World's automakers hustle for position in China, world's fastest-growing market

Global automakers are putting their hottest new products on display in Shanghai, counting on design, quality and technology to give them an edge against newcomer Chinese car makers in the world's fastest-growing major market.

Photo: World's automakers hustle for position in China, world's fastest-growing market

All the big global names are in China's biggest city this week for the Shanghai Auto Show, a biennial event showcasing the one-time bicycle kingdom's newfound devotion to the motor vehicle.

"This may be the most exciting automotive market on the planet," declared Eric Ridenour, Chrysler's chief operating officer, as he announced plans to launch an updated version of the Caravan minivan and the Caliber small sport utility vehicle in the China market.

It's the first time for Dodges to be sold in China since the World War II era, and Chrysler's plans reflect the new realities of global automaking. Although the Caliber will be imported from the U.S., the Caravan will be built with Southeast Motor, a car maker in Fuzhou.

Confronted with an onslaught of competition from both foreign automakers like Toyota and up-and-coming local manufacturers, General Motors Corp. is showing 41 vehicles in Shanghai, including a hydrogen fuel-cell car and a new version of the classic Buick Riviera developed by its local engineering and design joint venture.

"Our target is pretty simple: to keep growing faster than the market," said Kevin Wale, president of GM China Group. "Everyone in the world wants to be in China. We think we have all the fundamentals in place and we're going to continue to do what we think we need to do to win."

China shot past Japan to become the world's No. 2 vehicle market after the U.S. last year, with 7.2 million units sold, including trucks and buses. Passenger car purchases jumped 37 percent to 3.8 million units.

Shanghai General Motors Corp., a GM joint venture, led passenger car sales last year with 365,400 vehicles sold, while the top-selling model for the year was the Jetta, made by FAW-Volkswagen, one of Volkswagen AG's joint ventures.

Toyota's sales of its locally made Camry, launched in May, hit between 110,000 to 120,000 last year. The Japanese automaker says it expects total China sales to top 400,000 this year, up from 308,000 last year.

To reach its target of boosting its market share to 10 percent by 2010 from the current 4 percent, Toyota Motor Corp. announced it plans to introduce the Yaris compact car by mid-2008.

"Given China's strong economic growth and auto market expansion in China, we expect a substantial growth in our sales here," said Yoshimi Inaba, executive vice president for Toyota Motor Corp.

Meanwhile, China's biggest domestic automaker, Chery Automobile Co., said Friday it expects its foreign sales to rise by 40 percent this year to 70,000 vehicles as the company tries to establish itself in the global car market.

Chery, based in the eastern Chinese city of Wuhu, is the biggest of a group of up-and-coming Chinese automakers that are trying to expand into export markets. Others include Geely Automobile Group Ltd. and Shanghai Automotive Industries Ltd.

Chery Chairman Yin Tongyao unveiled two new sedans meant for export and other vehicles at a ceremony ahead of the Shanghai Auto Show, which opens Sunday. Yin said the U.S. market was "attractive" but did not say when Chery might try to start selling there.

China's automakers exported some 325,000 vehicles last year, about 80 percent of them low-priced trucks and buses bound for developing markets in Asia, Africa and Latin America.

Most global car makers say that for now that they intend to focus on winning market share inside China, rather than using the country as an export base.

"We don't need to export (from China) because we have production all around the world," said Wale of GM China. "When you look at the basic economics, it's obvious where the big prize is. It's the domestic market."