Germans automakers - Audi, BMW, Mercedes - Porsche - continue to dominate China's 1.8 million million per annum luxury market. They take just under 80% of all premium sales. But Cadillac and Lincoln are gaining traction as fresh alternatives to the ubiquitous German marques. GM produces Cadillac XT5s, ATSs and other sedans at a new billion-dollar plant in Shanghai with its Chinese partner the Shanghai Automotive Industry Corporation. Lincoln imports its full set of offerings from the United States.
Since the 1990s, China has dreamed of exporting cars to America, just as the Koreans and Japanese had done before them. Who could have predicted that the cars would be American and European brands? China exported tens of thousands of Buicks, Volvos and Cadillacs to America in 2016.
Reality is that automakers do not always build where they sell. More accurately, they build where they sell the most. China is now Buick's home, accounting for 80% of Buick's worldwide production and sales. GM started shipping Buick Envisions (and Cadillac CT6 hybrids) to America over the summer. Volvo began exporting S60 sedans to the US in late 2015. Will other automakers follow? Volkswagen would be a prime candidate - should the Germans decide to abandon their tortured affair with U.S production. As the Chinese currency depreciates vis-a-vis the U.S. dollar and margins inside China's auto market get thinner, look for more automakers to (quietly) ship product to America.
China maintained its worldwide leadership in Electric Vehicle and plug-in hybrids, with sales surpassing 500,000 units in 2016. Chinese brands account for 95% of sales. Most products are of the low-range, low-cost (under $25,000 after subsidies), and uncertain reliability ilk.
Arguably China's most dynamic story, China re-affirmed its ambition to lead the world in electric vehicle production. A government-sponsored strategic roadmap published in December, 2016 calls for EVs and plug-in hybrids to account for 40% of new vehicle sales by 2030. That would mean about 15 million vehicles annually. Current EV demand momentum will be tested in 2020 when China transitions away from expensive subsidies in favor of a carbon credits system, similar to California's ZEV program. Meanwhile, four Chinese companies - BYD, NextEV, Faraday Future and Karma Automotive - have set up base camps in California to design and build world-class Tesla fighters and premium electric commercial vehicles.
ref: Article by Michael J Dunn - read more at https://tinyurl.com/mo6lrqy (www.forbes.com).
