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As executives from around the world gathered Monday for the opening of the Shanghai auto show, their common refrain was that the Chinese market was becoming a trendsetter. Vehicle sales in China passed those in the United States in the first quarter, as China has weathered the global economic downturn much better, and there are growing signs that China will become the leading market in the long term as well.
‘‘The center of gravity is moving eastwards,’’ said Dieter Zetsche, the chairman of Daimler. ‘‘This has, if anything, only accelerated through the crisis.’’ China’s emphasis on fuel efficiency is partly a reflection of frugality; the average Chinese person’s income is still onesixteenth of the average American’s.
But it is mainly the result of the Chinese government’s strong determination to reduce the country’s dependence on imported oil. Last year, the government cut to 1 percent its tax on ‘‘family vehicles’’ with fuel-sipping engines no larger than 1.6 liters, while raising the levies on cars, minivans and sport utility vehicles with larger engines to as much as 40 percent.
Sales of cars with smaller engines have surged this year in response, while sales of beefier models have grown more slowly and insomecasesweakened.Multinational automakers are responding by transferring their latest fuel-efficiency technology to China, so as to shrink their engines to 1.6 liters or less while providing the best possible performance.
China has had some of the world’s most stringent fuel efficiency standards for each size of vehicle for the past five years. But until the taxes on new vehicles were changed late last year, the Chinese market had been gradually shifting toward slightly larger vehicles — although those vehicles tended to be slightly more efficient than similarly sized vehicles in the United States.
John Parker, Ford’s executive vice president for Asia, the Pacific and Africa, said that Ford would transfer its ‘‘Eco-boost’’ engine efficiency technology, including turbocharging and very precise fuel injection, to its Chinese joint venture and was reconsidering its future vehicle development plans after having concluded that the Chinese government was not going to stop insisting on greater fuel efficiency.
‘‘My overall belief is the trend is for keeps,’’ he said.
General Motors has a 34 percent stake in a Chinese joint venture,Wuling, that already produces small, lightweight minivans that get 43 miles to the gallon in city driving, a fuel efficiency of 5.5 liters per 100 kilometers, although they do not meet U.S. safety and environmental standards.
G.M. wants to increase its stake in the company by buying at least part of the nearly 16 percent stake held by the municipal government of Liuzhou, the city in southernmost China where Wuling is based, Nick Reilly, the president of G.M.’s Asian and Pacific operations, said during an interview Monday.
Mr. Reilly said he wanted the Wuling joint venture to start exporting, although probably not to the United States. Asked whether a deal to increase G.M.’s stake could be completed by the end of this year, Mr. Reilly replied, ‘‘I hope so; I don’t know.’’ Mr. Reilly’s remarks represent the first time a G.M. executive has publicly voiced an interest in an overseas acquisition since the company ran into severe financial difficulties last year and had to seek billions of dollars in help from the U.S.
government. Any acquisition in China by an automaker that is being kept in business by U.S. government loans could prove controversial in Washington.
Beyond stressing fuel efficiency, the Chinese government is putting a heavy emphasis on alternative-fuel vehicles, particularly electric cars with rechargeable batteries. They want the country to become a leader in such technology, and Western auto executives gave China a strong chance of success.
‘‘There’s no question that the government and the companies here are spending huge amounts in this area, so there’s no doubt they are going to be important players,’’ Mr. Reilly said. ‘‘If you look at where batteries are making the fastest progress, it’s China, it’s Korea, it’s where the government is heavily behind it.’’ While the U.S. Congress has sharply increased government financing for battery research, Mr. Reilly said the United States was generally less focused on battery research than China.
Japan, the world’s largest battery producer, is also working hard on electric cars.
Multinationals face increasingly tough competition from Chinese automakers, which are making formidable gains in vehicle quality and technology. Chery displayed three new gasolineelectric hybrid cars and an entirely electric car at the auto show and said it planned to produce all of them soon, although company executives declined to provide precise dates.
Mr. Parker said China had positioned itself well in the competition for alternative- energy vehicles. ‘‘I think there’s a very good chance China will lead that, because they’ve got the need, they’ve got the size of market, they’ve got the resources,’’ he said.
Automakers have long built vehicles to suit American preferences and then marketed those models around the world after recouping the development costs in the U.S. market. Manufacturers sharply increased their development and production of sport utility vehicles and minivans in the 1980s, for example, in large part because those vehicles were subject to less stringent fuel economy regulations in the United States; the automakers then marketed the same models around the globe.
Cup holders were another American innovation that went global: Europeans have long been much less likely to try to eat and drink while driving, but cup holders are now common in cars sold in Europe as well because the holders are viewed as essential for the same cars to be sold in the United States.
In addition to higher fuel economy, the rapidly rising importance of the Chinese market is likely to result in much more comfortable rear seats in cars around the world. That is because even the owners of compact cars in China frequently hire full-time chauffeurs, who cost as little as $440 a month and allow the owner to read or make phone calls in the back seat while in traffic jams.
Cars in China also tend to have thicker pillars descending from the roof between the rear side windows and the back window. This provides greater privacy for rear-seat occupants and also appears likely to be a spreading trend around the world, particularly for compact and smaller midsize cars.
While American consumers are becoming less central to automakers, Japanese consumers are even less important.
Mr. Zetsche said that while Mercedes-Benz had a very large display here, it would not mount an exhibition at the Tokyo motor show this autumn because the market had been steadily shrinking in Japan. Other major automakers from outside Japan have also decided not to attend the Tokyo show.
