China rides crest of its car boom wave

China’s emerging car industry unveiled a collection of new vehicles today at Shanghai’s car show, from electric run-arounds to luxury saloons.

There was scant hint of the gloom prevailing elsewhere: the show opened with the usual armies of models clad in glittering evening gowns or skimpy skirts, rock bands and other distractions.

Overall, the mood among China’s homegrown car makers seemed jubilant: sales hit a monthly high of 1.1 million in March despite double-digit declines in most other markets.

“I have only three words: excited, excited, excited!” Zhang Xiaoyu, chairman of the Association of China Auto Engineering, said.

“After only 18 years of development, we may become the world’s leading car market,” he said.

From battery-making upstart BYD Auto to sports and luxury car makers like Porsche, car makers everywhere are zeroing in on China, the world’s second largest market, as they struggle through hard times elsewhere.

China’s domestic manufacturers are nowhere close to meeting US, European and Japanese standards in most respects.

But they are working hard enough and expanding fast enough to have industry leaders looking over their shoulders.

After attempts to export to European markets failed several years ago, home-grown manufacturers Geely returned to the drawing board, improving designs, engines, transmissions and platform.

Both domestic and foreign manufacturers have been expanding their product offerings to span the spectrum from lower-end small cars to the raciest, plushest luxury models: only with a full range do they expect to thrive in this hyper-competitive market.

Chinese firms, still unable to successfully challenge their foreign rivals in affluent Western and Japanese markets, are striving to improve quality, while also going after the small-car market where their home player status gives them cost and distribution advantages.

Geely brought six new models, including what it called a “large business limousine,” its first city SUV and an economy model that it says is an “international standard” small family car.

“We had a lot of difficulties. Now we are trying to overcome them,” said Geely’s chairman, Li Shufu.

“I promise that Geely is doing the best it can to transform itself,” he said.

Chery Automobile, another homegrown manufacturer, introduced its Riich and Rely new premium models – aiming to move up market after building its business mainly on sales of smaller cars such as the popular QQ minicar.

“Chery is ready to meet the challenge of the global market. We’ve succeeded in launching four brands of new cars this year,” declared Chery’s president, Yin Tongyao. “You can be sure Chery will have a bright new future.”

Porsche kicked off the show on Sunday by unveiling the Panamera, its first foray into the luxury saloon segment. It said its decision to reveal the vehicle in China signals the rising importance of the country’s market.

Like the company’s Cayenne 4X4, the new four-door Panamera will be built at Porsche’s plant in Leipzig, Germany. It will be entering the market in Europe, South America and parts of Asia in September 2009, in North America and Australia in October, and in China in early 2010.

BYD, which has attracted investment from Warren Buffet, introduced only one new model, the M6 multipurpose vehicle, but it had plenty of its latest electric and conventional fuelled cars on show, including its plug-in hybrid F3DM – the first to begin mass production anywhere.

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