At the Shanghai Auto Show, China Slows Its Roll

[Dancers unveil a Luxgen sedan at the Shanghai motor show. Photo: AP]

We attended the previous Shanghai Auto Show just two years ago. But when we arrived at the convention center this week for 2015 press preview, we found the location eerily unfamiliar. That was because, in the intervening time, the world’s most populous city in the world’s largest car market had built a brand new venue. And not just any venue: a cloverleafed cluster with a central atrium the size of Madison Square Garden and one million square meters of exhibition space.

This is how quickly things change in China. And that includes the automotive market. This is our third Chinese motor show, and things are markedly different even from last time, when we announced that the market had matured. We spotted two major trends in the new vehicles introduced at the show, and both indicate Chinese car consumers’ desire to shed their stereotypical image as chrome conscious and smog spewing.

[Photo: Reuters]

The first fad is the literal and figurative contraction in the ultra-luxury market. With a relative slowdown in urbanization, and thus the building and real estate sectors — the source of financial windfalls for 80% of China’s high net worth individuals — cash flow is down. Bentley executive Kevin Rose told us that this year’s sales figures for high end cars were not only missing projections of double-digit growth, but were actually expected to dip by about 25%. Now, these high-end customers, we were told by Volvo CEO Hakan Samuelsson, are looking for “more modest luxury. Not something that is simply showing off, but something that is aligned with their values.” (Whatever those are.)

Perhaps this downturn explains Maybach’s local strategy. In 2013, well after the brand had died everywhere else in the world, it was still peddling its profligate 62S luxo-barge in Shanghai. But at the display this year, the featured vehicle was the “entry level” Mercedes-Benz Maybach S400 sedan, which is like the twin-turbo V-12 S600, but with half the engine missing. This kind of downsizing ruled at McLaren as well. While they’d just shown an “entry-level” $180,000 sports car, the 570S in New York, they unveiled the even more “discount” $165,000 540C in China.

Though it’s an, ahem, stretch, we even might be able to make a case for inclusion in this shrinking market of the Aston Martin Lagonda. Shown in Shanghai to accompany an announcement of its planned distribution in China, the bespoke $500,000 sedan is neither subtle nor downmarket. But its projected sales numbers in China are very modest, and thus very realistic. “Remember,” Aston’s head of Design Marek Reichman told us on their stand, “we’re talking about sending just a very small number of cars here. We’re only selling 200 total. Globally.”

The second trend was in electric powered luxury SUVs, which were everywhere in evidence. The reason behind this was twofold. Bentley’s Kevin Rose told us that younger and more cautious and image conscious luxury buyers were moving away from big flashy sedans and toward more restrained crossovers. And Lars Danielson, Volvo’s Senior Vice President of the Asia Region, explained to us that there was “strong support and subsidies, nationally and locally” for consumers to purchase EVs.