China's car buyers seek more room, comfort; boost for 'minivans'

Wed May 4, 2016 9:23pm EDT
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By Norihiko Shirouzu

BEIJING (Reuters) - Even as Chinese car buyers feed a boom in crossovers and sport utility vehicles (SUVs), automakers are looking ahead to the likely 'next big thing' and reckon affordable people-carriers, or multi-purpose vehicles (MPVs), could be it.

Shifts towards electric cars in many cities, potential breakthroughs in autonomous, self-driving technology and lifestyle changes with the relaxation of China's one-child policy pose challenges for product planners in the world's largest autos market.

In the near-term, some predict car buyers will want roomier, more comfortable interior space. Further ahead, others see self-driving cars and electric propulsion leading to radically new body styles with even more space and comfort in cars.

Chinese tend to live near their parents, and the changes to the one-child policy are expected to make family units larger, Hiroji Onishi, head of Toyota Motor's (7203.T: Quote) China operations, said on the sidelines of the Beijing auto show, which ended on Wednesday.

"We think MPVs have good prospects in China. Given those changing life-stage needs, we think what's going to be popular are smaller, more affordable MPVs like the (Toyota) Noah Voxy, a compact minivan which we market in Japan," he said.

Developers at the Japanese automaker say sales of the Alphard, a boxy, but premium-level, minivan brimming with gadgets and business-class-like airline seats, suggest an emerging appetite for a spacious, upscale people-mover. Imported from Japan, the model starts at around 759,000 yuan ($117,000).

Toyota officials and dealers say the van's interior comfort offers a more subtle way for China's rich to signal their wealth in a climate where overt excess is frowned upon. And in China, trends that catch on at the premium end traditionally spread quickly through the rest of the market.

Rising demand for MPVs contributed to an 8.8 percent increase in overall vehicle sales in March, according to the China Association of Automobile Manufacturers (CAAM).   Continued...

Visitors walk around a Toyota Alphard presented during the Auto China 2016 auto show in Beijing, China May 4, 2016. REUTERS/Jason Lee