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Automaker CEOs Court Customers in Shanghai Instead of New York

The newly released Volkswagen AG Beetle is displayed at the Auto Shanghai 2011 car show in Shanghai, China, on Wednesday, April 20, 2011. Auto Shanghai 2011 takes place April 21 - 28 at the Shanghai New International Expo Center. Photographer: Qilai Shen/Bloomberg
The newly released Volkswagen AG Beetle is displayed at the Auto Shanghai 2011 car show in Shanghai, China, on Wednesday, April 20, 2011. Auto Shanghai 2011 takes place April 21 - 28 at the Shanghai New International Expo Center. Photographer: Qilai Shen/Bloomberg

April 20 (Bloomberg) -- To see how Shanghai’s auto show has grown with the nation’s now world-leading vehicle market, just watch the bosses.

While General Motors Co. Chief Executive Officer Dan Akerson spoke in New York yesterday on the eve of that city’s international auto show, his peers were on the other side of the world. Volkswagen AG’s Martin Winterkorn, Toyota Motor Corp.’s Akio Toyoda, and Carlos Ghosn, who runs both Renault SA and Nissan Motor Co., all went to the Shanghai show. Akerson visited China in February.

The choices made by the chief executives reflect the growing significance of the world’s most populous nation. With about 17.2 million vehicles sold last year, China is about 50 percent bigger than the U.S. market, even while car ownership is 14 times more common in the U.S. than in China.

“That’s it, isn’t it: Where are the CEOs?” said Michael Dunne, president of Dunne & Co. in Hong Kong. “People know that China is the world’s biggest market, but now it’s starting to sink in.”

Jim Farley, Ford Motor Co.’s marketing chief, called this year’s Shanghai event “the most important auto show I’ve ever been to in my career.” China’s rise on the global auto scene will rank with the electrification of the automobile among the career highlights he said he hopes to be able to tell his grandchildren about some day.

Ford CEO Alan Mulally isn’t scheduled to attend either show.

Beetle Reveal

Volkswagen revealed the redesign of its iconic Beetle in Shanghai, New York and Berlin, and Winterkorn was present for the ceremony in China.

The world’s most profitable automaker in 2010 sent four executive board members to the Shanghai show and none to New York, said Peter Schwarzenbauer, sales chief for the automaker’s Audi AG unit.

“We’re concentrating on Shanghai,” he said. “The Q3 SUV is premiered to the world here -- that’s where we should be too.”

Volvo Cars CEO Stefan Jacoby said in an interview in Shanghai that the growth of China’s passenger-car market was inconceivable a decade ago.

“I remember times when I worked for VW -- and had been in charge of the Asia Pacific and China business -- that we could not imagine that the market would have the size of the German car market: 3 to 3.5 million,” he said. “Today it’s 13 million” passenger cars, and more than 17 million including commercial vehicles.

China’s Zhejiang Geely Holding Group Co. bought Volvo Cars from Ford in August.

‘More Popular’

“The Shanghai show is getting bigger and more and more popular each year,” said Chen Hong, president of SAIC Motor Corp., which has partnerships with GM and VW that are the nation’s top manufacturers. “This shows the fast expansion and development of the China car market.”

While vehicle sales growth slowed in China in February and March and the government has sought to discourage “lavish lifestyles,” the popularity of luxury vehicles has continued.

Dieter Zetsche, CEO of Daimler AG, which makes Mercedes-Benz and Maybach cars, attended the show.

“Top management of a lot of major automakers are here,” said Klaus Maier, president and chief executive officer of Mercedes-Benz’s business in China. “It is getting very competitive” to get space for advertisement in newspapers such as China Daily, in which the German brand ran a glossy insert.

Toyota’s Toyoda hadn’t committed to come to Shanghai in advance and eventually decided to attend. He said he appreciated the “support and encouragement of everyone here in China,” and that attending the show is fundamental to his role as CEO.

“I feel it is my mission to work to provide ever-better cars to people around the world,” Toyoda said. “On this belief, I made this trip to China.”

To contact Bloomberg News staff for this story: Liza Lin in Shanghai at llin15@bloomberg.net

To contact the editor responsible for this story: Kae Inoue at kinoue@bloomberg.net

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