Gone are the days when buyers in China, the world’s largest car market since 2009, mostly purchased fuel-sipping compacts and subcompacts. Their shift toward larger and ever-more-numerous vehicles is not only driving up China’s oil import bill and contributing to pollution but is also fattening automakers’ profits — and manufacturers made clear over the weekend that they plan to infuse the market with large vehicles.
General Motors announced that it would introduce nine new or restyled S.U.V. models in China in the next five years, and disclosed that it would build four more factories and add 6,000 jobs to accommodate its ever-rising sales here.
A Chrysler executive said that his company would start making Jeep Cherokees in Changsha in southern China by the end of next year. And China’s domestic carmakers showed a wide range of S.U.V.’s, the heftier the better.
Sedans were also bigger than at previous Chinese auto shows. Ford promoted its Lincoln brand, which it is bringing to China. Many manufacturers gave prominence to luxury cars, a nod to the rising affluence in China of the upper middle class and the wealthy.
“Our focus is on luxury vehicles and S.U.V.’s going forward,” said Bob Socia, president of G.M. China, which has been neck-and-neck for years with Volkswagen as the Chinese market leader.
“Not long ago, both were considered niche segments,” he said. “Both are now mainstream and growing rapidly.”
S.U.V. sales jumped 49 percent in March from a year ago as new models poured into the market. Overall auto sales in China climbed 13 percent in March and are on track for almost 21 million vehicles sold this year. By comparison, the latest forecasts in the United States this year are for a little more than 15 million vehicles. Both totals include sales of pickup trucks and other light commercial vehicles.
Mr. Socia predicted that S.U.V. sales would double by 2015, to four million vehicles. But that would still leave them trailing midsize car sales, which have surged to five million cars a year.
That has made midsize cars not only the largest market segment in China, but also bigger than the entire auto market in Japan, or the combined auto markets of Germany and Britain, said Jim Farley, Ford’s executive vice president for global marketing, sales and service and of the Lincoln brand.
Having opened one assembly plant in Chongqing last year, Ford is in the process of building another assembly plant, an engine factory and a transmission factory in Chongqing, as well as assembly plants in Hangzhou and Nanchang.
Ford is predicting that the annual Chinese market will soar to 30 million cars and trucks by 2020. General Motors is forecasting 35 million by 2022.
Fuel consumption concerns in China often focus more on the sheer number of vehicles being sold than on the fuel economy of each one. But while China is a negligible market for the true behemoths that remain fairly popular in the United States, like the Chevrolet Tahoe and the Lincoln Navigator, the upward creep in vehicle size in China toward midsize cars and S.U.V.’s is complicating policy makers’ efforts to limit total oil use.
S.U.V.’s and midsize cars in China tend to be a little smaller than in the United States. The S.U.V.’s are almost entirely what the auto industry refers to as crossover utility vehicles, which are built on car platforms instead of the heavier pickup truck underbodies that Detroit relied on in the 1980s and ’90s.
Midsize cars in China tend to be what are classified as lower midsize cars in the United States, like the Ford Fusion, sold here as the Ford Mondeo. Upper midsize cars, like the Toyota Camry, are also gaining ground but are not quite so popular.
The shift toward bigger cars and S.U.V.’s, despite punitive taxes of as much as 40 percent on models with large engine displacements (more than 4 liters) is prompting concern in Beijing. Policy makers there are weighing whether to follow the example of the Obama administration and the European Union in increasing gas mileage regulations.
Stricter rules could hurt sales of the largest models, but automakers have already been preparing by offering many cars and S.U.V.’s with slightly smaller engines than are used in the United States. “The most important discussion around this area is the changing fuel-economy requirements,” Mr. Farley said.
Article source: http://www.nytimes.com/2013/04/22/automobiles/autoshow/chinese-auto-market-shifts-toward-larger-cars.html?partner=rss&emc=rss