ASIA / PACIFIC
May 1, 2017
THE ASIAN REPORTER n Page 5
China car dilemma: Beijing
wants electric, buyers want SUVs
By Joe McDonald
AP Business Writer
EIJING — Automakers face
a dilemma in China’s huge
but crowded market: Regula-
tors are pushing them to sell electric
cars, but buyers want gas-guzzling
SUVs.
The industry is rattled by Beijing’s
proposal to require that electric cars
make up eight percent of every
brand’s production as soon as next
year. Consumers are steering the
other way: First-quarter SUV sales
soared 21 percent from a year earlier
to 2.4 million, while electric vehicle
purchases sank 4.4 percent to just
55,929.
“It’s tough for someone with an EV
to come and take away market share
from SUVs,” said Ben Cavender of
China Market Research Group.
Last month, the Shanghai auto
show showcased work on electric
models meant to appeal to Chinese
drivers who are wary of the unfamil-
iar technology’s reliability and cost.
The pressure for electrification in
China is an added headache for
automakers at a time when sales
growth is slowing and competition is
heating up in a market they are
counting on to drive global revenue.
Sales growth fell to 1.7 percent in
March from last year’s 15 percent.
SUVs made up 40 percent of sales,
while sedan purchases fell 4.9
percent.
At the Shanghai show, the
industry’s biggest marketing event
this year, almost every global and
Chinese brand displayed at least an
electric concept car, if not a model
ready for sale, alongside its latest
SUVs and sedans.
General Motors Co.’s Buick unit
has announced plans for Chinese
sales of its Velite 5 gasoline-electric
hybrid sedan. Buick also sells a
hybrid LaCrosse in China.
In April, Ford Motor Co. said it
would sell an all-electric SUV and a
plug-in hybrid Mondeo Energi sedan
in China. Ford’s joint venture with
state-owned Changan Automobile
Co. will manufacture the Mondeo.
Ford said by 2025 it plans to offer
electric versions of 70 percent of its
models sold in China.
“We are prioritizing our electrifica-
tion efforts on China to reflect its
importance as a global electrified
vehicle market,” Ford CEO Mark
Fields said in a statement.
NextEV,
a
Shanghai-based
startup, displayed 11 vehicles in
Shanghai from its all-electric NIO
brand. They include the two-door
EP9, a contender for the title of
fastest electric car, with what the
B
NO COKE. A can of Air Koryo cola, left, produced by Air Koryo, North
Korea’s flagship airline that recently introduced its own brand of cola on
flights to and from Beijing, is seen in Pyongyang, North Korea. Coca-Cola
is possibly the world’s most recognizable brand, an almost inescapable
symbol of the global appeal of American-style consumer culture. There
are only two countries in the world where Coke doesn’t officially operate,
and one of them is North Korea. (AP Photo/Wong Maye-E)
Coca-Cola in North Korea?
It’s (usually not) the Real Thing
By Eric Talmadge
The Associated Press
YONGYANG, North Korea — Coca-Cola is
possibly the world’s most recognizable brand, an
almost inescapable symbol of the global appeal of
American-style consumer culture. There are only two
countries in the world where Coke doesn’t officially
operate, and one of them is North Korea.
But even the North is developing quite a taste for cola —
though the iconic red-and-white labelled bottles the cola
comes in likely are not exactly the Real Thing and their
twist tops need a bit more than the usual caution. They
have a tendency to leak or refuse to come off at all.
North Korea and Cuba are the only countries where
Coca-Cola Co. has no operations, said communications
director Ann Moore. Coke doesn’t do business with either
because of sanctions.
That doesn’t stop Coke making its way over the North
Korean border, however.
Coke bottled in China and bearing Chinese labels isn’t
hard to find in North Korea’s relatively affluent capital,
Pyongyang. It is sold in upscale grocery stores that cater
to the capital’s elite and a growing number of middle-class
residents, who are increasingly earning enough hard cash
through entrepreneurial side businesses to purchase
more than bare necessities.
Coke from China can also be quaffed in international
hotels frequented by both locals who can afford their high
prices and foreign tourists and business people, most of
them from China as well. Pepsi sightings are rarer.
The cola served at restaurants and lining the shelves in
stores where more typical North Koreans shop are likely
to be local imitations, though one of the more popular ones
could, from a distance, easily pass as a Coke.
Its 1.25-liter bottle has the same Coke shape, the
Coke-like red-and-white label, the distinctive red cap. But
instead of the usual Chinese phonetic characters for
Coca-Cola, it has “Cocoa-flavored Sweet Soda Drink”
splashed across its label in yellow Korean lettering.
The label also prominently features a bar code and the
universally recognized anti-littering logo of a person
responsibly tossing his trash in a bin. It includes a calorie
count and the address and phone number of the bottler,
the Wonbong Trading Co. in Pyongyang. Such numbers
can only be accessed by North Koreans using the North
Korean phone network.
So no comment there.
How does it taste?
Not bad, it turns out. Good fizz. Indistinguishable
appearance. If you like Coke, it’s a very good facsimile.
Some other similar sodas claiming to be cocoa-flavored
but not aiming to match Coke’s taste do in fact taste like
chocolate.
Back in 2000, when ties between the U.S. and North
Korea were going through something of a thaw, there
were widespread rumors that Coke was on the verge of
officially breaking into the market. Blame North Korea’s
decision to develop nuclear weapons for dooming that
plan.
The locally bottled versions of Coke-like drinks have
filled the vacuum.
Air Koryo, the country’s flagship airline, recently
introduced its own brand of cola on flights to and from
Beijing. That’s not quite as odd as it might sound. Like
many large state-run enterprises, the airline also
operates a fleet of taxis, has at least one gas station in
Pyongyang, and puts its name on other soft drinks in
order to turn a profit.
P
EVs vs. SUVs. A visitor looks at a concept electric car system called the ZOE at the Renault stand
during the Auto Shanghai 2017 show at the National Exhibition and Convention Center in Shanghai,
China. Models on display at the show, the global industry’s biggest marketing event of the year, re-
flect the conflict between Beijing’s ambitions to promote environmentally friendly propulsion and
Chinese consumers’ love of hulking, fuel-hungry SUVs. (AP Photo/Ng Han Guan)
manufacturer says is a top speed of electrics but most sold only a few
hundred vehicles last year. That is
194 mph (310 kph).
Volkswagen AG announced its partly because their vehicles cost up
electric vehicle plans for China and to 350,000 yuan ($50,000), or two to
unveiled an electric concept car. three times the price of equivalent
Honda Motor Co. showed its new gasoline models.
Even Great Wall Motors Ltd.,
NeuV, a futuristic concept car the
company has suggested might get an which became China’s most profit-
electric drivetrain.
able auto brand by making almost
Government planners see electric nothing but SUVs, has unveiled an
vehicles as a sector where China can electric compact sedan, the C30 EV,
lead, and a cabinet technology devel- which looks almost comically small
opment plan issued in 2013 calls for next to the other hulking vehicles. It
two of the top global brands in 2025 to has yet to say when sales will start.
be Chinese.
Some brands promise a range of up
Hence the proposal, released in to 120 miles on one charge. But
September, calling for electric or industry analysts say that is too
gasoline-electric hybrids to make up much money and too short a distance
eight percent of every automaker’s for most drivers, who have few places
output next year. That would rise to to recharge.
10 percent in 2019 and 12 percent in
“The biggest worries for people
2020.
buying an electric car are lack of
Manufacturers failing to meet convenience for charging and the
those targets could buy credits from miserable range most electric cars
companies that produce more have,”
said
Zhang
Xin,
an
electrics, helping to subsidize independent auto industry analyst.
development.
To ease such “range anxiety,” the
People in the industry say manu- cabinet has ordered the state-owned
facturers have warned Beijing those power industry to step up installation
targets are too ambitious. News of charging stations.
reports say regulators might have
Government plans call for China to
agreed to lower or delay them in an have 100,000 public charging
updated plan due out this year, but stations and 800,000 private stations
there has been no official confirma- by next year, up from a total of 50,000
tion.
at the start of 2016. Longer term, the
China’s stand-out EV success so far government wants a network that
is BYD Auto Co. It sells all-electric can support 5 million vehicles by
vehicles to taxi and bus fleets in 2020.
China and abroad and gasoline-
The government also is trying to
electric hybrid SUVs and sedans to nudge buyers toward electrics by
Chinese consumers.
exempting them from sales taxes and
BYD Auto says last year’s sales from license plate fees and lotteries
rose 70 percent over 2015 to 100,183 imposed by Beijing, Shanghai, and
vehicles. That would make it the some other cities to curb congestion.
biggest electric brand for a second
Aside from BYD, Chinese manu-
year, with Tesla Inc. in second place facturers are waiting to see what
at 76,230 vehicles sold.
price regulators set for credits before
Other Chinese brands offer plug-in
Continued on page 9
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