Monday, April 21, 2008

Chrysler wants top 10 spot

Automaker ready to speed up growth in China


BEIJING -- Chrysler LLC aims to grow even faster in China than the blistering pace set by the rest of the industry there in hopes of cracking the market's top 10, its CEO of Asia Operations said Sunday during an interview at the Beijing auto show.

Philip Murtaugh, the Chrysler executive, indicated that the Auburn Hills automaker will try to grow its sales in China by more than 20% per year through joint ventures with local firms.

His comments reflect the optimism and fierce competition of the fast-growing Chinese auto industry, which was on display at the Beijing show that opened Sunday. At current rates, China could become the world's largest national auto market by 2015.

The Chinese automotive market is projected to grow by 8% to 10% a year for the next decade, but Murtaugh said he thinks it will average between 15% and 20% instead.

"We have to grow faster if we want to be top 10," he said.

Murtaugh said the top 10 goal reflects the automaker's position globally. But Chrysler currently is not among China's top 30, according to J.D. Power & Associates.

Chrysler is talking to potential joint venture partners in China, Murtaugh said. But it hasn't decided if there will be one or more partners.

Ups, downs of the show

The show, known formally as Auto China 2008, was large and elaborate. But the exhibit hall was not finished, and security guards occasionally blocked visitors from entering or exiting the conference center, attendees said.

"The show was a microcosm of the country," said Joseph Phillippi of AutoTrends Consulting. "They're coming up the learning curve awfully fast."

With sales growing by about 1 million vehicles a year, China is expected to surpass the United States as the world's largest national market in the next decade.

In many ways, the improving knowledge and execution is staggering, Phillippi said, noting the high-quality designs at some of China's lesser-known brands, JAC and LiFan.

At the same time, the Beijing show was held in a venue that struggled to move large numbers of visitors in and out from the city center -- raising concerns about the congestion Olympic visitors will experience in August.

Many attendees reported that a short-distance trip that typically takes a little less than one hour took as much as three for those traveling without the police escorts afforded to top political officials and automotive executives, including GM Chairman and Chief Executive Rick Wagoner.

"Today, I think, unfortunately they weren't quite ready," said Chelsia Lau, chief designer for Ford China. "But I think they will improve and the show will continue to grow in importance."

While the show was the biggest yet in China and is becoming one of the industry's more important, it also reflects the local market's shortcomings.

Many Chinese vehicles still resemble existing models of global automakers. And the interiors on some of the lower-priced offerings are inferior by Western standards.

Yet nearly every car is rolled out in grand style.

FAW Group Corp. played the theme from "Star Wars" as it revealed a series of vehicles Sunday morning. And Great Wall dropped multicolored confetti from the ceiling as its president introduced the automaker's new mini-SUV. Acrobats hung from a dangling square in the ceiling above the Buick stand to draw attention to the new Invicta concept car and the brand's plan to begin selling a new LaCrosse hybrid in China in July.

"The show is getting better and better and so is the overall quality of the vehicles," said Laura Bommarito of Jackson Dawson Communications in Dearborn.

Overall, General Motors Corp. Global Vice President of Design Ed Welburn said it was an enjoyable show.

"I saw a lot of things from the domestic automakers that were playful," he said. "It was fun.

"I did see things you don't see at other shows, and some of it is going to stick."

New, roomier Wuling vehicle

On Sunday, GM's mini-commercial vehicle joint venture unveiled its latest offering in the line of boxy, spartan mini-minivans: a van that's a degree smaller than its predecessors.

The new Wuling Rong Guang is longer than all of its cousins and has more room for hauling people and equipment than its predecessors.

At 13.1 feet long and 5.2 feet wide, the Rong Guang offers "a much more spacious cabin than traditional mini-commercial vehicles."

The SAIC-GM-Wuling venture, known as Wuling, sells more mini-commercial vehicles in China than any of its competitors -- 552,788 last year -- giving it a 43% share of the segment.

The prices for the mini-vehicles start around $4,000 for a bare-bones model. The vehicles are not available in the United States.

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