MTD’s 2014 Beijing Auto Show Preview

Kia-Horki-concept-from-ShanghaiIn a few weeks, auto makers, suppliers and consumers from all over the world will travel to China’s capital city to see the latest auto technology on display at the 13th Beijing International Automobile Exhibition (“Auto China”). The first edition of Auto China was held almost twenty-five years ago in 1990, and every year since then, the annual auto exhibition has alternated between Beijing and Shanghai, two of the country’s important auto cities.

A great deal has changed in China and the global auto industry, though, since autos were first put on display in Beijing.

In 1990, all of the truck, bus and car manufacturers in China combined produced a grand total of 509,200 vehicles, most of which were medium-sized trucks produced by First Auto Works and Second Auto Works, now known as Dongfeng. In that year, only 42,400 passenger cars were sold, mostly Santana’s produced by Shanghai Volkswagen. Government officials and a few wealthy entrepreneurs were the only customers for those cars, and most auto experts believed that a real consumer market for cars would never develop in the country. After all, the thinking went, how could consumers afford to buy cars with incomes so low?

In 1990, Geely was making refrigerators in Hangzhou, and Li Shufu, the company’s founder, had not yet had the audacious thought that he could manufacture passenger cars and compete with auto giants like the Ford Motor Company. He certainly could not have imagined that one day he would buy Volvo from Ford for $1.8 billion. When the first Auto China was held in Beijing, Great Wall, China’s most successful local assembler today, did not have a vehicle on display because it only produced auto components in that year. Great Wall would not begin producing pickup trucks until a year later in 1991 and would not begin producing SUVs, its main product today, until the end of the decade. Likewise, other famous local assemblers like Chery and BYD did not exist in 1990 and would not be established until ten years later.

Globally, China’s auto market did not show up on anyone’s radar screen in 1990. Japan was the world’s leading vehicle manufacturer, producing 13.5 million vehicles, or 27.8 percent, of the 48.6 million vehicles produced globally in that year. The United States was the second-largest vehicle manufacturer, producing 9.8 million units.

What a difference twenty-five years makes! From its humble beginnings, China surpassed the U.S. in vehicle production in 2009 to claim the top spot and hasn’t looked back since. In 2013, China produced almost 22 million vehicles, 18 million of which were passenger cars and 4 million of which were trucks and buses. Millions of Chinese consumers can now afford cars—many are even two-car families—and they can choose from almost 450 different models that are produced in the country.

Globally, China’s auto market now has everyone’s attention. 82 million vehicles were produced last year — 69 percent more than in 1990—due in large part to the strong new demand from China. Of the total number of vehicles produced globally today, almost 27 percent are produced in China. Moreover, China’s auto market continues to be a growth industry. The percentage of vehicles made in China is likely to rise to at least 35 percent by 2020.

That is why Auto China has become one of the most important auto shows in the world, rivaled only by the annual shows in Frankfurt and Detroit. In 2012, the last time Auto China was held in Beijing, over 800,000 individuals visited, 78,000 from countries outside China. At Auto China 2012, 12,600 journalists, including 1,050 journalists from 500 foreign media organizations, reported on the 2,500 exhibitors from 16 different countries that displayed their products and technologies. On exhibit were 1,125 cars, including 120 world debuts, 74 concept cars and 95 new energy vehicles. Global assemblers now use Auto China, whether in Beijing or Shanghai, to introduce their new models for China as well as for the global market.

Auto China 2014 will have over 230,000 square meters of exhibition space—160,000 square meters devoted to vehicles and 70,000 square meters devoted to auto suppliers—so bring your walking shoes. Media day will be held on April 20; attendance on April 21 and 22 will be reserved for industry professionals; and the show will be open to the general public from April 23 to April 29. The auto supplier section of Auto China 2014 will be open from April 20 to April 24.

“Driving for a Better Future” is the theme of Auto China 2014, and the show will focus on innovations and new technologies in automotive development, especially in vehicle design, energy savings and environmental protection. With so many cars now on the road in China, having a car is no longer a luxury for many Chinese consumers. Addressing the energy and environmental issues caused by being an auto nation has become the top priority for the country’s auto industry.

2 Responses to “MTD’s 2014 Beijing Auto Show Preview”

  1. Sam Zacharias April 9, 2014 at 8:19 pm

    Jack, Thanks for this update on the auto industry in China. Without question, no other American knows the marketplace more than you.