China eyes SUV sector

While premium brands such as Mercedes-Benz and Ferrari continue to attract wealthy buyers, and while the Shanghai Show this month was sprinkled with electric vehicles, there was a huge array of production and concept SUVs on show from around the world.

And analysts suggest the next wave of buyers, as the middle class grows, will be lookging more toward these types of vehicle in this vast market; 1340 million people living in 9.5 million square kilometres.  The new Chinese freeways and tollways are world class, head off those into the back streets and rural roads and the network is a little more rugged.

In Shanghai world debuts included Audi's compact Q3 and Honda's Acura ZDX. The Audi softroader heads this way in 2012 to join the Q5 and Q7; the BMW X6-inspired ZDX with 3.7 litre V6 is left-hand drive only, on sale in China later this year.

Many of the crossovers and SUVs on show followed the lines of the established X6 or Nissan's Dualis; some, like Jonway's A380 are Toyota RAV4 clones with Mitsubishi motors.

Among Chinese-styled machines was Peugeot's SXC concept, a high-riding, two-wheel drive sedan with SUV overtones. Elsewhere showgoers were poring over Land Rover's three and five-door Evoques, due in showrooms from late this year.

Great Wall's  Haval 6, a new SUV wagon for the Chinese market this season, stood close to the company's huge Wingle CL, an American-sized dual cab, four-wheel drive ute, due for sale there later this year but only in left-hand drive at this stage.

Hankook's marketing and sales vice-president Byeong Jin Lee says the Chinese middle class is growing and more can now afford to buy vehicles.

That will continue to fuel demand, even if growth slows from the 18-million strong market. Analysts predict the market will be 40 million by 2020, one in two cars across the world sold in China.

The Korean tyre company Hankook, an early entrant in China, now controls 20 per cent of the tyre business here and is about to build its third factory to keep up with demand from both vehicle manufacturers and consumers.

"China is now not only a world factory but also a world market," says Lee.

He says wages have risen with the Chinese government planning to lift minimum wages by 15 per cent each year for the next five years. So Lee sees more of the middle class starting to buy vehicles.

"And SUVs are becoming more popular. I think these will take a larger share of the market because China is big, it's not a country it's a continent," Lee said.

And it is natural, he says. SUVs were a huge driver of market growth last year.

"People are getting the money, starting to buy and they have more interest in SUVs than sedans. It's a big country."

Chinese maker Geely, trying for an Australian foothold in the west with a small car, had a staggering line-up of 37 models (under three brand names) on show in Shanghai.

There were sports cars, convertibles, cute city cars plus a number of SUVs and crossover vehicles such as the GX6, the square-jawed GX5.

FAW (First Automotive Works) showed of two handsome concepts _ the T012 and the X with hints of Nissan's Infiniti SUVs.

But Geely, now 13 years in the business, looking to become a 'globally competitive brand by 2015' and these days owners of Volvo, still had room for one of the show-stoppers _ the EMGrand, a hybrid limousine, sporting a Lincoln Navigator-styled grille flanked by Audi-style headlights leading back to a Rolls-Royce style profile.

More conventional debuts included General Motor's mid-sized Malibu sedan, to be sold here as a Holden and fill the gap between the smaller Cruze and the Commodore.

Also on the menu for Australia is Volkswagen's latest interpretation of the Beetle, making it's international debut in Shanghai, and the inspiring Citroen DS5.

BMW showed its M5 Concept, a thinly disguised version of the next M5 sports sedan, plus its new 6 Series coupe.

And Nissan's Tiida hatchback, debuting at the Shanghai Auto Show, heads to Australia in 2012 longer in the wheelbase (at 2700mm) for more back seat room than its predecessor.

It will be sold across 130 markets with the car on show running a 1.6 litre engine and CVT.