Global carmakers gathered in Beijing Monday to show off their vehicles as competition intensifies and growth slows in the world's biggest auto market, with the key SUV and new energy vehicle sectors the focus of attention. The biennial International Automotive Exhibition show follows the announcement that auto sales in China grew just 4.7 percent last year, down from a growth of 6.9 percent in 2014, according to data from industry group China Association of Automobile Manufacturers (CAAM). Total sales reached 24.6 million in 2015, making it a crucial market for foreign manufacturers as well as domestic brands.
"It is slowing down," Ford China chairman and CEO John Lawler told reporters. "The market is really acting more and more like a mature market rather than an emerging market. It is part of a more competitive environment."
More than 70 exhibits by automakers from around the world stretched across the vast exhibition center, with crowds gawking at displays of concept cars from Chevrolet and Faraday Future, and lining up to slip behind the wheel of a Tesla.
Perhaps the most attention-grabbing exhibit was homegrown startup Qiantu, which plans to launch its K50 concept vehicle - a carbon-fiber and aluminum-bodied luxury electric sports car - next year. German manufacturer Audi has an enviable brand position in China and has long been seen as a symbol of aspiration by consumers, but it too is feeling the pressure.
"For sure, our competitors are trying to grab market shares from us, and some are successful," said Joachim Wedler, president of Audi China. "This is business, we have to struggle and fight." Pricing was "getting tougher, this is obvious."
China's GDP growth slowed to 6.9 percent last year, the lowest for a quarter of a century, and worries over the economic outlook have roiled stock markets worldwide. But sales of sports utility vehicles (SUVs) and electric and hybrid cars have boomed, far outperforming other types of autos. SUV sales surged 52.4 percent in 2015 while shipments of electric and hybrid cars - grouped together as "new energy" - more than quadrupled, CAAM figures showed. Sales of Chinese brand SUVs - most of them much cheaper than foreign models - rose 82.8 percent year-on-year, giving them the majority of the market in the sector. Car ownership penetration remains below 30 percent of households in the world's most populous country, pointed out Hiroji Onishi, head of Toyota China.
Executives also point to high-end growth potential among the affluent, relatively youthful elite.
Daimler board member Hubertus Troska, who is responsible for Greater China, pointed out that the average Mercedes customer in the country was aged just 37.
"Premium customers in China are the youngest in the world," he said. "They're internet savvy; we really want to be at the forefront of connectivity and telematics in this country."