At Shanghai show, automakers can be upbeat

updated 6:44 p.m. ET April 19, 2009

SHANGHAI - International automakers are converging on China’s commercial capital for a show that, once marginal, is now a key showcase — and battleground — for the world’s only major growing car market.

The biennial Shanghai Auto Show, which opens Monday to media and on Wednesday to the public, is expected to feature an unprecedented number of new vehicle launches, reflecting the growing importance of this market for automakers everywhere.

It follows on the heels of Sunday’s Formula One Grand Prix — another Shanghai event symbolizing the city’s obsession with cars.

“The number of new launches, especially from global manufacturers, will set it apart,” says Paul Gao, CFO of Chery Quantum Auto Co., a new unit of Chery Automobile Co. that is developing upscale models for the domestic automaker.

“Many automakers now see the Chinese market as at the forefront,” he said.

Porsche kicked off the show on Sunday night by unveiling the Panamera, the German automaker’s first foray into the luxury sedan segment. Porsche said its decision to reveal the vehicle in China signals the rising importance of the country’s auto market.

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Porsche sales in Asia more than doubled in its 2007-2008 fiscal year to 7,600 vehicles, the company said.

“This is a clear signal that we count on these markets and have full confidence in their future economic potential,” Porsche Chief Executive Wendelin Wiedeking said in a statement.

Like the company’s Cayenne SUV, the new four-door Panamera will be built at Porsches plant in Leipzig, Germany. It will be

entering the market in Europe, South America and parts of Asia in September 2009, in North America and Australia in October, and in China in early 2010.

China, the world’s second-biggest car market, has revived sales after a late-2008 slump with tax cuts and rebates that are pulling small vehicles out of showrooms nearly as fast as companies can make them.

Sales hit monthly record of 1.11 million vehicles in March, exceeding U.S. sales for the third month in a row and up 5 percent from a year earlier.

While the surge to the forefront mainly is a result of deteriorating conditions in the U.S. and elsewhere, the gravitational center of the world auto market clearly has shifted to China and other emerging markets.

The uptick in sales this year caught many automakers off guard, since they had cut production in expectations that the slowdown in sales seen last year would persist in China, Gao says.

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