Considering China’s Electric Automotive Future at the Beijing Motor Show “Steering to a New Era”

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Considering China’s Electric Automotive Future at the Beijing Motor Show “Steering to a New Era”
Considering China’s Electric Automotive Future at the Beijing Motor Show “Steering to a New Era”

Global carmakers touted their latest electric and SUV models in Beijing last month as China promises a more level playing field in the world’s largest auto market where domestic vehicles are making major inroads.

Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford, and others displayed more than 1,000 models and dozens of concept cars at the 15th Beijing auto show with thousands of Chinese auto enthusiasts wandering the halls of the 220,000 square metres mega-exhibition centre.

The show came as China’s market hits a transition period — the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types. Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future. Nissan presented its first electric car produced for Chinese consumers, the four-door Sylphy Zero Emission, with a driving range of 338 kilometres.

“The new Sylphy zero emission is the next step in our electrification strategy for China,” said Jose Munoz, Nissan’s chief performance officer, adding that the company will unveil 20 electrified models over the next five years. Accounting for some 28.9 million car sales last year, the Chinese market could soon match those of the European Union and the United States combined. General Motors sold over four million cars in China last year, more than in the United States. Volkswagen sold more than three million, roughly six times its home market.

But domestic firms are outselling foreign firms in the SUV segment. In the electric car market, the figures are even more lopsided, as Beijing has heaped money on projects to dominate what it sees as the future. At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves — 124 of the 174 electric car models on display are homegrown. Government subsidies help consumers purchase the green cars, while policymakers are planning a quota system to force producers to build electric vehicles, with plans to one day phase out gas vehicles altogether.

Volkswagen announced investments of 15 billion euros ($18 billion) in electric and autonomous vehicles in China by 2022. “China is our second home,” recently installed chief executive Herbert Diess said at a Beijing press conference, with its market set to be “the biggest” worldwide for electric cars. Even though Diess created a stir with his announcement, the big buzz surrounded the all-electric models from Tesla, the precocious child of Elon Musk. “Believe me, executives from local and global rivals were among those checking out Tesla’s stand,” one industry insider said.

Auto executives had their minds on the boiling trade war between Beijing and Washington, with every twist and turn fanning fears that it could bring their plans for China to a screeching halt. But Beijing has announced it will liberalise foreign ownership limits in the sector, a move seen as a possible olive branch to US President Donald Trump, who has railed against China’s policies in the sector.

Foreign automakers account for more than half of vehicle sales in China, with VW saying it has “strong” local partners in their joint ventures “Hopefully, liberalisation will help fair competition, and having a level playing field,” said Jochem Heizmann, CEO of Volkswagen Group China. China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.

The Phuket News

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