Auto Shanghai 2015: Opulence is the Unofficial Theme
Last week I saw a writeup on the new Lincoln Continental Concept, separate from the excellent one we did here at HECN. The big takeaways were that the car was aimed squarely at the Chinese market, where there are just enough rich people (and poor people) to make the idea of chauffeurs quite popular. As we’ll discuss in a separate post, Volvo is bringing a new Excellence version of the new XC90 full-size SUV. Space for 7, built for 4. So the big Maybach-style backseat is looking to be all the rage. Opulence and luxury. The nice thing is that, given the quality of the air in Chinese cities, almost all of these cars will integrate some type of green powertrain.
As we begin a series of posts on Auto Shanghai 2015, keep in mind that China is the Wild West for the automakers. No, maybe closer to the Oklahoma Land Rush. China is the place where the marques are looking to expand and thrive. China is the source of much of their recent profits, and is the market of their dreams. Take a look at a few recent headlines:
- Daimler Forecasts 10% Profit Growth–Luxury Car Maker Expects Buoyant Demand in U.S. and China; New Models to Close Gap With BMW
- If BMW’s China Money Making Machine Is Under Pressure, Expect More Victims–BMW is believed to make about 50 per cent of its annual profits in China.
- Volkswagen posts record profit on China sales ‘success’–Skyrocketing sales in China are helping Germany’s Volkswagen Group steal a lead over its other global automaker rivals, chief executive Martin Winterkorn told CNBC.
- GM sees improved profit in 2015 on China, U.S. growth–General Motors Co (GM.N) on Wednesday forecast its 2015 operating profit will increase from last year due mostly to growth in its two largest auto markets, China and the United States.
I could go on, exchanging different automakers. Jaguar. Ferrari. Lamborghini. Ford. Volvo, not so much. They went at it from the other direction and was purchased by Geely, a Chinese automaker. Apparently Geely and safety were the exact opposite of Volvo and safety. So Geely is buying what they need, and giving Volvo room to grow properly (for now). If they have the patience, it could be a helluva turnaround.
So Auto Shanghai 2015 might be more than a feint about future strategy. It might be strong statements about where automakers see places to find new sales and higher profits.
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