Carmakers are seeking new growth points with niche products such as multi-purpose vehicles, off-road vehicles, and sports cars at the Guangzhou International Automobile Exhibition.
Chinese electric vehicle startups Li Auto and Xpeng Motors, as well as Germany's Volkswagen Group, are showcasing new MPVs at the annual 10-day Guangzhou Auto Show, Yicai learned.
The market for mainstream cars, such as electric sedans and sport-utility vehicles, is so competitive that cut-throat pricing does not allow much scope for expansion, forcing automakers to look at previously niche products such as MPVs to improve their bottom lines, Cui Ye, planning director at an EV maker, told Yicai.
“Previously, we would set the prices of new models at a level that can guarantee profit and also save room for upcoming price cuts,” Cui said. “But now, we can’t do that.”
At the motor show, visitors can take a look at Li Auto’s Mega, a brand-new MPV that has not yet been launched into the market. Nearby, Xpeng's first MPV, the X9, is also drawing much attention.
VW is exhibiting its ID.Buzz, an MPV that has already hit the European market. An employee of the German carmaker said SAIC Volkswagen Automotive, it joint venture with China’s biggest carmaker, will start producing the model.
The market for MPVs is just like its counterpart for SUVs was over a decade or two decades ago when these big cars started to become popular, said Jim Rowan, president and chief executive of Volvo Cars. Automakers need to speed up their business positioning to grab this opportunity, he added.
FAW Toyota is showcasing its Land Cruiser Prado, a well-known off-road vehicle in China. Ford Motor has brought the Bronco, one of the best-selling ORVs in the United States. Sam Wu, chief executive of Ford China, said the firm will gradually introduce top-rated and hardcore ORVs such as the Ford F-150 Raptor, Ford Ranger, and Ford Bronco into the Chinese market.
Data from online Chinese car dealer Autohome show that the share of people paying attention to electric MPVs has risen to 16.3 percent this year from 6.1 percent in 2021. However, the market is still in the early stages with only a few products launched so far.
In the future, the market for light ORVs will exceed two million units, and most of those will be gas-powered at first, according to Li Xueyong, general manager of Jetour, a Chery marque. Later, hybrid as well as extended-range vehicles will account for more than 40 percent of the total, Li added.
“The competition in markets for MPVs and ORVs is not that fierce as in markets of SUVs and sedans. Some best-sellers can even be sold at a higher price. But with domestic and foreign car companies successively entering the market, it is unknown whether this trend can be sustained," said Cui Ye.
“The market competition for MPVs and ORVs is not as fierce as that for SUVs and sedans,” Cui said. “Some best-sellers can even be sold at higher prices. But with domestic and foreign carmakers successively entering the market, it’s unclear whether this trend can go on.”
The 21st Guangzhou Auto Show runs from Nov. 17 to 26 at the Canton Fair Complex on Pazhou island.
