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The Guangzhou Motor Show 2012 has begun with over 950 models on display, showcasing a strong line-up from international automakers keen to strengthen market share in China, with many targeting the sports utility vehicle segment.
IHS Automotive perspective
International automakers Toyota, PSA, Ford, and Hyundai have all exhibited a strong line up of models at southern China's biggest auto show, aiming to battle for greater market share in the country's automotive market with special emphasis on the fast-growing sport utility vehicle (SUV) market.
SUVs are one of the consistently fast-growing segments of China's automotive market and international and local players are competing to win over Chinese consumers by launching new models at the Guangzhou show.
Guangdong is generally a stronghold for Japanese automakers whose plants are based in the region, but this year other international brands aim to steal market share from them, as recent months have seen a loss in sales by Japanese brands in China due to the ongoing territorial dispute between the two countries over the Diaoyu/Senkaku Islands.
A total of 950 models are on display at southern China's largest annual motor show, Auto Guangzhou, held this year on 22–24 November. At the show in Guangzhou city, in the southern province of Guangdong, there are strong presences from almost every automaker in the Chinese market, with Japanese brands Toyota and Nissan displaying models to entice consumers back to their showrooms after witnessing steep declines in sales over recent months due to the territorial dispute between China and Japan over the Diaoyu/Senkaku Islands in the East China Sea. The sport utility vehicle (SUV) market has seen strong competition as international players look to gain market share in a segment that continues to be immensely popular in China.
Toyota launches Venza SUV
Toyota is exhibiting a total of 34 production and concept cars at the Guangzhou show at an exhibition stand covering more than 3,000 square metres, the automaker claims. The Venza crossover SUV has been unveiled at the show and will be launched in China in 2013. Toyota is also displaying a compact sedan and hatchback called "2Qin" (pronounced "Two Chin"), which is expected to go on sale in China during the second half of 2013. Toyota is also showcasing its strength in the electric and hybrid vehicle arena with eight electric, hybrid and plug-in hybrid vehicles on display. Toyota Motor's China operations group chief officer and senior managing officer, Hiroji Onishi, said: "With a focus on hybrid cars, Toyota hopes to continue delivering many vehicles that can bring smiles to the faces of our customers in China".
Hyundai unveils Santa Fe SUV
South Korean automaker Hyundai Motor has unveiled new models at the Guangzhou show with a focus on the SUV sector. The new Santa Fe SUV exclusively targets Chinese consumers, the company says. The model is equipped with a 2.4-litre gasoline direct-injection engine or a 2.0-litre turbocharged engine option. The new Santa Fe SUV will go on sale in China next year. Hyundai is also displaying the Tucson ix SUV at the show. As with other international automakers, Hyundai is pushing environmentally friendly models, including the Sonata hybrid sedan and the Blueon electric vehicle (EV).
Mercedes shows 36 models, pushes "Year of the SUV"
German brand Mercedes-Benz is displaying 36 cars at the show, including its Mercedes-Benz, smart and AMG brands. Of the models, most are new or improved models, the company says. "This year we have brought more than 30 new and upgraded models to China," said Bjrn Hauber, executive vice-president of Mercedes-Benz (China).
The automaker is showing five new cars in total, including the all-new SL, the limited edition smart iceshine, two G-Class AMGs, and the SLS AMG 45 Year Limited China Edition, reports the China Daily. Hauber said: "You can see how important China is to Mercedes-Benz here at the Guangzhou auto show. Every year we come back with our latest products." Mercedes is also putting a focus on the SUV segment. The automaker has dubbed 2012 as the "Year of the SUV", as over 45,500 SUVs have been sold in China during the first 10 months, the company says. There are currently 224 authorised Mercedes-Benz dealer outlets in China, and the automaker plans to expand this number to more than 250 outlets covering over 100 cities by the end of the year. By 2015, the company plans to expand its network even further to cover 170 cities.
Ford shows off new Kuga SUV
Ford Motor has reinforced an intention to achieve strong sales growth in China by focusing on the lucrative and fast-growing SUV segment. Ford's expanded China portfolio includes the "all-new Ford Kuga and the all-new Ford EcoSport" SUVs, the automaker says in a news release sent to IHS Automotive. Ford is also displaying the new Fiesta at the Guangzhou show. "We are so pleased to provide these new vehicles from our global portfolio to our Chinese customers," said David Schoch, chairman and CEO, Ford of China. "The high standards in design, quality, safety, fuel economy, and technology behind these vehicles signal Ford's commitment to the new global brand promise to Go Further." The all-new Kuga and all-new EcoSport are part of Ford's plan to broaden its offerings in China with the introduction of 15 new vehicles and 20 new engines and transmissions by 2015. Ford has five manufacturing plants in China that and, together with its partners, it is building five more, the automaker says.
PSA debuts 3008 SUV
The local joint venture (JV) of French automaker Peugeot Citroën has launched the new 3008 SUV at the Guangzhou show. This is the first SUV to be built locally by the Dongfeng Peugeot Citroën (DPCA) JV and features a 1.6-litre turbocharged engine. The model has been sold as an imported model in China this year, prior to local production beginning in 2013. Peugeot's 3008 is likely to compete with the Nissan Qashqai in China.
Outlook and implications
China's vehicle sales, October 2012
October % change y/y
Ytd % change y/y
The Chinese love SUVs, which offer safety and size, two important factors for modern Chinese families. As the overall passenger vehicle market continues to see single-digit growth in China, every automaker in China is pushing for bigger market share in the SUV sector, which is seeing double-digit growth in the country.
DPCA, for example, has spent over a year localising the Peugeot 3008 SUV to make it better-suited to Chinese consumers' tastes. However, the 3008 will face stiff competition from other locally produced models fighting for share in the SUV segment. In the contest for market share in China, price will be a key factor for the 3008, which will compete against the Ford Kuga, as well as the best-selling Volkswagen Tiguan. Many international automakers are introducing local production of SUVs in China, such as GM, Ford, Jeep, Fiat, Honda, and Hyundai.
Overall, the SUV segment saw total sales of 1.6 million units in China during 2010, IHS Automotive data show. By 2015, that number is expected to jump 149%. In 2015, the SUV segment in China will command sales of over 4 million units annually, our data indicate. Latest data from the China Association of Vehicle Manufacturers (CAAM) show that the SUV segment grew over 27% y/y in October, with over 1.6 million units sold so far this year.