China’s EV market expanding fast
Apr-27-2021 By : fcccadmin
China’s market of electric vehicles (EVs) has been white-hot this year as more foreign brands have stepped up their activities in China. The country accounts for 55% of global NEV sales. That has led a growing number of automakers to start laying out plans to address the trend and consolidate their debut at the Shanghai International Automobile Industry Exhibition. From Bentley, Rolls-Royce, Lamborghini to Audi, foreign luxury car makers have brought their latest electric models and plans to the Shanghai auto show as they eye a bigger share of the world’s largest auto market. Britain’s Bentley launched a hybrid car, New Bentayga Hybrid at the show last week. “We definitely have a very high confidence in the China market, Bentley like every other vehicle brand has to follow customer demand. The clear future is electric worldwide and particularly China is leading this development,” Bernd Pichler, Managing Director of Bentley Motors Chinese mainland, Hong Kong and Macao, told the Global Times. “The new Bentayga incorporates a lot of feedback we received from Chinese customers. I’m very confident that we will see high numbers in the Chinese market because demand is very high for the vehicles,” he said.
Bentley’s announcement comes amid an accelerating shift by the global auto industry away from gas and diesel to battery power, where China has become a recognized frontrunner. In November 2020, China unveiled a development plan for its new-energy vehicle industry for 2021-2035 that aims to turn the country into an automotive powerhouse, including raising the proportion of new NEVs in the sales of new vehicles to 20% by 2025. By 2035, most vehicles sold will be electric ones, while those used in public transportation will be exclusively electrified, according to the plan. “New energy is not a choice. I think it is a must,” Leon Li, Director of Rolls-Royce Motor Cars Greater China region told the Global Times. All of Rolls-Royce products will be all fully electric in the next 10 years. “From automatic driving, artificial intelligence, to connectivity of cars, I think it is a future trend for each brand,” Li said.
Lamborghini is set to unveil its electric plan in May and seeks to deepen collaboration with local Chinese tech companies in automotive connectivity, Asia Pacific Head of Lamborghini Francesco Scardaoni, told the Global Times. “I would say China is the most advanced market in terms of connected services and AI technology, meaning that if we want to be a champion in this segment we have to localize our suppliers for connectivity and AI technology,” he said. In the more mainstream luxury market, Audi is teaming up with Chinese carmaker FAW to produce luxury electric vehicles with the establishment of a joint-venture factory in Changchun, Jilin province. Six new electric vehicle models will be introduced by 2025, said Werner Eichhorn, President of Audi China.
The entry of high-end vehicles comes amid a backdrop of increasing competition in China’s electric car market already crowded with a number of local start-ups, like Nio, XPeng, Li Auto and new tech players, including Huawei Technologies and Baidu, all vying for a slice of the domestic market. “The new-energy market has been in the making for several years, but today it is seen by everyone. Today it is just erupting like a volcano. I figure that start-up companies like Nio are very happy to see a competitive market,” Qin Lihong, Director and President of Nio told the Global Times. “We need to see that the intensity of competition will increase, which will push us to work harder. Although the best high-end gasoline-powered auto manufacturers are big in scale, we are at least five years ahead of them in the electric business. These five years is a valuable time window. I expect our advantage to be maintained for at least two or three years,” Qin said.
Huawei has also unveiled the Arcfox Alpha S, a HarmonyOS-powered EV co-developed with BAIC at the show. It also featured the wireless charging technology developed by Chinese wireless EV charging start-up Invispower Co, founded in 2015 with an R&D team from Tsinghua University. Compared with the traditional charging mode that requires manual plug-in of a charging gun, the wireless charging can function at any time and is expected to bring a safer and more convenient user experience. The industry still needs to address problems including chip shortages, insufficient charging facilities and the sudden collapse of smaller companies, independent car analyst Song Jin told the Global Times.
IC shortage could disrupt vehicle production in China
Dec-15-2020 By : fcccadmin
A shortage of semiconductors necessary for making the electronic components of automobiles is likely to disrupt vehicle production in China well into the next year, but without widespread suspension, experts said. Continental, a German firm that purchases chips and produces components for carmakers, told China Daily that companies along the industry chain are working together on solutions, but the shortages may continue well into 2021. German carmaker Volkswagen is one of the companies that is contemplating suspending production of some models in China, especially high-end ones, which usually are equipped with more advanced electronic components. A representative at SAIC Volkswagen said the company is facing an acute shortage of electronic components and control units, mainly from Continental and another German supplier, Bosch. Continental and Volkswagen said the major causes for the shortages are the Covid-19-caused uncertainties and the unexpectedly fast recovery in the auto market, especially in China.
The China Association of Automobile Manufacturers said that more than 22.47 million vehicles were sold in China during the first 11 months of the year, down 2.9% on a yearly basis, but less than the 15% to 25% forecast when the pandemic was at its peak in China earlier this year. “This uncertainty has led to a potential interruption in automotive production, with the situation getting more critical as demand has risen due to the full-speed recovery of the Chinese market. To date, customer deliveries have not been affected,” Volkswagen Group China said in a statement. Continental said that although semiconductor manufacturers have already responded to the unexpected demand with capacity expansions, the required additional volumes will only be available in six to nine months due to the usual lead times in the semiconductor industry. “Therefore, the potential delivery bottlenecks may last into 2021,” said Continental. But that does not mean that China will see widespread production suspension in its auto industry.
A survey by China Cailian Press of over 20 carmakers in the country shows that 16, including Mercedes-Benz and startup Nio, are not seeing such risks in the short term, either because they have enough stocks or they don’t need too many chips. Considering the supply shortages, Dutch automotive chip supplier NXP Semiconductors told customers that it must raise prices of all products because it is facing a “significant increase” in material costs and a “severe shortage” of chips. Chinese chip companies are stepping up research and development (R&D) in an effort to grab a share of the market as cars are becoming more smart and connected, but so far they have been almost negligible in the global auto chip industry. Continental told China Daily that so far there is not one Chinese chipmaker in its global procurement list. Huang Jipo, Chairman of Chinese chipmaker Sine Microelectronics, said carmakers have stringent standards for the reliability and stability of automobile chips, which makes them prefer established foreign chip makers over emerging Chinese companies. “But as Chinese companies beef up research and development capabilities, they have the potential to enter the mainstream supply chain of automakers,” Huang said. In 2019, the global auto chip market was worth around USD47.5 billion, while China’s auto chip industry was valued at less than CNY15 billion (USD2.29 billion), accounting for around 4.5% of the global total, the China Daily reports.
China’s rebounding vehicle sales are expected to total 25 million this year, narrowing the gap with last year to 2%, while in 2021, the upward trajectory will continue, with the market expected to grow to 30 million in five years, according to the China Association of Automobile Manufacturers (CAAM). As the world’s biggest vehicle market, China continues to lead the global auto industry in recovering from the Covid-19 pandemic. The nation’s automobile sector also was hit hard early this year. The first monthly sales growth did not come until April. But the growth has been in double digits since May. “The recovery has turned out to be much better than expected,” said Fu Bingfeng, CAAM’s Executive Vice President.
New energy vehicles (NEVs) are expected to see record high sales this year. Deliveries in November totaled nearly 200,000, more than double the figure in the same month of 2019. CAAM said total deliveries would reach 1.3 million in 2020, up 8% year-on-year, the China Daily reports.
Foreign car makers offer Chinese apps to better compete in the country
Dec-01-2020 By : fcccadmin
International carmakers are partnering with Chinese internet companies to offer in-car applications already available in the country, as they compete for car buyers. QQ music, a popular app on Chinese smartphones, became available last month in Maserati models sold in China, ranging from the Levante sport utility vehicle (SUV) to the Quattroporte sedan. This is just one example of the features available to Maserati’s Chinese customers after the Italian carmaker introduced a connectivity system developed by Tencent. Mirko Bordiga, Managing Director of Maserati China, said: “What you should do as a brand is to listen to your customers and offer them what they want.” The brand sold more than 60,000 cars in China and its market is growing thanks to the younger generation. Like many premium brands, Maserati’s Chinese customers are the youngest compared with those in other parts of the world. “Of course there are some elements that have to be localized in our cars, like the system for which we cooperated with Tencent,” Bordiga said. “That is clearly just for Chinese customers.”
German carmaker Audi is taking its cooperation with Alibaba to new heights. The two companies said they will work together to improve in-car applications like navigation and digital assistants.“The alliance will enable Audi to better serve Chinese customers. It is further proof of our ‘In China, For China’ commitment,” said Werner Eichhorn, President of China Operations at Audi. Audi’s cooperation with Alibaba’s navigation subsidiary NavInfo started in 2006. NavInfo will not only provide its products to the company, but also give research and development (R&D) support for Audi’s local innovations. NavInfo President Liu Zhenfei said: “Since we are all facing the future of intelligent driving, we will for the first time provide our full capabilities to Audi, including our next-generation navigation technology and high-definition maps.”
Besides navigation, Audi is including Alibaba’s in-car digital assistant service Tmall Genie in its self-developed connectivity platform. Tmall Genie is a service-oriented smart assistant that aims to connect different terminals and platforms in fields like automobiles, real estate, smart homes and hotels. Ku Wei, President of Tmall Genie, said: “Users can enjoy intelligent services simply with one ID. We will also explore more intelligent lifestyle options in vehicle scenarios with our carmaker partners. We hope to help car owners enjoy high-quality services conveniently.” Tmall Genie has been available in BMW vehicles from 2019. Last year, U.S. carmaker Ford launched its China-specific infotainment system that leveraged Baidu’s artificial intelligence (AI) for improved connectivity. Roy Lu, Director of the Gasgoo Auto Research Institute, said since international carmakers’ connectivity and digitalized functions are developed for global markets, they do not work as well as those from the Chinese companies, who have a better understanding of local customer demand, the China Daily reports.
An industry study by JD Power China also said that automakers must take user-related factors into account when carrying out technological innovation. “Intelligent and connected vehicles is the direction of the strategic transformation for both the global and Chinese automotive industries,” said Eileen Ren, Vice President of JD Power China’s new-energy vehicle and smart vehicle practice. “The degree of intellectualization of vehicles will determine whether the brands may gain competitive advantages in the future.” The study found that 45% of owners said they never used certain technical features because they did not need them – the three cited most often being mobile office services (71%); safe exit assist (53%) and dynamic driving assistance (47%). Among owners who would like to use advanced features, many said the main reasons for not doing so were that they didn’t know how or needed more training. Reversing assistance was the most often used and satisfying of the top three installed features. The top three advanced technology features with the highest installation rate in the China market are intelligent voice assistant (29%); reversing assistant (22%) and active lane change assist (13%).
Among the top 10 features that owners indicate they are most likely to install in their next vehicle, seven are for Active Driving Assistance Systems and automated features, among which the three most often considered are: OEM-installed trip recorder or dash camera (37%); reversing assistant (35%) and rear cross traffic warning (30%), the Shanghai Daily reports.
Beijing auto show opened as the world’s only such in-person event of the year
Sep-29-2020 By : fcccadmin
The China Auto 2020 expo in Beijing finally opened on September 26, after a five-month delay due to the Covid-19 pandemic. The show is the only automotive event to be held in-person in the world this year, after similar events such as in Geneva were canceled. But visitors needed to wear face masks, have their body temperature checked and present health-document scans in a reminder that the Covid-19 pandemic still casts uncertainty over the auto industry.
Overall 785 vehicles are on display, 82 of which are making their debut. Fourteen of them are from multinational companies. New energy vehicles on display number 160. Among the companies with models making their debut is Audi, including the Audi Q5L Sportback, which is designed for Chinese consumers. Rolls-Royce unveiled its new Ghost Extended, following the car’s global launch earlier this month. Jaguar Land Rover’s New Discovery Sport P300e, a mid-sized luxury SUV, is making its China debut.
“The Chinese market has recovered faster than expected, and is the best of all markets,” Leon Li, Director of Rolls-Royce’s Greater China region, told the Global Times. He said the company’s UK factory resumed work in May,the first car manufacturer in the UK to do so, mainly due to the unexpected rising demand from China, its second largest market. “Our expectations for the year are much more optimistic than in February and March,” he said. Sales in China normally account for 20% to 25% of Jaguar’s global sales, but the figure jumped to 50% in March and April this year, Richard Shore, Jaguar Land Rover’s President of integrated marketing, sales and service in China, told the Global Times.
The Chinese market has become more critical for global partners in 2020, as China is the only of the world’s major auto markets clearly recovering. It has grown since April, after work resumed in March. Daimler’s Mercedes-Benz brand achieved its””best second quarter ever in terms of unit sales” in China, where car sales increased by 21.6% year-on-year, the German carmaker said. In contrast to other regions where sales declined strongly due to the impact of Covid-19, sales in China went up and even grew by 35% for commercial vans during the period, according to Daimler. The development in China would show the “impressive speed at which demand is currently recovering in our largest market,” Britta Seeger, Member of the Boards of Management of Daimler and Mercedes-Benz, said in a statement, the Global Times reports.
According to the China Daily, electric vehicles are a prominent feature of China Auto 2020. Honda’s SUV e-concept and Nissan’s Ariya crossover, both of which are the first electric model for the brands, are attracting visitors to their respective booths. Chinese startups are increasing their offerings. Nio is demonstrating its battery-swap service and autonomous driving system. WM, which has just finished a CNY10 billion financing round, announced prices of its six-seat EX6 Plus SUV. Meanwhile, Xpeng unveiled a flying car. The Taycan Turbo S, a flagship model of Porsche’s first electric sports car, is sharing a stage with the all-new Taycan at the auto show as well. The Taycan base model will be delivered to China in December this year, earlier than in any other market. Porsche delivered 39,603 vehicles in the first half of 2020 in China, which remains its largest single market.
The Shanghai Daily writes that China’s auto sales rose 11.6% in August from a year earlier, the fifth straight monthly rise after plunging during the lockdown. In February, sales collapsed by a record 79% to their lowest level since 2005. Executives at Germany’s BMW and Guangzhou-based GAC, which has partnerships with Toyota Motor Corp and Honda Motor Co, forecast full year sales growth in China, while Chongqing Changan Automobile predicted the same for its local joint venture with Ford Motor Co. Great Wall Motor Co, China’s top pickup truck maker, aims to boost overseas sales this year. Germany’s Audi is in talks with long-term partner China FAW Group Corp about creating a second joint venture to build electric cars on its PPE platform in China.
China’s typically busy car-buying season, “Golden September, Silver October”, is off to a good start, according to preliminary data, with passenger car sales up 12% in the first 20 days of September. The rebound means this year’s sales will fall less than 10%, the China Association of Automobile Manufacturers (CAAM) estimates, better than its May forecast of a 15% to 25% decline. Premium vehicles accounted for a record 15% of the Chinese market in August, up from around 10% for all of last year.
China’s car market recovering as consumers are eager to buy cars
Jun-16-2020 By : fcccadmin
The world’s automotive industry has endured a tough test during the coronavirus pandemic, but China has emerged from the sales decline in May, officials said at the China Auto Chongqing Summit on June 13. Wang Xia, Chairman of the Automotive Industry Committee of China Council for the Promotion of International Trade (CCPIT), said the pandemic has brought alarming damage to the auto industry across the globe. Some global automakers had to reduce production, cut wages and jobs, and even withdraw from the Chinese market. Statistics show that China produced 7.79 million and sold 7.96 million vehicles in the first five months of 2020, down 24.1% and 22.6% year-on-year respectively. More than 1,000 dealers applied for bankruptcy and some small car companies might not be able to recover from the outbreak.
Despite the heavy losses, China’s car market has started revving up again, Wang said. In May, sales increased 5.9% compared from April and 14.5% year-on-year. A total of 2.19 million vehicles were sold last month, including 1.67 million passenger vehicles, up 7% from the same month last year. Carmakers are revving up production as well. The 2.19 million vehicles made in May represented an increase of 18.2% from the same month last year. The CAAM said that the 23 carmakers’ 204 plants across the country had all resumed operations.
“The long-lost double-digit growth showed that vehicle purchase demand is steadily releasing and the impact of the pandemic is ending,” Wang said. Last month, vehicle exports declined 36% and the import of automobile components decreased 24% compared with same period last year. Among the world’s four largest auto markets – China, the United States, Germany and Japan – only China achieved a negative-to-positive reversal. Recovery in the overseas car markets will still take some time, Wang said. In May, premium vehicle sales increased more than 20% year-on-year, while the demand of vehicles under CNY80,000 remained low.
More people in China are showing an interest in owning a car as the Covid-19 pandemic is brought under control. In a survey of 1,000 people in April by UBS Evidence Lab, 27% of respondents said the pandemic has made them more willing to buy a car. That is 10 percentage points higher than a survey of 1,000 people UBS surveyed in February, when the pandemic was at its peak in the country.
Some carmakers have released their May sales. FAW-Volkswagen topped the list of carmakers in China in May. It sold 186,777 vehicles under its Volkswagen, Audi and Jetta brands, up 22% year-on-year. GAC Toyota had its best-ever monthly sales in May, with 68,518 sold, up 32% year-on-year. Sino-U.S. joint venture SAIC-GM-Wuling sold 120,000 vehicles during the month, up 11% year-on-year. Changan Ford, another Sino-U.S. partnership, delivered 23,491 units in May, up 130% from the same month in 2019 and up 31.4% from April. Japanese carmaker Nissan sold 130,016 vehicles in China in May, up 6.7% year-on-year. Chinese electric car startup Nio sold a record high of 3,436 vehicles in May, up 215.5% year-on-year. “We expect to achieve our delivery goal for the second quarter of 2020, while continuously improving the gross margin and narrowing the operating loss,” said Nio Chief Financial Officer Steven Feng.
Vehicle sales for 2020 are likely to see a slide in the single digits instead of double digits as many organizations had estimated. In terms of China’s new energy vehicle initiative, UBS said the pandemic will have little effect. “In China, which has now experienced a rapid ‘v-shaped’ rebound during April and May of 2020, we expect to end the year with a 9% decline in sales for 2020,” said Shiv Shivaraman, AlixPartners Local Market Leader for Greater China. But he added that he does not expect China’s auto sales to return to the peak of 2017 before 2025. The company’s global sales forecast for 2020 is what the firm calls a “mixed-speed recovery”, with China recovering the fastest, to 22.5 million units; followed by the US, at 13.6 million; and Europe, at just 14.1 million.
Sales in the commercial vehicle sector also rebounded. In May, sales totaled 520,000, up 48% year-on-year as workers returned to their offices. Total sales in the first five months reached 1.85 million, down 1% year-on-year. The new energy vehicle sector is yet to turn positive. A total of 84,000 units were sold in May, still a 25.8% fall from the same month in 2019. Sales from January to May were 295,000, a 40% nosedive year-on-year, the China Daily reports.
China’s vehicle exports remained at a lower level as merely 49,000 vehicles were sold in May, down 37.4% year-on-year. From January to May, vehicle exports totaled 323,000, falling 17.5% year-on-year.
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