Global Insight Perspective | |
Significance | The fifth Guangzhou Motor Show has opened today, with a host of new models and concepts on display. |
Implications | This type of event is useful to showcase vehicles in a market that has the potential to reach almost 9.2 million light-vehicle sales in 2008. |
Outlook | Despite being smaller than the Shanghai and Beijing motor shows, this event underlines the competitive nature of the Chinese vehicle market and the increasingly large targets automakers have set themselves in the country. |
The fifth Guangzhou Motor Show has opened today, showcasing a number of new models that will make their debut on the local market over the coming year. Among these, Mazda has decided to give the sedan body-style Mazda2, known as the Demio in Japan, its world debut at the event. The car has been designed to capitalise on the growing B segment in China and customers’ demand for booted vehicles. It will be built at the recently opened Changan Ford Mazda Automobile Co. joint-venture (JV) plant in Nanjing and will enter the market during the first half of 2008. Other cars on display by the automaker include the Mazda5 multi-purpose vehicle (MPV) and imported Mazda3 five-door hatchback, which will be among a total of five vehicles to be launched by the manufacturer over the next 12 months.
Mazda affiliate Ford has also decided to show the sedan version of its Verve concept at the show. The design study, which should provide hints as to the direction of the next-generation Fiesta model, had already debuted at the Frankfurt Motor Show (Germany) in September as a three-door hatchback, but this will be the first time that this new body style has been shown. This B-segment model, which is underpinned by the same architecture as the Mazda2, has been developed as a global vehicle and will have a host of body styles that will appeal to different markets, with the final of three Verve concepts to make an entrance at the Detroit Auto Show (United States) in January 2008. The concepts have all been designed by Ford's European design team and apply the automaker’s Kinetic design philosophy on the outside, while internally the automaker has said that it has taken inspiration from the latest generation of mobile phones and uses the Human Machine Interface "HMI" technology found in its larger brother, the Mondeo.
Local automaker Guangzhou Automobile Group is also unveiling a concept car at the event, according to Automotive News Europe. The vehicle, known as the A-HEV, has been designed by Italy's Torino Design and apparently has a muscular and dynamic exterior, but is minimalist on the inside. Although not intended for production, it offers hints as to the technology that might be used in Guangzhou Automobile's future vehicles, including a hybrid powertrain and body panels that use a combination of metal and a transparent polycarbonate plastic known as Lexan.
Japanese automakers are also showing their future wares for the Chinese market in Guangzhou. Toyota has 42 vehicles on display at the motor show, including the Yaris, which will be built by JV company Guangzhou Toyota, alongside the new Vios B-segment sedan model, the latest generation of the Land Cruiser sports-utility vehicle (SUV), and the FJ Cruiser SUV that will be launched on the Chinese market in December. Nissan has on display the latest addition to its Infiniti luxury brand line-up in the country, the M35 sedan, as well as two new SUVs that will hit the market within the next year, the Qashqai and the locally produced X-Trail. Guangzhou Honda will also launch the Chinese version of the eighth-generation Accord sedan with a 3.5-litre gasoline (petrol) V6 engine aimed squarely at the Toyota Camry.
Not to be left out, South Korean automaker Hyundai is also showing off its new Avante C2-segment model, also known as the Elantra, which will be built at its second new facility in China. The vehicle will enter the market in April next year, and despite the company not having released any projected sales figures for this model, it is said to be hoping for overall sales of around 500,000 units in 2008.
Outlook and Implications
Although the Guanzhou Motor Show is smaller than either the Shanghai or Beijing events, automakers have given it a great deal of support. With Chinese light-vehicle sales expected to rise by over 1 million units during 2008 to almost 9.2 million units, such shows are seen as useful for promoting brands and models in the country and for helping automakers take a larger slice of the market. This is supported by Ford and Mazda's decision to show two potentially important models for the first time here, particularly the Verve concept, which is no doubt intended to take a larger slice of the Chinese market than the current Fiesta sedan. In addition, the show also highlights the increasing sophistication of Chinese consumers, who are demanding more niche-type models such as SUVs and multi-purpose vehicles (MPVs). In this respect, and due to the increasingly competitive nature of the Chinese car market, it will become ever more difficult for automakers to just set up shop in the country and sell a relatively large number of vehicles, as early entrants here found. This pressure has already told on Hyundai, which has had to downgrade its current-year sales targets as a result of the intense price wars and its ageing model line-up, but it is hoping to bounce back in 2008 with the new Avante and a rejuvenated Sonata. However, with Toyota also setting ambitious growth targets in the coming year (see China: 19 November 2007: Toyota Aiming for Ambitious Sales Increase in China During 2008), and General Motors (GM), Volkswagen (VW) and others looking to further their status in the market, it remains to be seen who will ultimately lose out in the ongoing battle for market share.