drop on U.S. auto manufacturing and brand assets that may become available though either bankruptcy or liquidation procedures.

If that scenario unfolds, it may be the bridge the Chinese need to allow their vehicles to meet stricter Western emissions and safety regulations – about the only obstacle that's kept them out of our market so far.

If you haven't gotten the message yet, this year's Shanghai's auto show shouts that China's auto industry is anything but quaint and unthreatening to Western automakers' century old dominance of the industry.

Need more evidence of China's rapid ascension in the auto world?

Consider that during the same week of this year's exciting and vibrant auto show, Shanghai also hosted a Formula One race – two types of events North America is sorely lacking.

Toronto Star

Search Used Vehicles

ADVERTISEMENT