Communist leaders are shifting the burden to automakers by imposing mandatory sales targets for electrics, adding to financial pressure on them amid a painful sales slump. Chinese purchases of pure-electric and hybrid sedans and SUVs soared 60% last year to 1.3 million -- half the global total -- but overall auto sales shrank 4.1% to 23.7 million.
At the Shanghai show, which opens to the public Saturday, automakers plan to display dozens of electrics, from luxury SUVs to micro-compacts priced under $10,000. They aim to compete with gasoline-powered models on performance, cost and looks. Automakers are looking to China, their biggest global market, to drive revenue growth at a time when U.S. and European demand is flat or declining. That gives them an incentive to co-operate with Beijing's campaign to promote electrics.
Pressure to shift to electrics is "more an opportunity than a threat" to Chinese automakers, said UBS's Gong. A tariff war with Washington and weakening economic growth made jittery consumers reluctant to commit to big purchases. That skid worsened this year. First-quarter sales shrank 13.7% from a year earlier.Ford relaunched its China operation this year after 2018 sales plunged 37%. The company blamed an aging product lineup.Ford has an electric venture with Zotye Auto. GM and its Chinese partners plan 10 electric models by next year. Mercedes Benz launched the Denza brand with BYD.
In a move to spur competition, Beijing lifted ownership restrictions on electric automakers last year.
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