A model poses in front of a car produced by Shanghai GM at an auto show in Shanghai. Am Xin / China Daily
The number of car models in China’s showrooms quadrupled in the past six years, forcing companies to fight for attention by unveiling vehicles at the Imperial Ancestral Temple in Beijing and the Great Wall outside the capital – and by paying Olympic gold medalist Michael Phelps millions of dollars.
“It is clear that brands are still in the forming process,” said Joerg Mull, chief financial officer for Volkswagen AG’s China unit. “One of the keys for success in China in the long run is brand building and brand establishment.”
About 83 percent of Chinese buyers last year purchased their first vehicle, said the State Information Center, a research arm of the government’s National Development and Reform Commission.
At stake for China’s more than 130 carmakers is winning loyal customers in world’s largest automobile market.
Sales in the country surged 46 percent to 13.6 million last year, according to the China Association of Automobile Manufacturers. In the US, sales slumped 21 percent to 10.4 million, the fewest since 1982, according to Autodata Corp.
This year, sales in China may rise more than 10 percent to about 15 million vehicles, Chang Xiaocun, head of the Ministry of Commerce’s market construction department, said. Customers choose from 221 models, more than double the total of 2008 and more than quadruple that of 2004, the manufacturers association said.
“You’ve got to create the right image, you’ve got to market it aggressively,” General Motors’ China President Kevin Wale said after the company and Chinese partner SAIC Motor Corp launched their Buick Excelle XT in Shanghai.
Car buyers in China tend to be younger than those in the US, Wale said, so the Internet is a key part of an automaker’s marketing strategy. The average Buick customer in China is 28, married and a college graduate. His US counterpart is 66 and doesn’t have a degree, General Motors China said.
Hyundai, Kia stocks accelerate on fallout from Toyota debacle: Shares of Hyundai Motor and its affiliate Kia Motors continue to thrive despite the recent erosion of global stock markets, fueled by strong financial performance and turmoil at rival Toyota. (Via South Korea News.)
Expert: China’s space technology close to moon landing capability: After years of development, China’s space technology is close to moon landing capability, said Fu Yiqing, space expert and consultant to the Shanghai Institute of Space Propulsion (SISP). Fu, also a senior member of American Institute of Aeronautics and Astronautics (AIAA), said this during an interview with reporters from China News Service. New generations of Chinese taikonauts are studying moon landing technology. (Via China – People’s Daily Online.)
China seizes leading hacker training website: Police in central China’s Hubei Province have seized the country’s biggest hacker training website and arrested three suspects, the local public security department said. The three, who ran the Black Hawk Safety Net, were suspected of offering online hacker tools, a crime that was newly listed in China’s Criminal Law last year. Police have also frozen more than 1.7 million yuan (250,000 U.S. dollars) in assets and confiscated nine web servers, five computers and a Honda Accord. (Via China – People’s Daily Online.)
China Unicom Opens First 3G Mobile Phone Flagship Store In Beijing: Chinese telecom operator China Unicom has announced that its first flagship store under the company’s 3G brand ‘Wo’ has been opened in Beijing. Located in the southern hall of China Unicom’s headquarters building in Financial Street, the three-floor Wo flagship store covers a total area of about 800 square meters. (Via ChinaRetailNews.com.)
JAL to keep American Airlines link: Japanese media say Japan Airlines, which filed for bankruptcy last month, has decided to keep its current tie-up with American Airlines – the Oneworld Alliance. There had been widespread reports that it might defect to SkyTeam under Delta Air Lines. The carrier feared that the switch would confuse its passengers and that it could loose its antitrust immunity from US authorities because it would dominate the trans-Pacific market. (Via RTHK On Internet – Finance News.)
Coach To Open First Mainland Flagship Store In Shanghai: The American luxury accessories designer and maker Coach has announced plans to open its first Chinese mainland flagship store in Shanghai in April 2010. Located at the junction of Shanghai’s Huaihaizhong road and Songshan road, this new flagship store covers an area of 650 square meters and was designed by Coach’s construction and design team. (Via ChinaRetailNews.com.)
7 For All Mankind To Open Four New Locations In China: 7FAM will open four new stores in China this year, in Beijing, Shanghai and two other as yet undetermined cities. Denim is big business in China, and has been since the early 1980s when the first waves of post-Mao fashions swept through Chinese cities. In more recent times, premium denim makers from around the world have seen demand soar in top- (and now second-) tier cities, and brands like Miss Sixty (Italy), ONLY (Denmark), Diesel (Italy) and G-Star (Holland) have opened retail outlets and in-store boutiques throughout the country. In 2007, American premium denim maker 7 For All Mankind entered the mainland market, and since then has established locations in Beijing, Shanghai, Wuhan, Dalian, Hangzhou and Chengdu. This week, in an interview with China Daily, Vice President of VF Asia (the Asian office of American apparel monolith VF Corp, which owns 7 For All Mankind) Raffaele Germano said the company plans to open four new retail locations in China over the course of 2010, with one store each slated for Beijing and Shanghai, with the other two locations to be determined. (Via Jing Daily.)
Sony to shadow Apple store strategy in Japan: Sony this week outlined a plan to fight back against Apple by opening its own flagship retail stores. Starting with Sony Store Nagoya, the stores will imitate the multi-floor design of Apple flagships like Ginza and use large, spacious display areas divided by category. The first floor of the Nagoya store will focus on portable devices like Cyber-shot and Handycam cameras, the PSP, Sony-Ericsson phones, Walkman players and VAIO PCs; a second floor will focus on home theater equipment such as Blu-ray players and TVs. (electronista.com) (Via News On Japan.)
Toyota to suspends sales, production of 8 models with accelerator issues: In what was described as the largest such move ever by an automaker in the United States, Toyota said Tuesday that it had halted sales of eight models of its cars and trucks that account for more than half its U.S. sales until it could find a fix for sticking accelerator pedals under a safety recall. The move, which will cut production starting Monday for at least a week at seven Toyota plants in North America, comes six days after the Japanese automaker announced the recall of 2.3 million vehicles due to the accelerator problem that it first encountered in 2007. (mercurynews.com) (Via News On Japan.)
Proposal to ban dog, cat eating sparks debate over China’s culture: Researchers of a Chinese government think-tank have defended their proposals to ban the eating of dogs and cats in the face of criticism that it would destroy local traditions. A proposed anti-animal abuse regulation suggests a prohibition on cooking dogs and cats with the risk of a 5,000-yuan (732 U.S. dollars) fine or even imprisonment. (Via China – People’s Daily Online.)
A JR Tokai Maglev train
JR Tokai targets 7 U.S. areas to promote bullet, maglev train systems: Central Japan Railway Co. said Monday it has selected seven U.S. areas in which it will concentrate its marketing efforts for its ‘’shinkansen” bullet train and maglev train systems. For shinkansen systems, the Japanese railway operator, known as JR Tokai, said it has picked four areas spearheaded by a possible route linking Tampa, Orlando and Miami in Florida. (Via Kyodo News (Business).)
Bain to buy Japan Domino’s operator Higa: Bain Capital LLC said it will buy Higa Industries Co., which operates Domino’s Pizza stores in Japan. The Boston-based private equity firm will buy the company from Duskin Co., Daiwa SMBC Capital Co. and founder Ernest Higa. The transaction will take place Feb. 1, Bain said in a statement Monday without providing a purchase price. (Via The Japan Times: News & Business.)
UPS plans new Shenzhen air hub: A planned air hub for logistics giant UPS in Shenzhen is expected to intensify competition in international express service among the big players in China. Sources from Shenzhen Airport (Group) Co Ltd said the hub is expected to be operational February 9, and will see 14 round-trip cargo flights between nine countries and regions in its first stage, the National Business Daily reported Saturday. (Via Business – People’s Daily Online.)
China Automotive Systems To Supply Chrysler North America: Wuhan-based China Automotive Systems, a power steering components and systems supplier in China, has announced that its first global OEM customer is the Chrysler Group LLC, which is headquartered in North America. In November 2008, CAAS received its first order from Chrysler to export power steering gears to Chrysler’s North America assembly facility. (Via China Sourcing News.)
Hundreds queue for Dodgers tickets: (ChinaPost.com.tw) – Hundreds of loyal fans queued up yesterday in Taipei and Kaohsiung to purchase the tickets to the exhibition games between the LA Dodgers and Taiwan’s baseball league following the Major League team’s official announcement on Jan. 23. (Via China Post Online – Taiwan , News.)
The four door Aston Martin Rapide.
The store, located at 66 Jinbao Street, Chaoyang District, is more than twice as big as Beijing’s other two Aston Martin stores and is the largest in Asia Pacific. The 500 sq m showroom will display seven of the luxury vehicles each costing roughly 1.3 million yuan ($190,500).
“(Beijing) is a representation of the history of China, of the life in China, and this is why we are here,” CEO of Aston Martin, Ulrich Bez told METRO yesterday.
Despite the economic recession’s impact on luxury good sales, Bez said Aston Martin continues to expand worldwide and the Asia market is one of the fastest growing.
“Whatever the situation is in the economy if you have a great product, you will be successful and if you have a bad product you will suffer,” he said.
The decision to open the new store was heavily influenced by the upcoming Spring Festival celebrations, said Matthew Bennett, regional director for Aston Martin Asia-Pacific. – read more at ChinaDaily.com…
Office Buildings near the Singapore River (photo: Randal Rayborn)
Singapore gains advantage from surplus office demand in Hong Kong: A 20 to 25 per cent fall in Grade A office rents in Singapore this year will emerge as a reason for widening the gap between rents in Singapore and in Hong Kong, and will give Singapore a competitive advantage with firms looking to expand in Asia, property firm Savills said yesterday. Rents are speculated to fall to $5 per square foot (psf) per month in 2011, accounting to a massive new supply comes on-stream, the firm’s research shows. Grade A office rents stood at $8.80 psf per month at the end of 2009, reported Savills. (Via TopNews Singapore.)
Hainan to halt land development approval on speculation concerns: China’s southern island province of Hainan will suspend land leasing and development approval in a move to curb property speculation, the province’s Party chief has said. Following a tourism promotion policy document issued by the central government earlier this month, real estate developers have flocked into the island, causing new property bubble concerns, Wei Liucheng, secretary of the Communist Party of China Hainan provincial committee, said at a meeting in Haikou Friday. (Via Business – People’s Daily Online.)
Taipei direct flights to Shanghai may begin: (ChinaPost.com.tw) – Direct flights between the Taipei Songshan Airport and the Shanghai Hongqiao Airport are likely to be launched before World Expo 2010 Shanghai opens on May 1, as Deputy Shanghai Mayor Tang Dengjie said Friday that both sides have completed various technical preparations and are working hard to kick off direct flights as early as possible. (Via Taiwan Headlines – Business.)
Tensions bubble over gas project: Japan warned China on Sunday that it would take action if Beijing starts gas production in a disputed field in the East China Sea, Japan’s Kyodo news agency reported. Although the two countries reached a broad agreement in 2008 on principles intended to solve the dispute by jointly developing gas fields, progress has been slow and Japan has accused China of drilling for gas in violation of the agreement. (Via RTHK On Internet – Finance News.)
Mazda eyes dissolving joint car production with Ford in China: Mazda Motor Corp. is considering dissolving its partnership with Ford Motor Co. for the joint production of cars in China to increase its flexibility in meeting growing demand for Mazda-brand cars in the country, company sources said Sunday. Mazda plans to withdraw from Changan Ford Mazda Automobile Co. in Chongqing, a joint venture of Mazda, Ford and a Chinese automaker, after production of Mazda cars at the plant is transferred to another joint venture of the three automakers in Nanjing in May, the sources said. (Via Kyodo News (Business).)
A worker at an auto assembly line in Ningbo, Zhejiang province. (China Daily)
“It wasn’t like this a couple of years ago,” said Pan, 34, whose husband runs a property development company in Shandong province. “We used to buy and get a car straight away, and now you have to pre-order and wait.”
China overtook the US last year as the world’s largest automobile market with sales surging 46 percent to 13.6 million, according to the China Association of Automobile Manufacturers. Nissan, Ford Motor Co and Honda Motor Co are running their Chinese factories at full capacity, with overtime and weekend shifts, and still can’t deliver enough cars.
“Based on our current growth rate and planning assumptions, the capacity of our two facilities will not be able to accommodate the expected future demand for our products,” said Nigel Harris, general manager of Ford’s venture with Chongqing Changan Automobile Co.
About 99.7 percent of cars made in China through November last year were sold, the association said. Foreign automakers are expanding assembly lines as buyers in secondary cities beyond Beijing and Shanghai benefit from government subsidies of at least 5 billion yuan ($732.38 million), a sales tax cut and 8.9 percent economic growth.
Car sales have been fueled by demand in rural areas.
“Spending power in the medium and small cities is rising, and demand there has surpassed that in bigger cities,” said Wei Tuo, a Henan province dealer for Nissan’s joint venture with Wuhan-based Dongfeng Motor Group Co. “Cars are no longer considered a luxury item but a standard consumer product.”
Wei’s company has about 40 outlets in central China selling several brands. About 55-60 percent of sales come from middle- and small-sized cities.
Nissan is the No 1 Japanese automaker in China, with last year’s sales rising 39 percent to 756,000, outselling Toyota Motor Corp and Honda, according to the three companies. Nissan’s top seller is the Teana. – read more at ChinaDaily.com…
Beijing airport getting mostly back to normal following snow: Beijing Capital International Airport reported 231 delayed and 40 canceled outbound flights as of 2 p.m. Tuesday after record heavy snow paralyzed the airport earlier in the week. Services were mostly back to normal with the three runways all open Tuesday thanks to more than 300 workers who worked for 60 hours to clear the snow and ice, said a spokesman for the airport management department. The airport authorities attributed the disruption mainly to bad weather in airports outside Beijing… (Via Business – People’s Daily Online.)
China Becomes Top Exporter: China took over the mantle of the world’s top merchandise exporter from Germany in 2009, aided by a global economic crisis that has taken a greater toll on other trading powers. (Via WSJ.com: What’s News Asia.)
Taiwan’s Xiabu Xiabu Opens 100th Restaurant On The Mainland: Xiabu Xiabu, a Taiwan-invested hotpot restaurant chain, has opened its 100th restaurant in Daxing, Beijing. Following registration in Beijing in 1998, Xiabu Xiabu opened its first restaurant in Beijing’s Xidan in March 1999. As the first bar-style small hot pot restaurant in Beijing, the company has developed steadily during the last ten years. (Via ChinaRetailNews.com.)
U.S. eclipsed by China in 2009 auto sales: New car sales in the United States plunged more than 20 percent in 2009 to a 27-year low of 10.43 million units, less than the 12.23 million units sold in China during January-November, making the country the world’s largest car market for the first time, data released by a U.S. research firm showed Tuesday. The result marked a historic turning point in the world automobile industry, which had been led by the Big Three Detroit companies since Ford Motor Co. began mass production in 1913 introducing the world’s first belt conveyor system. (Via Kyodo News (Business).)
Singapore PM: No return to pre-crisis growth: Singapore’s Prime Minister Lee Hsien Loong said that the city-state requires a long time to achieve the pre-crisis growth levels of 7 to 10 per cent as the recent economic slowdown has adversely impacted almost all key economic parameters. PM Lee, addressing a bursary award ceremony at Townsville Primary School, said that economy has been, however, showing the signs of resilience as demand in all spheres is slowly picking up due to stimulus measures taken by the government. (Via TopNews Singapore.)
The S-Class has found its biggest fans in China, where 12,500 units of the model were sold in the first 11 months of this year, the most of any market in the world.
Joachim Schmidt, executive vice-president of Mercedes-Benz Cars for sales and marketing, told China Daily last week that China would then soon supplant the United States for the No 2 spot.
“I personally believe that China will surpass the United States within two or three years,” Schmidt said.
China now is the luxury carmaker’s fourth-biggest market after Germany, the US and UK.
He said Mercedes-Benz expects to sell around 100,000 cars on the Chinese mainland next year.
Klaus Maier, president and CEO of Mercedes-Benz China Ltd, said recently that the company’s mainland sales would reach 65,000 cars this year, up 65 percent from 2008.
Mercedes-Benz’s sales on the mainland surged 68 percent in the first 11 months to 59,200 units, including 12,500 units of the S-Class, 6,400 new-generation E-Class cars, 14,500 locally produced C-Class vehicles and 14,000 SUVs.
Strong S-Class sales have made China the world’s biggest market for the model.
In November alone, Mercedes-Benz’s mainland sales hit an all-time monthly record of 8,500 cars, rocketing 224 percent from a year ago.
“The luxury car market in China will continue dynamic growth for a few years thanks to the country’s steady economic growth,” Schmidt said.
He said Mercedes-Benz plans to launch 16 all-new car models in the next two years globally, most of which will be introduced into the Chinese market to meet growing demand. – read more at China Daily.com…
The Mercedes-Benz GLK made its world debut in Beijing
The capacity of Beijing Benz-DaimlerChrysler Automotive Co Ltd (BBDC), a joint venture between Beijing Automotive Industry Holding Co Ltd, Daimler AG and Daimler North East Asia Ltd, would be raised to 75,000 to 100,000 units per year, depending on shift patterns. As part of this the company would convert the former Chrysler hall into Mercedes spaces for C- and E-Class expansion, said Ulrich Walker, chairman and CEO of Daimler Northeast Asia.
“BBDC is performing exceptionally well and will hike production of C-Class and the locally produced long-wheel base E-Class vehicles. Looking forward, in the mid-term, Daimler and its partners would produce as many vehicles as we import,” said Walker.
Sales of the locally produced C-Class have exceeded expectations, and clocked a year-on-year growth of 189 percent during the first 11 months. The company has delivered nearly 14,500 units of these vehicles to Chinese customers.
According to Walker, BBDC has increased the localization rate of Mercedes cars to 45 to 50 percent and identified 85 new China-based suppliers and worked with them to support the local production.
Walker estimated that Daimler will sell more than 70,000 cars, vans and trucks in China this year, more than a 50 percent increase over last year, strongly boosted by the record sales of Mercedes cars. He expects Mercedes sales to surpass 65,000 units for the whole year, representing a 65 percent growth rate. – read more at ChinaDaily.com…
