Commentary on China and the 2018 Guangzhou motor show

By Greg Kable in Guangzhou.

Nineteen million. That is how many passenger cars have been sold in China in 2018, at least up to the end of October. And with the overall sales figure growing at the rate of one million or so every two weeks, it has likely already topped the twenty million mark by now. And that's even before light commercial vehicles, which also do big business here, are taken into consideration.

But who’s counting?

Despite a recent sharp downturn in sales for some of the more established Chinese car makers as trade tensions with the USA play on buyer confidence the Chinese car industry continues to evolve in leaps and bounds.

Still, it is not only the number of cars that are sold that serve to make headlines; the size and number of the factories scattered right across the country, the vast number of workers employed, the massive budgets dedicated to research and development, the inevitable plethora of new models launched , the amount of ride-sharing schemes in operation, and, in a more recent development, the long list of start-ups seeking to make it big in electric vehicle circles, the sheer dimension of it all is really is quite staggering.

SAIC (Shanghai Automotive Industry Corporation), which operates joint ventures with market leading brands Volkswagen and General Motors’s Buick division but is also parent to its own successful portfolio of brands including Roewe,  MG and Maxus had sold 5,748,533 cars up the end of October, placing it it ahead of FAW (First Automobile Works), BAIC (Beijing Automotive Industry Corporation), Dongfeng Motor Corporation, Changan Automobile, Guangzhou Automotive Group, Geely, Great Wall Motors, Chery Automobile and BYD (Build Your Dreams) in a tough fought top ten.

Backed by government incentives under the Chinese New Energy Vehicle Program, sales of electric vehicle have increased at such a rapid rate that many Chinese car makers are now rushing to introduce their own individual sub-brands concentrating purely on zero-emission vehicles to attract customers. In the past two years alone, we’ve seen the establishment of Arcfox by BAIC, ORA by Great Wall Motors, Sol by a joint venture run by and JAC (Anhui Jianghuai Automobile) and Volkswagen and Everus by Guangzhou Automotive Group and its partner Honda.

Last month, sales of battery-powered vehicles in China increased by 80 per cent over those recorded in October 2017 at 94,052. By the end of October, a total of 529,928 pure electric vehicles had been sold in 2018.

The biggest selling electric car in October was BAIC (Beijing Automotive Industry Corporation) subsidiary BJEV’s EU3, which attracted 20,648 sales. But while BAIC rules the Chinese market when it comes to electric vehicles, there any number of newly formed start-ups ready to make enter the market. Companies like Nio, Byton, SF Motors, Aiways, Weltmeister, Qianto, Xiaopeng, Dialev, Hozon and Leap Motors have all shown their intention to mix it with the big guns of the Chinese car industry.

Still, the rush into electric cars is not without its financial perils. Heavy fancied Faraday Future announced last month that it was scaling back its operations after a recent round of funding failed to materialise. This comes after the mothballing of its sister company, LeSee. Both were created by Chinese entrepreneur Jia Yueting, the former chairman of internet content provider LeTV and one of a number of Chinese nationals blacklisted by the government here for unpaid debts. Their future now? Uncertain, but likely takeover propositions.

China plays host to 26 motor shows annually. Many are regional affairs but still far larger in outright attendance numbers than most of the established motor shows in other parts of the world these days. Guangzhou, which boasts a population of 12.6 million, is the biggest annual Chinese motor show, ranking only behind those of Shanghai and Beijing, which alternate between themselves each year.

As in recent years, there was no lack of new car action at the Guangzhou motor show this year.  Ten show halls were filled - and unlike recent motor shows in Geneva and Paris, there were no glaring absentees, with every major car maker represented.

Underlining the importance of the Chinese market to established car makers, Jaguar Land Rover, which now produces selected models in China with its joint venture partner Chery, brought along its largest motor show stand. Spanning the complete length of one hall, it is described as being almost twice as large in overall floor area than the stand used in Paris last month. And it was also a similar story at Audi, Honda, Nissan, Mercedes-Benz, Volkswagen, Renault, Peugeot, Citroen, DS Automobiles and Skoda - the latter of which revealed its new Chinese-built Kodiak Coupe, a model which, for the time being at last, is reserved exclusively for Chinese car buyers, here.

Toyota, which operates a joint venture with the locally-based GAC (Guangzhou Automotive Group), also considered the 2018 Guangzhou motor show important enough to use as the international launch pad for the latest generation of its best selling model, the Corolla.

As a sign of just how far they have come, though, it was the domestic Chinese car makers that provided the real fireworks here this year. With the odd exception, Guangzhou was devoid of the shameless copycat cars that used to be a staple, and ultimate laughing stock, of earlier Chinese motor shows. Yes, there were still a few around, as the new Changan CS85, a blatant rip-off of the BMW X4 if ever there was one, proved. For the most part, however, the truly established Chinese car makers launched models with their own unique visual character, as seen by the likes of the Wey P8 GT, Baojun RS5, Haval H7 and Hongqi HS7.

And the quality of these newer models is advancing in leaps and bounds, too. A close inspection of the Geely X7 Sport reveals it to be every bit as good in terms of fit and finish than any comparably priced offering out of Europe.

Among the biggest trends evidenced in Guangzhou, this year was the advance of the long-range electric car. Armed with ever-improving battery technology, the latest generation of Chinese produced electric cars have advanced well beyond the 300km range that has been the yardstick for some time now and progressed on to 400km, 500km and, in exceptional cases, up to 600km.

Among the many announcements made here was the news that Honda had teamed up with its joint-venture partner GAC to develop the electric powered Everus VE1. Although it is exclusive to China right now, it is clear Honda is using the exercise as a learning step on the way to the launch of its very own range of new electric models.

And make no mistake, the Chinese car makers have big ambitions outside their own car market, key among them brands like GAC, Great Wall Motors and Zotye, all of which have announced an intention to enter the US market.

Geely-owned Volvo already sells its Chinese-built S90 in many global markets. Then there’s Lynk and Co, also owned by Geely, which has announced that it plans to sell its 01, 02 and 03 models in key world markets. Although developed in China, though, they will be produced for markets outside the People’s Republic in a factory in Gent, Belgium

With the exception of perhaps the Beijing motor show back in April, no other - not Detroit, not  Geneva and not Paris - had the sort of new car buzz surrounding it as did the Guangzhou motor show this year. As the Chinese car industry thrives, so does its motor shows