China in the Driver’s Seat

“The Chinese don’t understand us,” Amedeo Felisa, Ferrari’s global chief executive, told me in a recent interview. “They don’t understand why we make only two-door cars. They don’t understand why we don’t make a limousine.”



If Ferrari does someday make a stretch limo, it will be because the Asian market demanded it. China, or what is being increasingly referred to as the “C-Factor” in the auto industry, is likely have a significant say from now on in how automobiles are designed, built and sold.

The fact that luxury coupe makers like Porsche, Aston Martin and even Bugatti have designed their first four-door models is directly attributable to the Chinese market. So that begs the question: Can a four-door Ferrari be far behind?

“We aren’t there yet,” Mr. Felisa told me. “But we reserved a very special car to introduce in Beijing, in the 599 GTO, to show how important China is to us.”

The 200-m.p.h. 599 GTO is the fastest Ferrari ever offered and only 599 will be built. Although a price hasn’t been announced publicly, the entire production run has already been spoken for, Mr. Felisa added; at least 20 were purchased by Chinese buyers.

Exhibit A in making a case that China could dominate the car industry was this year’s Beijing auto show. More than 1,000 cars were on display; some 65 concept cars made debuts as well as nearly 100 new or prospective alternative-fuel vehicles. That total was more than were unveiled at the most recent Detroit, New York, Chicago and Los Angeles auto shows combined. By the time Auto China reconvenes a year from now in Shanghai, the show could outstrip Geneva as the world’s most important auto salon.

“China is rapidly becoming the world’s most important automobile market,” Mr. Felisa said.

Last year, China surpassed the United States as the world’s biggest automobile market, ending more than a century of American dominance. The swap in places was sudden and dramatic: China’s sales grew by more than a third to 13.6 million units in 2009, while the United States market plunged 21 percent to 10.5 million. Sales in the United States are expected to rebound to about 12 million units in 2010, after a disastrous two-year recession that helped to bankrupt the Detroit auto giants General Motors and Chrysler. But the Chinese market is not idling, waiting for the Americans to catch back up; sales to the increasingly car-crazy Chinese are forecast to continuing growing – perhaps to as many as 20 million units yearly by 2015.

As recently as 10 years ago, total annual sales in the Chinese market was barely two million vehicles. In fact, this is only the 11th Beijing auto show, or Auto China, as it is officially known. The exhibition alternates host cities every other year with Shanghai; up until two years ago, the two China shows were more like automotive trade shows or flea markets.

Home-grown Chinese autos are expected to proliferate and grow rapidly in sophistication; many Chinese automakers have announced ambitious plans to take leadership in hybrid and electric vehicle production.

An indication of how China’s car manufacturers expect to quickly attain expertise in areas like greentech, and even safety, is underscored by Geely’s recent acquisition of Volvo and all its considerable intellectual capital from Ford. Ford, meanwhile, announced it was studying expansion of its partnership with the Chinese automaker Changan; G.M. already has in place a large-scale joint venture with China’s S.A.I.C.

But automakers outside of China have also taken note of the potential to sell their own cars in Asia. Many, particularly German automakers, like Volkswagen, Audi, Mercedes-Benz, BMW and Porsche, presented vehicles at the Beijing show that were specifically designed with Chinese tastes in mind. Notable among these were BMW’s Gran Coupe design study and a stretched-wheelbase 5-Series sedan. VW unveiled several new models here, including four electric vehicles and its newest full-sized luxury sedan, the Phaeton.

Ford introduced its Start concept vehicle, which was powered by a unique EcoBoost 3-cylinder engine. G.M. showcased 37 production and concept vehicles, including the Sail hatchback and a Chevy Volt variant called the MPV5 electric crossover.

Volkswagen announced in Beijing that it would open two new manufacturing plants in the country and design several models specific to the Chinese market in the immediate future. VW also announced plans to invest a further $2.2 billion in the Chinese market.

Source: wheels.blogs.nytimes.com