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Motor city rises in the west

 

Chengdu's renowned leisurely lifestyle is now going increasingly mobile. [Photo/China Daily]

Chengdu's renowned leisurely lifestyle is now going increasingly mobile. [Photo/China Daily]

Capital of Sichuan province is ever more alluring to automakers as 20,000 new cars a month hit the road

For 31-year-old IT engineer Liu Yang, the car has become an inseparable part of his leisure time.

Using the popular smartphone app WeChat, every Thursday he and his friends discuss where they go for the upcoming weekend.

A typical Chengdu resident, Liu enjoys an easygoing and leisurely way of life, which is even easier to realize with the big convenience a car brings.

On a recent weekend, he and his friends drove on the highway more than two hours to the neighboring city Zigong just for a special meal - a local cuisine of rabbits.

Like Liu, many Chengdu residents have become accustomed to the mobile life.

The Chengdu municipal traffic management bureau said that by March this year the city had 2.69 million automobiles on the road. In the past five years, more than 20,000 new cars have been registered every month.

It now ranks among the top five Chinese cities in private car ownership. The buying power of local residents is sometimes surprising.

Yu Ting, a white collar worker in a foreign-invested company in Chengdu, and her husband bought two premium cars in a year - a Mercedes-Benz C-Class wagon and a BMW X1.

Before Yu married, she drove a Mini and her husband had a Volkswagen Polo. When they planned to tie the knot and form a family, they thought they should have a bigger car. So they sold both their cars and bought a Mercedes-Benz.

But just a few months later, Yu found that one car was not enough as her husband had to drive her to work every day. So she bought a BMW X1 and used all of the money they saved.

"If I can't buy the best I want, I'd rather not buy," she said.

The car enthusiast even persuaded some of her friends and colleagues to have a "group buy" at a BMW dealership to get a discount for everyone.

Surging sales

Statistics from an automobile industrial association in Chengdu show that in the first half of this year, more than 140,000 passenger cars were sold in the city, up 19 percent from a year earlier, far higher than the 11.5 percent increase nationwide during the same period.

More than half of the sales were cars between 50,000 yuan ($8,198) and 150,000 yuan, showing that practical, economical cars are still the most popular with the majority of customers.

Yet the more expensive car segment also reported a higher growth rate in the first half of the year compared with the same period of 2013.

Sales of cars priced above 400,000 yuan surged by 86 percent over a year earlier, while sales of cars between 300,000 and 400,000 yuan rose by 71 percent, sales of cars between 250,000 to 300,000 yuan increased by 46 percent and sales of those between 100,000 and 150,000 yuan grew 36 percent.

In contrast, sales of cars priced below 50,000 yuan fell by 53 percent during the period.

Adding more fuel to the robust sales growth is the 17th Chengdu Motor Show running from Friday until Sept 7 at the Century City New International Convention and Exhibition Center in this capital city of Sichuan province.

One of the top four auto shows in the nation, this year's event will fill all nine halls and the outdoor zone at the exhibition center - a record total display area of 150,000 sq m.

According to organizers, 102 auto brands will join the industry gala, which is expected to attract more than 680,000 visitors.

Mercedes-Benz, BMW, Audi, Chang'an Ford, Dongfeng Yueda Kia, Dongfeng Nissan, General Motors, Chevrolet, FAW-Volkswagen and Jaguar Land Rover all have sprawling booths of between 1,500 sq m to 2,400 sq m at the exhibition, signaling the high value they place on Chengdu and the vast western market, organizers said.

Manufacturing hub

Not only the consumer market has heated up with the accelerated economic development in Chengdu. The enormous potential has also attracted increasing overseas investment to the southwestern metropolis, making it one of the manufacturing hubs in China.

One example is the city's Longquan district, 12 km from downtown, and home to the city's largest economic development zone.

With ever-increasing investment from overseas, especially from Germany, the zone's pillar automotive sector delivered 732,000 cars last year, almost double the number a year before, and 90 percent of Sichuan's total output.

With such outstanding performance, the automotive sector contributed more than 40 percent of the total profits in all manufacturing businesses in Chengdu in 2013.

Sichuan almost lost its entire automotive industry when Chongqing became a separate governmental region in 1997 as China's fourth municipality.

Three years later, the province decided to start an economic zone in Chengdu's Longquan district torevitalize the manufacturing industry, particularly the automotive sector.

In 2009, the district welcomed its largest foreign investment as FAW-Volkswagen set up its third vehicle manufacturing plant in China, covering an area of 560,000 sq m, according to Li Hua, deputy director of the zone.

The German joint venture has since invested more than 17 billion yuan in the plant and possibly another 3 billion yuan by the end of the year, Li said.

It is also expected to deliver more than 600,000 vehicles by the end of 2014, he added.

In addition to FAW-Volkswagen, seven other German vehicle and auto parts makers including Bosch have now established plants in the zone.

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