Global carmakers show off SUVs, electrics as China pledges reforms

Global carmakers touted their latest electric and SUV models in Beijing on Wednesday as they warily welcomed China's promise of better foreign access to the world's largest auto market, where domestic vehicles are making major inroads.

Industry behemoths like Volkswagen, Daimler, Toyota, Nissan, Ford and others are displaying more than 1,000 models and dozens of concept cars at the Beijing auto show.

Thousands of Chinese auto enthusiasts are expected to tour the mega-exhibition centre this week, with electric cars and gas-guzzling sport-utility vehicles grabbing the spotlight.

Nissan was one of several carmakers to announce new electric vehicles made in China for the local market during the show, with the four-door Sylphy Zero Emission that can travel 338 kilometres (210 miles) on one charge.

"The new Sylphy Zero Emission is the next step in our electrification strategy for China," said Jose Munoz, Nissan's chief performance officer, adding that the company would unveil 20 electrified models over the next five years.

Auto executives may have their minds on the brewing trade war between Beijing and Washington, with every twist and turn fanning fears it could bring their China plans to a screeching halt.

But last week Beijing announced it would liberalise foreign ownership limits in the sector, a move seen as a possible olive branch to President Donald Trump.

China currently restricts foreign auto firms to a maximum 50 percent ownership of joint ventures with local companies.

The changes will end shareholding limits for new-energy vehicle firms as soon as this year, followed by commercial vehicles in 2020 and passenger cars in 2022.

Foreign automakers, who account for more than half of vehicle sales in China, have cautiously welcomed the changes, with VW saying it has "strong" local partners in its joint ventures.

"This will have no impact on our JVs. But the overreaching principle is important. Hopefully, liberalisation will as well help for fair competition, and having a level playing field," Jochem Heizmann, CEO of Volkswagen Group China, told reporters.

Upmarket automaker Daimler, owner of Mercedes-Benz, was equally restrained when asked about possible plans to move away from its JV.

"The biggest plant of Mercedes-Benz in the world is in Beijing and we're adding a second facility, so there can be no doubt whatsoever about our relationship" with partner BAIC group, said Hubertus Troska, head of its China business.

Executives at Toyota -- which announced that it will introduce 10 new electrified vehicles by 2020, including two plug-in hybrids presented at the show -- said they too were moving cautiously on the reforms.

While Toyota has two JV partners in China, its luxury Lexus brand is imported.

"Whether we will go ahead on our own requires in-depth study," said Toyota China CEO Kazuhiro Kobayashi, citing local government regulations, procurement of parts and other issues.

- All-electric future -

The show comes as China's market hits a transition period -- the explosive growth in car sales seen over the last decade slowed last year and data from early this year point to a continued slump for many vehicle types.

Chinese consumers are following their American peers toward SUVs while policymakers in Beijing push an all-electric future.

With some 28.9 million car sales last year, the Chinese market could soon match those of the European Union and United States combined.

General Motors sold over four million cars in China last year, more than in the United States. Volkswagen sold more than three million, roughly six times its home market.

But domestic firms are outselling foreign firms in the SUV segment.

In the electric car market the figures are even more lopsided, as Beijing has shovelled money at projects in an attempt to dominate what it sees as the future.

At the auto show, the domestic upstarts have a separate exhibition hall mostly to themselves -- 124 of the 174 electric car models on display are homegrown.

Government subsidies help consumers purchase the green cars, while policymakers want a quota system to force producers to build electric vehicles, with plans to one day phase out petrol vehicles altogether.

Volkswagen Tuuesday announced investment of 15 billion euros ($18 billion) in electric and autonomous vehicles in China by 2022.

"China is our second home," said CEO Herbert Diess, with its market set to be "the biggest" worldwide for electric cars.

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