At Shanghai Auto Show, brands balance green push and SUV demand

Chinese production ties in with the Chinese government's push for more electric cars over the next five years, with China set to become the world's largest market for EV and plug-in hybrid vehicles as the government looks to address air quality concerns.

"It's hard for someone with an EV to come and take away market share from SUVs", stated Ben Cavender of China Market Research Group.

In the 17th biennial auto show, open to the public from April 21-28, Hyundai Motor will debut the all-new ix35 and its sister company Kia will reveal the K2 Cross.

Growth in SUV segments and new energy vehicles, especially electric cars, can help the Chinese auto market expand 8 percent per year, Francois Provost, senior vice president and Asia-Pacific chairman at Renault, told CNBC on the sidelines of the show. SUVs compromised 40 percent of sales, while sedan purchases dropped 4.9 percent. "There's just not room enough for that many players any more", said Johan Karlberg, a Shanghai-based partner with global consultancy Roland Berger.

For years, carmakers have struggled to gain economies of scale to bring down the cost of electric cars, which have failed to gain traction with consumers in part due to their price.

Local Internet giants like Baidu and Alibaba-invested provider also displayed smart driving, artificial intelligence and navigation technologies in the show.

General Motors Co. plans to make and sell a gasoline-electric hybrid version of its Chevrolet Volt in China, as Beijing presses global automakers to promote alternatives to gasoline.

Digitization, sustainability and urbanization are top three corporate strategies in China, said Audi executives who saw great business opportunities for China's 1.1 billion mobile users.

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Regulators have jolted the industry with a proposal to require electrics to account for at least 8 percent of each brand's production by next year, rising to 10 percent in 2019 and 12 percent in 2020.

Officially MG says that the auto offers "a glimpse of the future" and is a 'next generation vehicle (aiming) to push the boundaries of innovation and technology, while meeting the needs of today's trend-setting auto buyers'.

Jochem Heizmann, China CEO for Volkswagen, the country's top auto brand, told reporters Tuesday VW was close to cementing a partnership with Chinese car-sharing operator Shouqi serving multiple cities - partly to boost sales of VW electric vehicles.

SAIC, the country's largest automaker, said it expects to double sales to 600,000 units this year.

Foreign brands take a different view of their quality image following a consumer rights show on China Central Television two years ago which accused one foreign manufacturer of selling vehicles with faulty gearboxes and accused others of carrying out unnecessary repairs and replacements.

Other Chinese brands offer plug-in electrics but most sold only a few hundred vehicles past year.

Lincoln, which delivered 11,731 vehicles in China in the first quarter as a growth of 114 percent year-on-year, expected the trend as "personal luxury" on innovation on smarting technology and hybrid energy.

Additionally, Dana's new Spicer Electrified™ e-axles for electric transit buses and city delivery vehicles feature a fully integrated motor and gear box and leverage the company's vast experience in chassis drivetrain applications.

  • Darren Santiago