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Global automakers push ahead with China expansion

中国汽车市场扩大 各经销商争抢激烈.jpg

Auto sales growth in China, the world's largest market, decelerated to 6.9 percent in 2014 from 13.9 percent in the previous year. Nevertheless, a total of 23.49 million vehicles were sold last year, far outpacing the United States, the world's second largest market. U.S. consumers bought 16.5 million new vehicles in 2014.


"When you look at the marketplace, it is clearly down from the double-digit growth we've seen in the last number of years. But the market's going to grow about 7 percent this year – it's still the largest growth market in the world. So I think we need to put that in perspective," Mark Fields, CEO of Ford told CNBC on the sidelines of the Shanghai Auto Show, which kicked off on Monday.


Ford's China drive


Earlier this month, Ford and its local joint venture partner Chongqing Changan Automobile announced they had paid $6.6 billion yuan ($1.1 billion) to takeover and upgrade a factory in northeast China. The factory will increase Changan Ford's production in the mainland by 200,000 vehicles.


"Chinese consumers are really responding to our new products. It's about capitalizing on this momentum and taking advantage of that growth in the market place," Fields said.


Fields says the company's strategy to come into the market with new products in new segments is paying off.


Last October, Ford launched its luxury Lincoln brand in China, seeking to make inroads into a segment dominated by German big three – BMW, Mercedes Benz and Audi.


Despite stiff competition, Fields says the brand is off has been well received: "Three of our top 10 Lincoln dealers around the world are here in China" He estimates 2015 could be the year China overtakes the U.S. as the world's top luxury car market.


China key in shaky world


Fields was not alone in his optimism about the resilience of China's car market.


"China is critical because the rest of the world is very shaky, maybe minus North America," said said Dieter Zetsche, chairman of the Board of Management at Daimler AG and head of Mercedes-Benz Cars.


"We are kind of in catch-up mode. So, in spite of the slight slowdown of growth in China, we see ourselves going up, driven by great new product," he added.


Daimler has lagged rivals Audi and BMW in China for years in part due to problems with distribution networks that have since been fixed, say analysts.


Meanwhile, on the mass market side, Nissan CEO Carlos Ghosn is equally sanguine on the outlook for the sector.


He set the company's sales target for China at 1.3 billion units this year – up 6.5 percent from last year's 1.22 million.


"Most of the growth will come from expansion of product offerings. We're coming to segments where we didn't have an offer before addressing people that in the past did not shop with us," said Ghosn, who launched the Lannia, a new mid-size sedan aimed at younger buyers, at the Auto Show on Monday.



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