Beijing show opens to uncertainty

Visitors inspect a BMW i4 concept car at the Beijing autoshow, a rare industry event held in person during the pandemic, which fewer people attended and where new models were scant. (Reuters)
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Updated 27 September 2020

Beijing show opens to uncertainty

  • World’s biggest car market has been hit by lockdowns that froze economic activity — but some signs of hope

BEIJING: China’s auto market has rebounded smartly from the COVID-19 crash in recent months, especially for high-end cars, but questions about the durability of that recovery hung over the Beijing autoshow that started on Saturday.

A rare industry event being held in person during the pandemic, the show marks a triumph for the world’s biggest car market, pummelled from late last year as lockdowns froze economic activity in the country where the disease erupted.

However, this show will be a far cry from the usual ebullience as fewer attend, new models are scant and prospects remain uncertain.

Among the bright spots; the Chinese market’s sharp bounce since April, strong demand for midsize to large luxury vehicles and a flood of interest — and investment — in electric vehicles.

China’s auto sales rose 11.6 percent in August from a year earlier, the fifth straight rise after plunging during the lockdown. When almost all residents were told to stay home in February, sales collapsed a record 79 percent to their lowest since 2005.

Guangzhou-based GAC, which has partnerships with Toyota Motor and Honda Motor, expects sales to grow for the full year, general manager Feng Xingya said on the sidelines of the show, formally the Beijing International Automotive Exhibition 2020.

Germany’s BMW expects “single digit growth” in China this year, said Jochen Goller, head of BMW China.

“We were heavily affected during quarter one of course, and massively in China,” with a 30 percent on-year sales drop, Goller said. But the second quarter saw a 17 percent rebound and this quarter “is running really well.”

“You can say confidence is back,” Goller said.

China’s typically busy car-buying season, “Golden September, Silver October,” is off to a good start, according to preliminary data, with passenger car sales up 12 percent in the first 20 days of September.

The rebound means this year’s sales will fall less than 10 percent, the China Association of Automo- bile Manufacturers estimates, better than its May forecast of a 15 to 25 percent decline.

Much of the upturn is driven by sales of larger passenger cars by makers such as Daimler and BMW, boosted by new models, automakers’ discounts and a broader recovery in the world’s second-largest economy.

Premium vehicles accounted for a record 15 percent of the Chinese market in August, up from around 10 percent for all of last year, said the China Passenger Car Association.

Electric vehicles are also providing a buzz to the Beijing show, as a boom in Tesla shares has propelled interest in China. EV startups like Nio, Xpeng, Li Auto and WM Motor have together raised more than $8 billion this year.

But the recent improvement reflects Chinese carmakers making earlier model launches as they could not wait for the usual hype from the delayed autoshow before going to market. That suggests a more limited upside to the current sales rise.

“This year’s auto sales are very different from previous years,” said senior LMC Automotive analyst Alan Kang. “Many cars were sold during summer because customers delayed purchases after the lockdown.”

Sales of larger sedans and sport-utility vehicles have returned to last year’s levels, but competition among mass-market brands is intensifying, said Yale Zhang, head of Shanghai-based consultancy AutoForesight.

That is a key battleground for international and domestic brands including Volkswagen, Toyota, and Geely. Still, he said, “Sales performance in these two months will give us a clue about what will happen next.”


Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

Updated 23 October 2020

Nvidia deal for Arm will drive computing power growth, says SoftBank’s CEO

  • Saudi Arabia's Public Investment Fund (PIF) is an anchor investor in the $100 billion Vision Fund

TOKYO/DUBAI: SoftBank Group Corp. CEO Masayoshi Son said on Thursday the sale of chip designer Arm to Nvidia Corp. will drive growth in computing power, in his first public comments since the $40 billion deal was announced in September.
Son made the comments at a virtual summit about artificial intelligence hosted by Saudi Arabia, an anchor investor in the $100 billion Vision Fund, at which he reiterated his belief that AI would transform society.
The Nvidia deal, part of a series of asset sales by Son, whose group has been shaken by soured investments and the COVID-19 pandemic, has raised concerns it will threaten Arm’s role as a neutral supplier in the industry.
Son is set to speak next week with Nvidia CEO Jensen Huang at SoftBank World, the group’s annual event for customers and suppliers that is being retooled as it focuses on investing.
SoftBank’s growing cash pile is driving speculation about future investment plans, with the Vision Fund targeting external funding for a blank-check company, a source said, in a sign the group is regaining its mojo.
“I am a risk taker,” Son said on Thursday.
Rajeev Misra, CEO of SoftBank Investment Advisers which oversees the Vision Fund, said the market share gained by online commerce companies in the last six to eight months is more than what they gained in the previous four years put together.
“COVID has accelerated the acceleration of AI even further,” Misra told the same conference, adding in the 105 companies Vision Fund 1 and 2 have invested in, artificial intelligence is the core of their businesses.