TNS Automotive APAC managing director Guillaume Saint reviews new trends of China’s auto market after the largest annual auto exhibition closes.

EVs

EV is definitely only for international brands or JV auto makers. All brands were displaying their R&D capabilities and newest models in this area.

Some Chinese brands explore multiple technology platforms simultaneously. For example, SAIC Roewe showcased four EV platforms: plug-in hybrid (Roewe 550), hybrid (Roewe 750 hybrid), full EV (Roewe e50), and fuel cell Roewe 950 which runs on hydrogen is still under R&D.

Changan also was showcasing its Eado (逸动) sedans on both plug-in and full EV platforms. According to its "2025 Roadmap", it plans to invest 18 billion yuan in the next 10 years in full EV and plug-in hybrid platforms and will launch 34 models to achieve accumulated sales of 2 million units. Changan said there will be 27 full EV models and seven plug-in hybrids.

More importantly, I think, is the fact that Chinese brands are developing, and proudly presenting, their proprietary  new energy systems with patent protections, such as Geely's Geely Hybrid System (GHS). These are on-going works, not finished, but they are aggressively exploring and learning.

I also saw several small city full EV alternatives almost ready for market, such as Denza (腾势a JV between Daimler and BYD), Venucia E30 (启辰E30), and Zoyte's E20 (众泰E20).

This is an interesting path. Their usage will be only for daily commuting in city centres. They can't be the only family car because they are not safe enough, too small, not fast enough for high ways and not offering enough space for luggage. But still they're relatively well promoted by brands.

One big factor preventing full EVs from being accepted by mass market is that consumers are not convinced that they're reliable. To tackle this issue, BYD displayed their E6 and E5 which have been widely accepted by taxi and police fleets.

It is a smart move because if taxi and police use these models, it means they are reliable. In China, people are reassured if a brand or model is widely used by others.

During the exhibition, I had a conversation with Johnson Controls. According to their prediction, by 2025, market share of full EV will still be relatively small globally. But their research also showed that China, and the EU, will lead the way in plug-in hybrid and hybrid system adoption, while US will fall behind.

China and EU will embrace plug- hybrid and hybrid systems more enthusiastically because they will increase the usage of new energy sources through upgrading of mainstream models, while US will likely develop through Tesla model: full EV brands for a small amount of consumers in a niche market.

Chinese brands

First of all, they demonstrated lots of respects to their visitors. There are lots of efforts to present the best cars they have, or will have. The quality of the booths are positively surprising, such as Changan, BYD, Dongfeng and Haval. It is worth noticing that Haval is a Great Wall brand, but it is impossible to see any Great Wall mark on its booth. BYD and Dongfeng have lots of contents on their booths, not just pushing cars.

Secondly, Chinese brands were offering attractive designs with new models or concept cars, such as Concept R, B from Haval and BYD's Tang, Song and compact crossover model of Yuan. Chinese car design is no longer just copy and paste of foreign cars. Their interior designs are much better than before.  I also noticed that they have brand consistence across model design, tech solutions, and the way they promoted new cars. It's surprisingly good in marketing itself.

Third, Chinese brands fully embrace customers' needs through customization, such as two colours for one car in BYD's Yuan and Haval H2. Haval's H9 can have DVD, massage chair for drivers, and backseat heating. Though foreign brands have similar customization offerings at high-end cars, H9's price is just a fraction of their foreign equivalent.

Having said these, I have to say that some Chinese brands are still very bad, such as Zoyte. It seems there is a growing gap among Chinese car brands. There are now two or three leagues across domestic brands. No wonder some brands became best sellers while some were struggling.

Sedans strike back

In recent years, SUVs and MPVs are the engines driving the growth of China's auto market. Of all key new launches at Auto Shanghai 2015, more than half of them are SUVs. However, I noticed that sedan doesn't accept its fate of being killed by SUVs or MPVs.

I saw many brands launched relatively high-end new models, such as Ford's Taurus, Roewe 950, and Changan Raeton (睿骋). They have put a lot of emphasis on comfort, but at the same time also more efforts to keep a low-profile appearance, such as Ford's Taurus, to avoid show-off.

On the other hand, brands also introduced many performance cars, especially in compact and middle-size models, such as Ford Focus RS, Excelle XT, Buick Regal GS, Peugeot 308S, BYD Qin Black. The whole Mazda fleet is red. It seems the auto makers believe compact/middle-size car segment has more potential for passion, expression and speed, which, they believe, are the key elements to attract younger buyers.

Quality of booths

Several brands with stories have made a very good display, such as Mini with its customization hall, showing off all the official accessories. DS shows its luxury craftsman ship at its booth which is no less luxurious than LV or Prada flagship stores in London or Paris. Haval is, probably, the only brand that built a three-layer booth, though it had not fully maximized its advantage of offering a higher view.

Hyundai's  displays of their engines were very instructive and persuasive. They also set up many small separate rooms to let visitors try their Harman Carton audio systems to emphasize the unusual experience in their cars.

Audi's booth focused on sports and performance, probably as the luxury brand was trying to move away from its Chinese government official car proposition because everyone knows the government is cutting down car expenses and officials were not suitable to ride in luxury foreign car brands. Probably Audi was trying to lure younger customers who favour sports cars.

Interestingly, against the same backdrop of dwindling demand for luxury cars, Porsche's display carried little sports DNA - most models were in grey and it didn't show the iconic 911 model. Probably Porsche wanted to expand the range of customers so their strategy was to make the brand appearing more approachable and less show-off.