May 14, 2009
By Klaus Paur, Regional Director Automotive North Asia, TNS China

The Shanghai Auto Show 2009 closed just recently, and this year’s exhibition has produced record results – largest exhibition area ever, more industry participants than previously, and highest number of visitors. An amazing performance given the current economic context, and the particular bad current shape of the global auto industry!

As always at the motorshows in Beijing or Shanghai, all attention was turned to the domestic car manufacturers, and this year’s exhibition has indeed shown us how far the Chinese domestic manufacturers have already come since they have started to engage in passenger car manufacturing. We have seen the new modern and fashionable models but also the establishment of new Chinese car brands: Chery and Geely have introduced a multi- brand strategy, and launched Riich, Rely and Kerry respectively Emgrand, Gleagle, and Shanghai Englon.

With the exhibition theme “Art of Innovation” the organizers have put the topic of environmental friendly technology into the center of this year’s auto show, and “green” was a consistent colour throughout the various concept- and product presentations. There is no doubt that the auto industry’s future lies in the ultimate synthesis of mobility and environmental sustainability, and indeed numerous car makers – international as well as Chinese domestic car manufacturers – have showcased their propositions regarding fuel efficient vehicles as well as alternative powertrains to the public.

Still, despite noteworthy displays of environmental friendly technologies and Chinese made car brands, the most astonishing presentations could be seen on the stands of luxury car makers, though, to a large degree because they could not really be expected at this point. In a period of time where the recovery of the Chinese car market is widely attributed to a growing attractiveness of small vehicles, luxury brands have contributed considerably to the lot of new model launches, such as Audi with its new Q7, BMW with its X5 and X6 M-series, Porsche with its Panamera, Ferrari with its California, just to name a few. Luxury car makers have fairly well played on Chinese consumers’ attraction to new and high performing vehicles. But above all, the display of these models undeniably shows the big confidence that these car manufacturers have into the growth potential of the Chinese market.

There is widespread agreement that all vehicle segments in China will deliver steady growth over the long term. But the investment of luxury car makers is not only pointed into the future far ahead, but built on confidence about a recovery of the market in the short term. While the reduction of the purchase tax from 10% to 5% for low displacement vehicles (1.6 liters and below) has shown positive impact for the lower-end of the car market, high-end car makers can expect that the governmental stimulus package to boost the industry will help to improve business development and stabilize the performance on the stock market, typical income sources for consumers of luxury cars.

It appears that luxury car makers are successfully betting on China, and their bold strategies at this year’s Shanghai Auto Show have already shown first fruits: Bentley, Rolls Royce, Maybach, Ferrari, Porsche, etc. have all sold their cars directly at the exhibition.