CHINA: Driving force

 

Chinese car-makers are keen to compete globally

Page last updated at 02:20 GMT, Tuesday, 27 April 2010 03:20 UK

By Michael Bristow
BBC News, Beijing

There were few private cars on China's road two decades ago.

Even in the capital Beijing, pedestrians were more likely to be knocked over by a bicycle than by someone behind the wheel of their own automobile.

But China is now the world's biggest car market, with 13.6m vehicles sold last year.

That is why this year's Beijing auto show is attracting such attention: from buyers as well as sellers.

The exhibition centre playing host to the show gives a hint of the developments in the car industry in China over recent years.

It was previously held at a cramped venue in the city centre.

It has now moved to a larger site on the outskirts of the capital: vast car parks have been marked out for the thousands of visitors.

Perhaps unwittingly, this new venue undermines the image propagated by manufacturers that cars bring the ultimate freedom to move around.

Visitors driving to the exhibition centre still have to leave their cars far away from the show, and take a bus for the final leg of the journey.

Big ambitions

There is huge interest in Chinese car makers at this exhibition because of their desire to compete with bigger, global brands across the world.

Experts say the quality of Chinese-made cars is improving rapidly

BYD, based in Guangdong province, is just one of the companies that wants to expand abroad, mainly by selling its advanced range of battery-powered cars.

Its electric E6 car, which can travel about 300km (186 miles) on one battery charge, is due to be launched in China and the United States later this year.

BYD wants to become the biggest Chinese car maker by 2015 - and the biggest in the world just 10 years after that.

It sounds like a tall order for a company that only began building cars five years ago, but spokeswoman Elva Zhai was unmoved when that was put to her.

"We should be able to do it. I believe we'll be able to completely meet these targets," said Ms Zhai, whose company's name stands for Build Your Dreams.

Across the hall, Roberto Holtheuer, a car importer from Chile, was admiring another Chinese-made vehicle, this one manufactured by Geely.

He said Chinese-made cars are getting better all the time, and believes they could one day soon compete with the likes of General Motors and Volkswagen.

"It took Japanese cars probably 25 years to reach a level where no-one doubted the quality," said Mr Holtheuer, of the firm Derco.

"Korean cars, such as Kia and Hyundai, are doing an excellent job. It probably took them 15 years. We think China is going to take 10 years."

Expensive tastes

There are many foreign car makers at the show, firms that are more interested in selling in China than anywhere else.

Luxury cars fit the fashion for extravagant purchases

China's economy has recovered from the global downturn and its car market gives them the chance of increasing sales that could prove elusive in other countries.

Rolls-Royce, the UK-based company at the luxury end of the market, says sales have jumped three-fold in the first three months of this year in China.

A jet-black Phantom - priced at 9m yuan ($1.3m: £860,000) - made especially for the Beijing show was bought even before the exhibition opened.

"The Chinese have taken to Western luxury brands in a very satisfactory fashion," said a tanned and relaxed Richard Carter, director of global communications.

"They understand the notion of luxury - and not just in motor cars: watches, yachts, aeroplanes and so on. We are doing very well here."

And it is not just the market as it is today that has foreign cars firms excited - it is also the possibility of a growing market for years to come.

Car analyst Michael Dunne said only one in 10 Chinese people currently owns a car. The figure is eight out of 10 in the US.

"That makes CEOs all over the world salivate when they think of China," said Mr Dunne.

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