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How Chinese drivers will influence your next car

GM likely would have discontinued the Buick brand if not for its success in China.
GM likely would have discontinued the Buick brand if not for its success in China.Jason Lee / Reuters

At first glance, it might look like a conventional BMW 3-Series sedan, but a closer inspection reveals it’s been stretched 11 centimeters -- about 4 inches for metrically challenged Americans -- almost all of that going to rear-seat occupants.

For now, the BMW 335Li, like the long-wheelbase Infiniti M35hL and other “stretch” models, are targeted specifically for China, where a sizable number of car buyers prefer to be chauffeured, riding in the back seat.  But going forward, many manufacturers say, the products they are now designing for China will have broader applications in other markets.

“Automakers like to follow the money,” said Joe Hinrichs, president of Asia, Pacific and African operations at Ford.  And more and more of their revenues are being derived from China -- now the world’s largest national market.  Barely a decade ago, the region he represents accounted for barely a sixth of global auto sales.  It’s now a third and will soon generate half. China alone is forecast to see auto sales rise to 30 million units by 2020, 80 percent above the previous U.S. record.

“So if two of the largest markets in the world (when India is included) will be in Asia, you can understand how much those markets will play in the development of our next-generation vehicles," Hinrichs said in a conversation at the Beijing Motor Show.

One already sees the Chinese touch at Buick.  The century-old brand was rapidly fading away until General Motors began selling them in China a decade ago.  In fact, GM design chief Ed Welburn has acknowledged that were it not for strong Chinese demand, Buick likely would have been abandoned with four of the company’s other brands during its 2009 bankruptcy.

Instead, GM’s latest products clearly reflect the desire by China’s up-market buyers for more spacious and elegant vehicles.  And ironically, models like the LaCrosse are clicking with U.S. consumers. Buick is now one of the fastest-growing brands in the U.S.

Automakers have come to embrace globalization to varying degrees.  It is a key attribute for Ford, where CEO Alan Mulally is pressing his One Ford strategy, with the company migrating to platforms that can be shared worldwide with relatively little change.  The new Ford Fusion is nearly identical to Europe’s new Mondeo, and the compact Escape crossover is the same as the new Kuga on display at this week’s Beijing show.

Ford is even migrating to a more global Mustang, which reportedly will share some of the underlying components -- and design features -- of the popular Evos concept Ford revealed at last autumn’s Frankfurt Motor Show. 

Of course, the challenge is making sure buyers in one market don’t feel they’re being slighted by another.  The new pony car “will have to look and feel like a Mustang,” hinted Ford senior designer Martin Smith, who like other executives is otherwise tight-lipped about the next Mustang program.

Industry officials stress that no single market will dominate automotive design, and that American and European consumers will continue to be probed and polled by product planners.  “But you don’t design a car today without heavily considering the Chinese market," said Andy Palmer, Nissan Motor Co.’s executive vice president.

The influence of China could be subtle and actually quite welcome in the U.S., suggested Palmer, who runs Nissan’s Infiniti division. He said the automotive tastes of Chinese motorists are actually more in line with the U.S. than are those of European auto buyers, who prefer small, smaller and smallest products, with a small majority now powered by diesels.

Palmer believes that, like Buick, the Infiniti brand could benefit from this global shift in the automotive industry.  The brand has long been an afterthought in the luxury segment, but it is shifting strategy.  Instead of trying to directly compete with European leaders like BMW and Mercedes-Benz, Infiniti’s goal is to now “build a reputation for cool Asian luxury,” with the emphasis on China, according to Palmer.

Notably, the Nissan division is about to move its brand headquarters to Hong Kong.  Just five years ago, it might have been more likely to move to the U.S., long the world’s biggest luxury market. 

China could have an even bigger impact on global product development if government leaders maintain their plans to promote electrification, primarily in the form of plug-in hybrids and battery-electric vehicles, added Nissan CEO Carlos Ghosn.

The Nissan executive has been among the most optimistic proponents of battery propulsion, predicting there could be 10 million battery and hybrid electirc vehicles sold annually by 2020.  The Chinese program would itself push 5 million onto the market.

But there’s at least one big difference between China and Western markets.  It’s much more of a command-and-control economy and could mandate battery power even if motorists remain reluctant.  On the other hand, if China takes the lead in electric propulsion that could put it in an even better position to influence what happens in the rest of the world if battery power ultimately does take off.