SHANGHAI -- With the carbon credit program enacted at the start of this year Beijing seeks to expand annual electrified vehicle output in China to 2 million units in 2020 from 1.27 million in 2018.
But for global automakers operating in the country, the top priority is to find out ways to revive weak sales amid the slowing Chinese economy. And the strategy they have adopted is launching more gasoline crossovers and SUVs.
Such a strategy is rational. Demand for crossovers and SUVs is much more resilient than light vehicles in other categories.
In October, overall new light-vehicle sales in China contracted for the 16th straight month, slipping 5.8 percent to below 1.93 million.
But deliveries of crossovers and SUVs, of which nearly all are gasoline products, edged up 0.1 percent to approach 870,000 in the month.
The strategy has also been proved effective at Volkswagen, the largest car brand in the market.
In early 2018, VW brand initiated what it called “the SUV offensive.” Since then, it has rolled out five new locally built crossovers and SUVs -- the Teramont, T-ROC, Tayron, Tharu and T-Cross.
These products have enabled the German brand to outperform the overall market so far this year.
For the first ten months, sales at VW brand only slid 0.9 percent in China where the overall new-car deliveries shrank 11 percent from a year earlier.
And in October, its local sales maintained growth for the second consecutive month, rising 7.5 percent to some 295,000 deliveries after gaining 2.2 percent in September.
VW will put on sale its next compact crossover, the Tacqua, in China in the next few months.
While the German brand is set to further expand its lineup of crossovers and SUVs for China, other global automakers have started mimicking its strategy to speed up introduction of similar products.
A prime example is General Motors.
The Detroit automaker organized a marketing event called “the Buick SUV family night” Wednesday in Guangzhou, two days ahead of the annual auto show in the south China city.
At the event, Buick launched sales of the locally produced Enclave seven-seat SUV and the vehicle’s six-seat version – the Enclave Avenir, along with the redesigned Envision crossover.
At the Guangzhou auto show, Chevrolet will also kick off sales of the seven-seat Blazer, the brand’s first mid-sized SUV for the Chinese market.
Other international brands are following suit.
For example, Kia will launch the latest-generation KX3 and KX5 crossovers and the Sportage SUV at the Guangzhou auto show.
Meanwhile, Toyota Motor Corp. and Honda Motor Co. each plan to unveil a new crossover model – the Toyota Wildlander and the Honda Breeze -- at the event.
It's unclear how long it will take the new-vehicle market in China to return to the growth track.
But the trend is clear that global automaker will unveil droves of new crossovers and SUVs in China, further driving up competition in those burgeoning segments of the market.