This year’s show against the backdrop of a global energy shortage and climate discussion, is of additional significance. EV sales are up and the high-end of the market is more fluid than ever.
Photo by Hou Zhuokai
By HOU Zhuokai
At first glance, Guangzhou International Motor Show, which opened on November 19, looks like another geek festival. Car enthusiasts roam around gleaming new models, comparing horsepower and torque. But this year’s show, taking place against the backdrop of the global energy shortage and climate discussion, is of additional significance.
From January to October, electric vehicle (EV) sales in China almost doubled year-over-year, now taking up 12 percent of the car market. In the push for renewables, successful domestic carmakers are making economies of scale and competing well against foreign brands, but domestic brands have yet to mount any real challenge at the high end of the market.
Low and mid-range traditional carmakers have come up with premium EVs. Great Wall Motors, known for its SUVs and pickup trucks - mostly below 200,000 yuan - released a pastel green sports car that comes with a fully electronic platform and a 488,000-yuan (US$76,000) price tag. The Tesla 3 costs 399,000 yuan. Another highlight is an SUV by SAIC, to be delivered next year. SAIC hasn’t disclosed the price yet, but the model reportedly targets the Tesla Y.
Domestic automakers started venturing into the higher end in 2016. With China’s luxury car market growing at double-digit rates, they are now seen as a force to be reckoned with but not in the same league as real luxury brands. A key difference is in pricing power. Geely, which sold 630,000 cars in H1 2021, made about US$600 yuan per vehicle. Porsche makes US$18,000 per vehicle. Profitability matters, because profits feed R&D.
A quarter of the models on show are electric and about a third of them come from overseas. More than 2.5 million EVs were sold in China this year by October, up 170 percent. Of the fifteen best-selling EV makers, all but one are domestic. The only foreign brand on the list, unsurprisingly, is Tesla.
This is partly because established carmakers were slow to switch to EVs. But BMW, Audi, and Mercedes-Benz all showed up with new EVs anyway. BMW displayed a large electric SUV. Mercedes-Benz’s models are more compact. Audi unveiled two concept cars.
This poses a formidable challenge to domestic automakers, whose technology does not always stand up. But changes happen fast in the EV world. BYD, once synonymous with budget cars, has been on a bid to build its own batteries and power systems since 2015. Last year it sold more EVs than some of its more glamorous competitors such as Li Auto and XPeng.
Carmakers no longer talk about cars as merely a means of transportation. Dealerships are out. EV Startups and traditional carmakers alike are relying more on direct-to-consumer channels including showrooms and apps, offering concierge-style customer service. Thorsten Godulla, head of sales and marketing at SAIC Audi, told Jiemian News that t closer relationships with customers will provide a better all-round experience. Thorsten Godulla, head of sales and marketing at SAIC Audi, told Jiemian News that the company seeks to build closer relationships with customers by providing a better experience.
The vehicles themselves are becoming smarter and more connected to the internet of things. TAN Benhong, CEO of Avatar, a smart car entity owned by Chang'an, CATL and Huawei, said smart cars should engage emotionally and intellectually.