Global automakers, including Toyota Motor Corp and Volkswagen AG (VW), took the stage at the Shanghai auto show yesterday with built-for-China and electric-drive products to compete for a high-stakes comeback in the world’s largest market.
However, after a year when trends have shifted sharply against the established foreign brands that once dominated in China, executives from Chinese automakers offered a reality check: The game is moving faster and the pressure to cut prices is getting more intense.
Volkswagen said at the show that it would introduce 10 more electric vehicle (EV) models by 2026 and cut the time to develop new models by almost 40 percent to keep pace with faster-moving Chinese rivals.
Photo: AFP
“Our guiding principle is development in China for China at full speed,” VW passenger car brands chief executive Thomas Schafer said.
Toyota, which has been slow to roll out electric vehicles, used the Shanghai show to unveil two new EVs, doubling the number on offer in China under its mainstream brand.
It also introduced a Lexus-brand minivan, the “Luxury Mover,” a hybrid designed to be chauffeur driven, a preference for many Chinese luxury auto buyers.
Toyota and VW’s mass-market brands have lost share in China over the past year as the market shifted to EVs and plug-in hybrids where made-in-China brands, led by BYD Co (比亞迪), have moved faster.
In a mark of that reversal, BYD outsold Toyota and VW-brand vehicles in the first quarter of this year in China.
Yesterday, BYD launched a hatchback-styled EV, the Seagull, that takes aim at the small vehicle market that Toyota has long-dominated with models like the Corolla, a global best-seller. The price on the Seagull would start at the equivalent of just more than US$11,000.
By comparison, Toyota’s most popular EV on offer in China, the bZ4X, starts at more than US$25,000.
BMW AG, which plans to launch 11 EV models in China by the end of this year, said it had added features in response to the Chinese market, like the rear-entertainment system in the i7 sedan.
“What moves Chinese customers today, moves the world tomorrow,” BMW CEO Olivier Zipse said.
Other Chinese auto executives underlined the pace and pressure to cut costs in a market where electric-drive vehicles make up almost one-third of new sales.
Zhu Jiangmin (朱江明), chief executive of privately held Leapmotor Technologies Ltd (零跑科技), offered a bold prediction on how low prices could go, a promising notion for consumers, but threatening to automakers.
Within a decade, he expected China to be able to sell a sports utility vehicle-styled EV with a battery range of 400km for about US$7,500.
Tesla Inc’s Model Y, the US automaker’s top seller globally ahead of its Model 3, is estimated to have a range of 545km in China, but starts at almost US$40,000 in the country.
Tesla, which has faced some pushback from Chinese consumers and some of its earliest fans for not introducing new models and features faster, opted to skip the Shanghai auto show this year.
“The real situation is that the Model 3 was competitive in 2018, but not so competitive today, and it is normal for them to cut prices,” Nio Inc (蔚來汽車) founder William Li (李斌) told reporters. “You can get better cars for the same price in China.”
Li estimated Nio and other automakers that manufacture primarily in China had as much as a 20 percent cost advantage over Tesla because of China’s dominance over the supply chain and raw materials for battery-electric vehicles.
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