2004 Beijing Motor Show, Part II

Beijing Motor Show Index

 

Whose show is this, anyway?

There were plenty of news conferences at Auto China 2004’s opening media day. The challenge was finding them. That wasn’t easy at an event that has two competing organizers (or was it four? Or five?)  Some carmakers decided to skip the slots they were given and stage their events whenever they had a large enough crowd. But despite the confusion, there was plenty of news. And lots of cheesecake. There were far more 2-legged models than the 4-wheeled kind, and they were wearing a lot less than Mao suits at a show that despite the nation’s communist government, was anything but politically correct. Blaring rock music filled the ten halls of the China International Exposition Center, competing carmakers often drowning out each other’s news conferences. But the fact was, that everyone had something to say. In 2003, an estimated 70 new vehicles were introduced in China. While hard data is as difficult to find as the auto show’s organizers, it appears that a new record will be set in 2004, as manufacturers chase the world’s fastest growing car market.

Old is new for Jeep

The rule of thumb in China these days is that the nation’s demanding consumers want nothing but the newest, hottest products. Jeep seems to be the exception to that rule. DaimlerChrysler’s Chinese joint venture continues to produce a version of the old Cherokee sport-utility vehicle — though this year’s old-is-new Jeep 2500 gets an assortment of modern features, including ABS brakes, electronic brake force distribution and a rear obstacle-detection system. One rule Jeep was forced to live by has become a fact of life for automakers in China, where vehicle prices are being cut on a seemingly daily basis. “Even with the additional features, we decided to maintain the (old) price,” said Paul Alcala, head of Beijing Jeep, the oldest Western automaking venture in China.

Spreading the wealth

So far, China’s auto mania has been limited to the Pacific coast crescent that includes such cities as Shanghai and Beijing. There, annual income levels are as much as five times the national average of just US$1000. But the wealth is beginning to spread, according to Chen Qingtai, a government vice minister who oversees automotive operations in the country. And that means manufacturers are beginning to follow the money. DaimlerChrysler currently has 40 dealers, mostly along the eastern seaboard, but it’s in the midst of adding 20 more and eventually hopes to boost the numbers to as many as 200 showrooms. “You go into the smaller cities — but in China, that mean places with two million to three million people, noted Roman Fischer, CEO of DaimlerChrysler (China) Ltd.

Breathless in Beijing

Spend a few days in the Beijing boomtown and one comes to recognize the dark side of China’s rapid development. Cars and construction crews are everywhere. So

is the sulfurous haze of pollution. “Sustainability” is a word that is creeping into the vocabulary here, and not just among government bureaucrats. At an industry gala on Wednesday night, Chen Qingtai, a ranking government vice minister, said automobiles are quickly becoming one of the major sources of pollution, outpacing coal-fired power plants. He signaled that tighter regulations will likely be on the way. Recently-announced rules for the auto industry also indicated the government’s interest in boosting fuel economy to reduce dependence on foreign petroleum– the country is now the world’s second-largest importer. “Oil security has become a very important factor in national security,” said Vice Minister Qingtai. How far the government will go is unclear, but he declared “unbearable” the idea of following the U.S. automotive model, with its heavy emphasis on SUVs. That wasn’t good news for automakers, who have seen sales of utes and crossovers surge. Even so, “every one of us has a duty to act, and act with a sense of urgency,” declared Phil Murtaugh, the night’s second speaker, and General Motors’ top executive in China. “It’s imperative the environment be factored into our daily business objectives.” Murtaugh cautioned that automakers need government help to clean up their act. China’s outdated, Soviet-era refineries produce some of the world’s worst gasoline and diesel fuel, and will need to remove sulfur and other impurities that would disable modern emissions control technology.