Foreign, domestic players reach fever pitch in world's biggest vehicle market to attract customers

Although growth in the world's top vehicle market has slowed sharply this year, foreign and domestic carmakers remain at full steam to attract increasingly sophisticated customers in China.

They are offering car buffs a motoring extravaganza of 1,100 models during the 14th Shanghai International Automobile Industry Exhibition, which opened on April 19 and runs till April 28.

The record number of exhibits will include 75 global premieres of new models, including 19 from foreign carmakers and 56 from homegrown brands, according to organizers of the biennial show.

With the main theme of "Innovation for Tomorrow", the auto expo has a total exhibition area of 230,000 square meters, a 35 percent increase from the last event in Shanghai in 2009. Organizers say the show is expected to attract 700,000 visitors.

The gala comes amid deceleration in China's vehicle market, which is feeling the impacts from a range of factors including the expiry of government purchase incentives, tighter monetary policies, high fuel prices, controls on new car plates in Beijing and production affected by Japan's devastating earthquake in March.

In the first quarter of this year, vehicle sales in China edged up 8.08 percent year-on-year to 4.98 million units, according to data from the China Association of Automobile Manufacturers.

The growth was down from a blistering 77 percent in the corresponding period of 2010.

Yale Zhang, managing director of industry consulting firm AutoForesight (Shanghai) Co Ltd, says the drivers for the market this year are very weak.

"There is a high possibility that the passenger car market growth rate will fall to the zero to 5 percent range by the end of 2011," Zhang says.

"But a market slowdown has been expected and may be good for industry players to take a better look at themselves, their products and strategies, so that they can prepare for long-term sustainable growth."

He says such challenges have brought foreign and domestic automakers to a fevered pitch at the Shanghai auto show as they fight for long-term share in the world's No 1 auto market.

German carmaker Volkswagen Group, the biggest carmaker in China, is showing scores of models under its seven marques - Volkswagen, Audi, Skoda, SEAT, Bentley, Lamborghini and Bugatti - in an exhibit covering 8,500 square meters, a record for the Shanghai show.

Both SEAT and Bugatti are making their debuts.

Premium carmaker BMW AG has almost doubled its exhibit to 5,000 square meters compared to the 2009 Shanghai event.

BMW presents a 5 Series ActiveHybrid model in its global premiere at the Shanghai motor show. The model is expected to be produced at BMW's joint venture in China later this year.

With soaring fuel prices and worsening pollution in big cities, new-energy models - mainly purely electric-powered and petrol-electric hybrids - will be in the limelight this year, though conventional internal combustion engines will remain the mainstream of the auto industry in the coming decades.

Volkswagen displays a phalanx of new-energy models including an e-scooter, the Golf blue-e-motion, Lavida blue-e-motion and Touareg Hybrid. The group has announced it will begin commercial production of the Golf and Lavida blue-e-motion models in China from 2013 to 2014.

It expects that its combined electric vehicle sales from now until 2020 will reach 500,000 units.