The Art of Surprise

The Shanghai Auto Show 2009 closed its doors just recently, and this year’s exhibition has produced record results – largest exhibition area ever, more industry participants than previously, and highest number of visitors. An amazing performance given the current economic context, and the particular bad current shape of the global auto industry!

If you ask me about the most noticeable observation on this auto show, my top-of-mind response comes without hesitation: The proposition of luxury car brands altogether to the Chinese public.

This may come as surprise to some, and believe me, I was the first to be surprised myself. Traditionally, the China exhibitions in Beijing and Shanghai allow us to see how far the Chinese domestic manufacturers have already come since they have started to engage in passenger car manufacturing. So all attention was turned to the domestic brands, and honestly, they did not really disappoint. Chery and Geely introduced their multi-brand strategy, and the self-confident product presentation of the numerous Chinese brands was certainly remarkable.

With the exhibition theme “Art of Innovation” the organizers have put the topic of environmental friendly technology into the center of this year’s auto show, and we could expect that “green” is a consistent colour throughout the various concept- and product presentations. There is no doubt that the auto industry’s future lies in the ultimate synthesis of mobility and environmental sustainability, and indeed numerous car makers – international as well as Chinese domestic car makers – have showcased their propositions regarding fuel efficient vehicles as well as alternative powertrains to the public.

Still, despite noteworthy displays of environmental friendly technologies and Chinese made car brands, the most astonishing presentations could be seen on the stands of luxury car makers, to a large degree because they could not really be expected at this point. In a period of time where the recovery of the Chinese car market is widely attributed to a growing attractiveness of small vehicles, luxury brands have contributed considerably to the lot of new model launches, such as Audi with its new Q7, BMW with its X5 and X6 M-series, Porsche with its Panamera, Ferrari with its California, just to name a few. Many of these models were shown with rather powerful engines, and have aroused even more attention. Luxury car makers have fairly well played on Chinese consumers’ attraction to new and high performing vehicles. But above all, the display of these models undeniably shows the big confidence that these car manufacturers have into the growth potential of the Chinese market.

There is widespread agreement that all vehicle segments in China will deliver steady growth over the long term. But the investment of luxury car makers is not only pointed into the future, but built on confidence about a relatively quick recovery of the market in the short term. While the reduction of the purchase tax for low displacement vehicles has shown positive impact for the lower-end of the car market, high-end car makers can expect that the governmental stimulus package to boost the industry will help to improve business development and stabilize the performance on the stock market, typical income sources for consumers of luxury cars.

It appears that luxury car makers are successfully betting on China, and their bold strategies at this year’s Shanghai Auto Show have already shown first fruits: Bentley, Rolls Royce, Maybach, Ferrari, Porsche, etc. have all sold their cars directly at the exhibition.

Their vehicles are not necessarily the most fuel efficient and environment friendly cars, though. From previous research we understand that premium car owners are in a positive mindset to consider environmental aspects when purchasing a car, and I wish that luxury car manufacturers could take a lead in steering towards the environmental sustainability of the auto industry as a whole. It all boils down to their capability to offer attractive propositions to their consumers. Hopefully we can see other bold and unexpected moves at their side, so that the "Art of Surprise" establishes itself as a sustainable element of their success.

About the authour: Klaus Paur, Gasgoo's  columnist, is Regional Director Automotive for North Asia at TNS China who has over 20 years of experience in marketing and market research, 13 of which have been spent specialising in the automotive industry.