Beijing Motor Show: “Exclusively For China”

citroen mao

by Gunnar Heinrich ::: img withdrawn Citroën advert via Jack Yan’s Blog ::: 2010 Beijing Motor Show

CAR companies are falling over themselves to cater exclusively to the Chinese consumer this year; 2010 being the first full year that the PRC counts as the world’s largest automotive market.

As an American consumer, I feel a little slighted. What have we been all these years, chopped liver?

Let’s leave the political, economic, and perhaps social ramifications of this attention shift aside, and also that little factor that we might all be at war over Taiwan, Near-East oil, or somebody’s loss of face inside 20 years, and consider that the US car market, perhaps still the world’s most lucrative in terms of real dollars and cents, has seldom in recent times been the platform for such grand débuts or special acknowledgments by foreign car makers.

Here’s an informal rundown of pre-Beijing Motor Show announcements:

  • BMW announced a solely-for-China Long-Wheelbase 5-Series
  • Mercedes said they’d début the CLS Shooting Brake Concept (at the New York Auto Show, their big announcement was the updated R-Class – joy!)
  • Ferrari’s billing it’s new 599GTO as its “fastest road car ever”
  • VW will show off its new flagship Phaeton
  • Citroën announced the Metropolis concept, designed and built in China
  • Maybach’s unveiling its fresh new face to its über-saloon at Beijing (again, why not NY?)
  • Bentley’s press release read “EXCLUSIVELY FOR CHINA” as they announced the Bentley Continental Flying Spur Speed China (say that ten times fast in Mandarin) and the Continental GT Design Series China

And so on and so forth. Yes, China is presently the great new over-heated economic frontier.

That said, let’s not forget that India and Brazil are also emerging as meaty new markets, too. And neither of these countries’ governments force foreign car companies to embed with domestic car makers.

You know, once you share trade secrets with your corporate partner, when you’re no longer a collaborative force the other party tends to remember all your best plays.

Given that Chinese corporate culture is as transparent as dragon scales and that the government’s penchant for subversive market intervention is quite real (Google), there’s a distinctly awful possibility that the auto industry’s zealous forays into the Land of Mao could backfire horribly in years to come.

Ah, well. We live to learn don’t we?

April 22, 2010

About the Author: Gunnar Heinrich is publisher of Automobiles De Luxe online and is executive producer of the Automobiles De Luxe Television series on PBS member station CPTV.

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  1. Ah, Gunnar. You forget some great big “only for the USA” gestures from the world’s car makers.

    Two of them are called Lexus and Infiniti. They’ve now spread their wings to Europe, and Lexus has even launched in Japan itself. But both of these market expansions came rather late. For a long time they were North-America-only marques. Acura, for the most part, still is.

    The Japanese have long tailored special models to the USA. The US market suited their Japanese domestic business model: make well-equipped mass-market cars on versatile platforms that can be updated easily, since consumers trade-in their cars reasonably often in both countries.

    European manufacturers, perhaps, take a slightly different view. Culturally, and as a business model.

    It’s easy to think that luxury cars sell to rich folks. But the upper reaches of the middle class, I think, are the true (volume) heartland of any premium marque.

    In China, the rich are a growing group. But so is the middle class. Unlike the USA, it’s quite a progressive middle class: curious about the rest of the world, obsessive about knowledge, and comfortable with change. They’re optimistic about the role China will play on the word stage, and the opportunities it affords. OK, the government keeps a lid on many of their intellectual curiosities, so a foreign car brand–with the stories, traditions and distinctiveness it entails–is an acceptable flirtation with a glamourous world beyond their borders.

    The middle class in the USA is much more conservative, and less curious about the outside world. It shows in their choice of cars. They tend to prefer US manufactured cars, even if they wear a badge from a foreign firm.

    Further, the very rich in China are younger than anywhere else. That means they indulge their luxury tastes in a much more adventurous way. (China is not just the world’s largest car market, but it’s now overtaken France as the world’s third largest art market.) By contrast, luxury car buyers in the USA, like all car buyers in the USA, are getting older.

    Further, big-ticket purchases in the USA often rely on wealth (or credit) generated from home equity. Needless to say, that ain’t going to be the case again for a long, long time.

    VW recently became the world’s largest car maker (in terms of units; you rightly point out that in terms of cash the story may be different). They managed to do it with a 1-2% US market share. They plan to expand aggressively in the USA, but one gets the impression that they won’t depend on the USA for their future prosperity.

    The USA is the world’s first, and greatest, car culture. Americans rely on cars for daily life, perhaps more than any other nation. It’s a pity that the world’s greatest car innovators have now become among the world’s most conservative car buyers.

    America’s largest selling passenger vehicle was, for many years, a pickup truck. Toyota, which depends on the US for its livelihood, produced special models like the Tundra to compete. Does a manufacturer like Volkswagen or PSA really want to take on that challenge?

  2. A well considered reply – thank you!

    Of course you’re correct on many fronts. Including the Japanese catering directly to us Yanks. And yes, we have had a flagging economy Stateside and much of our consumption was/is based on property supported debt.

    Much of China’s commercial base is quite rotten. Corporate governance’s often corrupt. Fuzzy math abounds.

    Western press lack real insight to the goings on and we instead rely on statements from companies which have zero accountability except to political considerations dictated by Beijing.

    I remain wary of a new reliance on China. The show in Beijing is a symptom to what amounts to another gold rush and it’s fool’s gold these companies are going to find in the long term.

    After all, Chinese industry is very adept at making great facsimiles of the real thing at a fraction of the cost. And the Chinese middle class buyer, like any price savvy consumer, is always eager for a deal.

    From the company that brought you Mercedes-Benz/BMW/VW/Buick/Alfa Romeo/Citroen/etc. in China, we proudly introduce our very own…

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