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Automakers Vie for Market Share in China

The competition is intensifying in China, where automakers are competing for a share of the market in the world's most populous country.  More than 18 million cars were sold in China last year, and that number is expected to double in less than 10 years.

Featuring more than 1,100 flashy, new vehicles, the Beijing Auto Show is now among the largest in the world. Car News web magazine editor Tycho de Feyter says it's an important showcase of China's economic clout.

"The Chinese auto industry really wants to show off.  They want to show what they have. They want to show their new developments. They want to show their new cars. So this is really important," Feyter said.

With annual sales projected to top $30 million by 2020, automakers are increasingly turning to China to drive global revenues. General Motors is opening up 600 new dealerships. And Ford Motors Asia Chief John Hinrichs says construction of two new manufacturing plants will double Ford's production capacity there.

"China is a big part of our growth plan. It is the largest market in the world and a great potential opportunity for Ford to grow our business even further as part of our plan to sell 8 million vehicles annually in 2015 around the world," Hinrichs said.

With a recent Beijing directive to have 5 million hybrid and electric vehicles on the road by 2020, many see China as a lucrative market for green technology.
Among them, Nissan Motors chief executive Carlos Ghosn.

"As leaders of the zero emission and EV [electric] cars in the world, we have to bring our technology and bring our products.  The Chinese want us to put it under a Chinese name.  We selected Venusia, so you're going to see a lot electric cars with Nissan technology coming under the Venusia name," Ghosn said.

Not to be outdone, Europe's largest automaker, Volkswagen, is investing $400 million to build new manufacturing plants in China.  And Daimler CEO Dieter Zetsche says Mercedes Benz is expanding its lineup to target Chinese buyers.

"First of all there is no stronger brand than the Mercedes brand with the three pointed star. Secondly, we're in the middle of our product offensive, that we'll add 10 new vehicles in our portfolio, plus replacing the ones which exist," Zetsche said.  

Despite a slowdown in overall sales from previous years, industry experts say the growing ranks of Chinese millionaires continue to fuel double-digit increases in the sales of sport utility vehicles (SUV's) and luxury automobiles.

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