China caps boom year for autos with Guangzhou show

GUANGZHOU, China (AP) — China’s second major auto show for 2010 kicked off Monday in the southern city of Guangzhou, capping a year of record sales for the country’s booming auto market even as it faces the prospect of slowing growth.

Unlike its glitzier cousins in Beijing and Shanghai, which are held in alternating years and are aimed more at establishing China’s presence globally with product launches, the Guangzhou show has always been aimed at local buyers.

But car makers are still putting on a show for the tens of thousands of potential buyers expected to pour into the eighth annual Guangzhou International Automobile Exhibition, in bustling Guangdong, one of China’s most prosperous provinces. The show, known as Auto Guangzhou, runs from Monday — its media day — through to Dec. 27.

China overtook the United States in 2009 as the world’s biggest car market, with sales surging 45 percent to 13.6 million vehicles. Monthly sales this year have seen double-digit percentage growth and analysts are forecasting that for the year as a whole, sales may climb roughly 30 percent to about 17 million vehicles.

Such explosive growth may not continue in 2011 because tax cuts and other government incentives look set to end, although analysts say sales will still expand at a brisk clip.

“The growth rate will slow down but it still will have healthy momentum. We think there will be 8 to 10 percent for growth for passenger car sales next year,” said Lin Huaibin, a Shanghai-based analyst at IHS Automotive.

But many automakers at the show were optimistic that sales next year would be just as good as in 2010, brushing off the effect of the end of the incentives.

“I expect there will be a rush to buy cars before the tax goes up at the end of the year, then an adjustment period and then things go back to normal,” said Richard Baker, deputy general manager of Ford’s joint venture in China with Chang’an Automobile Group and Mazda.

Ford expects to sell 305,000 vehicles in 2010 through the joint venture, up 32 percent from a year earlier, Baker said.

For 2011, Ford expects that number to go up, but wouldn’t give a sales target. “We hope to sell a little bit more than the market in general” next year, Baker said.

For many foreign automakers, China is their best hope as they struggle with weak sales in the U.S. and other developed markets.

Marques from around the world are represented in Guangzhou, ranging from the mass market appeal of Hyundai Motor Co. and Suzuki Motor Corp. to prestige offerings from Porsche AG, Maserati and Aston Martin.

Guangzhou is a big base for Japanese carmakers such as Honda and Toyota, which both have joint ventures with Guangzhou Automobile Industry Group.

Toyota Motor Corp. and its upscale Lexus division are out in force with 45 models on display, three of them making their China debuts. Nissan Motor Co.’s 10th-generation Sunny compact made its global debut. It was one model among the 18 cars it has on show, including six from its luxury Infiniti brand.

Nissan and one of its local joint venture partners, Dongfeng Motor Group Co., hope to sell 772,000 vehicles in China next year, said Ren Yong, vice president of Dongfeng Motor as he unveiled Nissan’s new local brand, Venucia.

Local car makers, which have been itching to expand overseas, also have a presence.

Geely Holding Group, little known outside of China until it bought Sweden’s Volvo Cars from Ford Motor Co. earlier this year in a $1.5 billion deal, will have at least 13 models on display.

For its part, Volvo showed seven models including its S60 sport sedan and electric C30, which will be fleet tested in China next year.

Industry observers have been keenly interested in what changes Geely would make to Volvo.

The company now has a “clear plan from the new owners,” said Alex Klose, chief executive of sales distribution for Volvo China. And because it is now Chinese-owned, Volvo will “have much more of a focus on China than before,” he said.

Volvo expects to sell 31,000 to 32,000 cars in China in 2010 and “easily more next year,” Klose said. The car maker will focus on the luxury market which Klose said should maintain rapid growth next year.

One of this year’s hot themes has been so called “green” cars, including hybrids and electric vehicles.

General Motors Corp.’s joint venture with local partner Shanghai Automotive Industry Corp. has 23 vehicles on show, including an electric battery-powered version of the Chevrolet Sail, which was developed in China specifically with the local market in mind.

Electric vehicles are well suited to China, where most drivers live in crowded cities and typically make short trips. However, despite the hype, they haven’t yet taken off.

BYD Auto Co., in which billionaire investor Warren Buffet has a stake, is planning to sell its electric e6 sedan in overseas markets including the United States and Europe by 2012, said spokesman Paul Lin.


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