BIZCHINA / Analysis
China a rising star on global auto show circuit
By Michael Robinet (China Daily)
Updated: 2007-04-21 12:36
Globalization of the automo
BIZCHINA / Center
Bosch Rexroth revs up capacity
By Zheng Lifei (China Daily)
Updated: 2007-04-06 09:11
SHANGHAI: Bosch Rexroth AG, the world's largest drive and motion control
maker, is aiming for sales growth of more than 30 percent in China this
year by expanding its manufacturing capacity and product portfolio, a
company executive said.
Bosch Rexroth, a wholly owned subsidiary of global auto parts giant Bosch
Group, saw its sales in China surge by 32 percent to hit 2.8 billion yuan
last year, making China its fastest growing market.
"We expect to maintain the rapid momentum in 2007 and continue growing at
a rate that is at least equal to the levels experienced last year," said
Theo Ramhorst, managing director and CEO of Bosch Rexroth China.
Globally, the German firm chalked up sales of more than 4.9 billion euros
last year, up 7.1 percent over 2005.
Bosch Rexroth, Ramhorst said, is planning to invest further in China,
which is its third-largest single market after its home turf Germany and
the United States.
"We are committed to investing further in the country to expand our
capacity," the CEO said, without giving specific figures.
Some of Bosch Rexroth's products sold in China are currently imported due
to its limited local manufacturing capacity, Ramhorst said.
The drive and control company last year poured about 290 million yuan
into China, which was mainly used to expand its manufacturing facilities
in Beijing and Changzhou in East China's Jiangsu Province.
The company plans to introduce and expand its product portfolios,
particularly in the wind power sector, to drive its business growth in
China, Ramhorst said.
(For more biz stories, please visit Industry Updates)
Learn Chinese, Chinese School
tive industry has driven several trends. Aside
from the most obvious of high volume vehicle nameplates sold in virtually
every country (Honda Civics or the BMW 5 Series) and the emergence of new
manufacturers (Chery or Tata), another less obvious effect is the rise of
new auto shows on the annual circuit. The auto industry has changed
forever and will continue to do so.
Several factors are affecting how today's auto shows are conducted. These
include interaction with the media, how vehicle introductions are
scheduled, the public attending the show after the press days and the
placement on the calendar versus other shows. The staging of an auto show
is essentially an industry unto itself, with strong competition between
venues for key global vehicle introductions and investment in new
displays by exhibitors.
In today's environment of emerging vehicle sales centers (China, India,
Russia and others), the auto show circuit can be generally classified
into three categories. Classifying shows involves considering the number
of new vehicle introductions, the global importance of these, if the show
is the "home" show of a vehicle manufacturer and the size and extent of
the exhibits.
Until the early 1990s, the global auto show circuit essentially
encompassed Paris or Frankfurt (these venues alternate every year) each
autumn, Geneva in late winter, Tokyo every other autumn and Detroit right
after the Christmas/New Year holiday. These would still be considered the
main global shows on the calendar though a new cluster of global venues
have risen in stature to steal some influence.
Emerging markets
The emergence of China, India and Russia as viable sales markets has
driven global vehicle makers to shift marketing capital and resources to
expanding shows such as Shanghai, Beijing, Moscow, New Delhi, Seoul and
Bangkok. This new group of shows on the global scene is driving greater
focus away from the traditional global shows as Western vehicle makers
seek to shift sales to emerging markets and diversify their sales bases.
New original equipment manufacturers (OEMs) in these regions are seeking
to make an impression within their market but also on the global scene.
Examples of vehicle makers looking to make more than a regional impact
include Chery, Geely, Tata and AvtoVaz.
A third level of shows is growing in importance. These include
super-regional shows that are attempting to divert investment from the
traditional global shows or the new shows in emerging regions. Within
North America these include Toronto, Los Angeles, Chicago and New York
giving Detroit greater competition. In Europe, new venues such as
Budapest underscore the shift of influence from traditional super-region
shows such as London, Madrid or Turin. This trend will emerge in Asia it
is only a matter of time as Asian markets outside of Japan grow.
Each auto show searches for character some trait that separates it as a
venue from other shows. After all, auto show organizers and exhibitors
are not trying to impress the ticket-buying public, which covers the
vehicle makers' exhibit costs. More important is influencing the global
media that are the first to attend. With this in mind, each show is
focused on attracting as much investment and attention as possible, given
the budgets of increasingly pressured vehicle manufacturers.
Showstoppers
Several venues have raised the bar high for several years. Possibly the
best show globally is Geneva, Switzerland. Though it is focused mainly on
vehicles developed by the European companies, it is small, intimate and
focused on the task at hand showing concept vehicles and new vehicle
introductions. Not every vehicle in a manufacturer's fleet will be on
show only the key offerings. Media and public alike can walk from one end
of the Geneva show to the other in less than five minutes, and it's all
under one roof. Add the mountains and Swiss culinary delights and this is
at the top of most regular auto show attendees' lists.
Smaller and focused would be an accurate description of the biennial
Tokyo show. Though not under one roof, there is no need to step outside
into the elements as its three main halls are interconnected. The
Japanese OEMs use the Tokyo venue as their concept vehicle and technology
platform no other show has such a high concentration of concept cars.
Like Geneva, even the most skeptical auto show attendee values the Tokyo
show.
The largest single venue is Frankfurt. Alternating with Paris every
autumn, the IAA in Frankfurt, as it is better known, houses not only
vehicle manufacturers' exhibits, but also those of the top component
suppliers, sprawled over eight separate halls. Frankfurt's importance is
so crucial that Mercedes has a permanent building on the grounds and BMW
erects its own every show. In off years, Paris takes the baton. Though
not as expansive as Frankfurt, Paris is also spread out over several
buildings as both Renault and PSA Peugeot Citroen use the venue as their
biennial showcase.
The annual Detroit show has risen in stature over the years mainly as
manufacturers from outside the US look to make an impression in the
crowded but lucrative US market. Detroit's organizers (known as the
NAIAS) openly admit that a major focus is to expand the venue as space
under one roof is at a premium at the riverfront venue. This will take
several years to remedy.
In the end, each auto show has it own character and idiosyncrasies. A
successful show is one which has ample, reasonably priced hotels, easy
access to the city and airport, a venue that can house vehicle makers
under one roof and organizers that aren't complacent who invest in the
staging of the show. Placing the needs of the global media over that of
the public is key.
Why all the focus on impressing the global media? The auto industry has
transformed from a regional enterprise to a worldwide one.
The launch of the new BMW 3 Series sedan was on the Internet seconds
after the cloth was pulled from its bonnet. Media outlets stream these
scenes to interested buyers globally.
With more eyes on the introduction of a new model comes greater media
attention. In essence, the most cost-effective way to gain attention for
a new vehicle is to have the global media prioritize it in their
coverage. The cost of buying ad space in every global daily paper, weekly
trade journal or monthly car magazine is prohibitive. Better to garner
the media's attention and have your vehicle front and center a more cost
effective solution for all involved.
The size of their internal markets and growing domestic manufacturers
will give these venues an advantage for years to come. The secret is to
always improve and never stand still.
The author is Vice-President of Global Vehicle Forecasts for US
automotive consultancy CSM Worldwide.
(For more biz stories, please visit Industry Updates)
Learn Chinese, Chinesepod
