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Beijing Motor Show 2018 - Automakers unveil raft of models

25 April 2018 Nitin Budhiraja

The Beijing Motor Show kicked off today (25 April) with global automakers showcasing their new product offerings, and Nissan and Audi taking the opportunity to unveil new strategies for the world's largest automotive market.

IHS Markit perspective
  • Implications: New energy vehicle (NEV) models take centre stage at the 2018 Beijing Motor Show as many local and global automakers expand model line-ups in an effort to grow in China.
  • Outlook: The NEV segment is witnessing strong growth in China, although the volume of sales in this segment remains a small fraction (3%) of sales of the ICE segment. According to IHS Markit's alternative propulsion forecast, the annual production volume of NEVs in China will reach 2.44 million units by 2020 and 5.65 million units by 2025.

Japanese automaker Nissan has introduced the Sylphy zero-emission electric vehicle (EV), IMx Kuro, Leaf, Venucia X-concept, and T90 at the Beijing Motor Show. The recently launched Nissan Terra sport utility vehicle (SUV) is also on display. The Sylphy EV will be available for sale in China by the end of this year and is Nissan's first mass-production EV model in Nissan. It is equipped with advanced safety features such as lane departure warning, intelligent emergency braking, rear cross traffic alert, and blind spot warning. The Sylphy shares its platform with the Nissan Leaf and has a driving range of 338 kilometres. Nissan's chief performance officer and chairman of the management committee for China, Jose Munoz, said, "The new Sylphy Zero Emission will be Nissan's first mass-production electric vehicle for the China market and one of the 20 electrified models that we plan to introduce over the next five years." Munoz added that Nissan's ambition is to become China's EV leader by delivering more than 20 electrified models over the next five years across the Nissan, Venucia, Infiniti, and Dongfeng automotive brands. Nissan also showcased its e-Power electric powertrain technology, which helps in reducing carbon-dioxide emissions.

German premium carmaker Audi has unveiled the new Q5L, which will be available for sale in China by the summer of 2018, according to News18. It is a longer version of the existing SUV and is targeted specifically at Chinese customers. The vehicle will be available in five trim options Vogue, Lifestyle, Design, Sport, and Sport plus depending upon the engine and these will differ in the interiors and exteriors. The vehicle is powered by a turbocharged 2.0-litre gasoline (petrol) engine with an output of 190 hp (140 kW) or 252 hp (185 kW) and will be produced at FAW-Volkswagen's Changchun plant. According to a Reuters report, Audi plans to double its production in China with local partner FAW Group within the next five years. CEO Rupert Stadler said that Audi aims to offer 10 new SUVs in China by 2022, and that by 2025 it expects 30% of its sales in the market to be from EVs . Earlier this month, Audi announced plans to sell 1.2 million vehicles in China by 2023.

Toyota has unveiled the plug-in hybrid electric vehicle (PHEV) versions of the Corolla and Levin, with their production in China to start in 2019. The carmaker announced its plan to start selling an EV model based on its "C-HR"/"IZOA" compact SUV in 2020. Toyota also plans to introduce 10 new electrified vehicles in China by the end of 2020. Toyota's senior managing officer and CEO for China, Kazuhiro Kobayashi, said, "We are steadily and confidently advancing all aspects of our environmental strategy in China, the world's most-advanced country in electrification."

Toyota's premium brand Lexus is showcasing the new ES sedan. The new ES is 2.6 inches longer, 1.9 inches wider, and 2 inches lower than its predecessor and has upgraded interiors and exteriors. The ES 300h is equipped with the fourth-generation Hybrid Drive System that couples a 2.5-litre gasoline engine, a more power-dense electric motor, and a self-charging hybrid system. The vehicle has an output of 205 hp and a mileage of 40 mpg in combined driving mode.

Subaru is showcasing the Chinese specification of the new Forrester at the Beijing Motor show. The vehicle is a PHEV model and this is the first time Subaru has introduced this type of vehicle for China.

Honda has unveiled its Philosophy EV concept, which is designed specifically for the Chinese market in partnership with Guangyi Honda Automobile. The model will be available for sale in China by the end of 2018. Honda is also showcasing the Accord Hybrid, which it plans to launch in China in the second half of this year. The Inspire concept is also on display at the show. Further, the carmaker has announced plans to launch over 20 new energy vehicle (NEV) models in China by 2025.

Ford, under its ambitious plan to launch 50 new vehicles by 2025, has introduced the Mondeo Energi PHEV and the Ford Ranger Wildtrak at the Beijing auto show, along with displaying the new Focus model, which it unveiled in China earlier this month. On the eve of the start of the Beijing auto show, Ford announced that with its Chinese partners it will establish a new single distribution operation for the market intended to "significantly improve customer experience, brand consistency and efficiency".

Pininfarina and Hybrid Kinetic Group have held world premieres for two of their new models, the H500 sedan and the 4-seater K350 SUV, which are showcased along with the HK Gran Turismo. All the three models can achieve a top speed of 250 kilometres per hour (kph) and can accelerate from 0 to 100 kph in 4.5 seconds (sedan) and 4.7 seconds (SUV).

Outlook and implications

The 2018 Beijing Motor Show underlines (if needed) the importance of the Chinese market to the majority of global automakers. Nissan and Audi have used the event to highlight their plans to grow in the market, but as growth rates slow, competition increases and, therefore, there will be some winners and some losers in the fight to gain or retain market share.

Many of the new models on show are targeted at China's new energy vehicle (NEV) segment, which in China is defined to include pure battery EVs, PHEVs, and fuel-cell vehicles, as these powertrain options hold the key to operational success for many organisations because of China's quota legislation. The quota policy announced by the Chinese government in September 2017 stipulates OEMs will be obliged to meet an NEV quota of 10% of total vehicle sales from 2019, rising to 12% in 2020.

The NEV segment is witnessing strong growth in China, although the volume of sales in this segment remains a small fraction (3%) of sales in the ICE segment. The NEV segment witnessed sales of 777,000 units in 2017, marking a 53.3% increase, while production hit 794,000 units, up 53.8%. According to IHS Markit's alternative propulsion forecast, annual production volume of NEVs in China will reach 2.44 million units in 2020 and 5.65 million units by 2025.

IHS Markit forecasts Nissan will be producing 10 NEV models in China by 2023, with a total production volume of 133,500 units. These models will include two C-segment and two D-segment sedans, three C-segment and one D-segment SUV, and a B-segment and a D-segment multipurpose vehicle. 

According to IHS Markit's light-vehicle production data, Audi produced five models in China in 2017, with total production of 552,500 units. We forecast that, by 2023, Audi will produce 13 models in China, with the total production volume increasing 18% from that of 2017 to 651,500 units. Audi will launch production of the Q2, a C-segment SUV based on the MQB A/B platform, in China in 2018. It will be manufactured at its Foshan plant, with the production volume estimated at around 11,200 units in 2018, followed by 26,000 units in 2019. Production of the C-CUV e-tron will start in 2021. Another MQB A/B platform-based C-segment SUV, the Q4, will start production at the Tianjin plant in 2020, with volumes estimated to be around 4,000 units in 2020 and 22,000 units in 2021. Further on, Audi will launch production of two E-segment SUVs at its Shanghai III plant. The e-tron based on the MLB B/C platform will start production in 2022, with the volume estimated at 12,200 units in 2022 and 15,500 units in 2023 and production of the Q7, based on PPC/PPE platform, will start in 2023, with volumes estimated at 23,400 units in 2023 and 40,100 units in 2024.



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