Gas-guzzlers a hit in China
22.04.2008 10:00
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- Source: toledoblade.com
BEIJING - High, wide, and fuel-hungry, the gleaming black Cadillac Escalade on display at the Beijing auto show is an unlikely car for an era of record oil prices. But as U.S. sales of sport utility vehicles tumble, for China's newly prosperous car buyers, bigger is still better. So General Motors Corp. has made the Escalade a star of its auto-show display and is eager to get it on the market here. "If you look at the fastest-growing market segments in China, there are two - SUVs and luxury cars," said Joseph Y.H. Liu, GM China's vice president for sales and marketing. Auto sales in China, especially of luxury vehicles, are booming. The phenomenon is welcome news for automakers seeing little or no growth in the United States, Europe and Japan. They also make fatter profits from sales of high-end vehicles than from economy models. Sales have been boosted by economic growth that has topped 10 percent for five straight years and a surge in real estate and stock prices that created a new crop of Chinese billionaires. Beijing has tried to shield farmers and the urban poor from high oil prices by freezing pump prices for gasoline and diesel, keeping them among the world's lowest. That takes the sting out of filling up a gas guzzler. Gas costs $2.90 a gallon. State oil companies are barred from passing on rising crude costs to consumers, instead covering their losses out of profits from their drilling units. Both foreign and Chinese automakers are using the Beijing show to highlight luxury sedans, muscle cars, and SUVs. The show opens to the public Thursday after a weekend press preview. Daimler AG unveiled a top-of-the-line Mercedes-Benz SUV, the GLK, and Volkswagen AG's luxury Audi unit spotlighted the new Q5 crossover. Infiniti, Nissan Motor Co.'s luxury brand, announced it will launch its EX35 SUV in China this year, adding to its three sedans on sale there.
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