Shanghai surprise

  • 09-Jul-2009 12:53 EDT
Geely GE concept.JPG
Everyone was talking ab­out Geely’s Shanghai Englon GE ultral­uxury business limousine concept, which was undoubtedly the star of the show. Geely estimates that it can sell up to 30,000 units in China over a five-year period at a price of 1 million yuan (about $146,500).

­Geely and Chery, two of the best-known carmakers in China, launched six completely new brands and 51 new models, as well as revitalized their own existing brands, at the 2009 Shanghai Motor Show.

Great Wall also announced a new brand but along much more specialist lines—rugged and upmarket, with four-wheel-drive Hover versions of most of its models, from the Peri supermini (H1) all the way up to a luxury off-roader concept, the H7. The original Hover SUV was shown in second-generation form called the H5.

Dongfeng, partner of Peugeot-Citroen, Nissan, Honda, and others announced its own new Dongfeng brand, in the guise of a small sedan, the S30. Dongfeng also previewed its own-brand supermini for production later this year, as well as executive and electric car concepts. Dongfeng’s motto for the show was "Chinese Dongfeng, Global Dongfeng." The wealth of new brands revealed at the show are not only intended to please local customers but also to be used in export markets.

Geely and Chery, rebranded

Geely used the largest exhibition stand at the show to reveal 22 new models and a new platform strategy that will spawn 40 models from 15 platforms by 2015. The company chose not to show any of its existing "old guard" current production models.

Three new brands and logos were announced in addition to the new Geely upturned "G" logo: Emgrand (a combo of Empire Grand: stability and power), Gleagle (Global Eagle; youthful, exciting design), and Shanghai Englon (England London: classic, noble, and heroic, with a lot of British input from Geely’s joint venture with London Taxis International).

The message was clear: this is “New Geely,” soundly reinforced by Mike Ma, Geely’s Chief Engineer and Director of Design. Ma explained at the Interior Motives conference running at the same time as Shanghai Auto: “We have to get rid of the old Geely image. We still lack brand DNA, however.”

That isn’t stopping the company from massively expanding its current 200,000 units a year production. “We are expanding and refining our sales and distribution network to prepare for the new brands, and we couldn’t expand to 600,000 to 700,000 units a year by 2015 without these new brands,” said Company Director Liu Quan Liang.

Chery’s three new brands heralded the arrival of “Big Chery.” The brands Riich (pronounced ‘ray-chee’ in Chinese; with the ‘ray’ syllable meaning luxury), Rely, and Karry represent different vehicle segments, with Riich being applied to executive cars and luxury versions of small cars, Rely for MPVs and SUVs, and Karry for light commercial vehicles.

The Chery nameplate will continue to be used on conventional bodystyle medium/small vehicles such as the A3 sedan and hatchback. The A3 is selling 5000 units/month and was joined at the show by the announcement of a new 2.0-L version that uses a Renault-sourced four-speed automatic transmission. This entered production shortly before the show.

Luxury business transport—a new direction

The luxury end of China’s unique auto market is developing in two different directions: the conventional high-end sedan and the luxury minivan, with features such as GPS, DVD, refrigerator, and leather trim. While many current upscale minivans are based on long-manufactured-in-China traditional Japanese "bread-van" platforms (such as the Toyota Hiace), Shanghai GM entered the arena with one of the most convincing "van as an office" concepts.

The Buick Business Concept features not only a wealth of traditional Chinese styling cues designed specifically to attract local buyers but also an advanced hybrid powertrain. With a luxury soft-touch and leather interior, the concept was styled in-house by Shanghai GM’s PATAC center using an extremely high level of local design input.

“Local design is very important to the Chinese market; 97-98% of our designers and stylists at PATAC are Chinese,” PATAC’s Chief Interior Design Director Michael Stapleton told AEI.

New luxury sedan concepts

The traditional executive and luxury segment in China is represented by the Toyota Camry, Honda Accord, Audi A6L, and Volkswagen Passat (the Magotan, restyled for Shanghai Auto 2009), all locally made. However, Chinese automakers do not intend to allow overseas brands to dominate the segment without a fight; virtually every domestic exhibitor had concept executive/luxury sedans on display using their own local brands.

Chery fielded the upmarket full-size—4.7 m (185 in) long—Riich A6, which entered series production in March, and the A5 sedans clearly targeted at Audi. Concept luxury sedans, all powered by no larger than 3.0- to 3.5-L V6 gasoline engines, were displayed by Changan, Dongfeng, Geely, Guangzhou Automotive (Honda and Toyota’s Chinese joint-venture manufacturing partner), and Jiang Huai.

Safety: a key development

Safety is a big concern in China, particularly for buyers of small vehicles.

“The Chinese public has always thought of small cars as unsafe, so we are strongly emphasizing our safe designs and safety equipment,” Zhang Xiao Dong, Geely press officer, told AEi. Indeed, the new Geely Panda supermini comes with ESP by Continental, and Chery’s A3 is the first Chinese car to have ESP.

Curtain airbags are also beginning to see production in Chinese cars, with the small car lead being set by Toyota’s joint-venture Yaris, which contains six airbags; a large number for any car in China, let alone a supermini.

Geely promises that safety will not be compromised in small cars and that every one of its products will meet at least the C-NCAP (China’s domestic active and passive safety rating system, modeled on the European NCAP) four-star rating, with 80% of its cars reaching five stars.

New transmissions

Geely, in a recent coup, managed to purchase an Australian transmissions manufacturer in March this year.

“We have had a lot of problems in the past decade, but things will be better and better in the future," Geely founder and Chairman, Li Shufu, said at the Shanghai press conference. "We have taken our first steps and bought DSI, the Australian automatic transmissions specialist. Even today, no one in China has really solved the problem of how to develop and produce automatic transmissions. With our purchase of DSI, Geely can confidently solve this problem.”

The purchase gives Geely access to a range of conventional ATs and also new dual-clutch (DCT) know-how. Two of Geely’s concept cars at the show were listed as having 3.5-L V6 engines coupled with seven-speed DCT gearboxes.

Ford is also increasing its technology content in China. Nigel Harris, General Manager of Ford Mazda Sales in China, announced that “EcoBoost turbocharging and PowerShift dual-clutch transmissions will enter production in vehicles produced by Changan Ford Mazda in 2010.” The company also announced the start of Chinese production of its new four-door Fiesta sedan at the show.

High-technology engine

Turbocharging, GDI (gasoline direct injection), VVT (variable valve timing), and EGR (exhaust gas recirculation) were all in evidence at the Shanghai show, with some impressive new designs being fielded by Great Wall, Geely, and Chery. Chery’s strong partnership with the U.K.’s Ricardo has already resulted in a swathe of light and medium hybrid applications, and now the new Chery Riich A6 executive sedan offers an economical but competitive 2.0-L turbocharged engine that produces 125 kW (168 hp) and 235 N·m (173 lb·ft) in manual six-speed and CVT variants.

High-tech diesel for export?

Chery, Geely, and Great Wall have all engineered EU IV and V emissions-rated high-output turbo and common-rail diesel engines, but the market is still not right for diesel in China. The availability of sufficiently clean-diesel fuel is limited to the comparatively rich eastern coastal regions and some central northern provinces along the Inner Mongolian border. The vast majority of inland China does not have access to such fuel, making it difficult for diesel cars to become a reality across China. What these engines will ideally equip the automakers for, however, is their forays onto the European and other diesel-friendly markets when high-volume exports begin.

Bumper years to come

Besides Chery, Geely, and Great Wall, other Chinese automakers were content to show new energy and sedan concept vehicles, along with a handful of new models for imminent production and sale. They all featured fresh designs, modern safety equipment, and highly competitive pricing to suit today’s demanding Chinese consumer.

Most automakers, however, appear to be holding back until nearer the "bumper" years around 2015. At that time, China’s highly educated, independent, and new-thinking post-'80s and '90s generations will be 25-35 years of age—the ideal car-buying age—and there will be more than 200 million of them by 2015.

While new brands can be risky and require careful positioning and strategy, most of China’s carmakers are so young (Geely and BYD started in 1998, Chery in 1999) that they have very little in the way of brand identity. As proven by Mercedes-Benz, BMW, Audi, and other foreign heritage brands in China, identifiable, strongly differentiated brands are a great asset. China's automakers haven’t started a moment too soon to grow the "brand heritage" that they will need to attract this new wealth.

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