This luxury car can leap potholes and road spikes - but it's not a Ferrari

The Age

05-05-2025

You wouldn't suspect it from the crowds that vied for snaps with Porsche's line-up of new and classic models at Shanghai's auto show, but the German luxury carmaker has fallen on tough times in China.
Chinese buyers have dimmed on the brand, with its sales plunging 42 per cent in the first quarter this year, accelerating a precipitous slide throughout 2024, as the country's economic downturn bites into the wallets of the luxury-loving classes.
But the real culprit is the relentless march of China's electric vehicle industry, which, having conquered domestic demand for cheap, accessible cars, is making inroads into the high-end market where European brands once seemed unassailable.
As hundreds of thousands of people traversed the sprawling, multi-level display floors showcasing more than 70 Chinese and international automotive brands at the fortnight-long Shanghai expo, there was plenty of anecdotal evidence of the challenges facing the legacy manufacturers.
When it comes to price, technological prowess, and even aesthetics, buyers are increasingly turning to homegrown Chinese brands.
Next door to Porsche on the showroom floor was the Huawei-backed AITO brand, one of the Chinese companies eating the lunch of the foreign automakers.
'We would have considered a Porsche if we continued with an internal combustion engine, but it doesn't actually make much sense. We want to experience more high-tech things,' Song Junqun, 41, a worker in the semiconductor industry, said.
Song and his wife, Yu Qiong, were eyeing off the AITO's M9 luxury SUV, which pulled a sizeable crowd as people clambered into the leather-clad interior to test the software embedded across multiple flat-screens.
Huawei is viewed with suspicion in the West, particularly in Australia, where it was banned from the 5G network rollout. But in China, where it is the leading smartphone company, its pivot into the auto sector is paying off as customers seek out its cutting-edge smart driving systems.
The M9 is billed as a direct rival to the Mercedes-Benz GLS, the car Song's family currently drives. But at about 500,000 yuan ($107,000), it's about half the cost. They considered Mercedes' latest EV models, and quickly passed them over.
'We made many comparisons and found that Chinese cars definitely perform better in the field of intelligent driving,' Song said.
Amid the bright lights and cacophony of the Shanghai expo, one of the largest international car shows, it's almost unfathomable to think that 40 years ago, China didn't have a car manufacturing industry.
Today, China is the world's biggest carmaker and exporter. Its booming EV industry is oversaturated with brands and models, sparking warnings from experts of a reckoning on the horizon.
BYD, which made its first fully electric car in 2009, is now China's best-selling car brand. In 2024, it overtook Tesla as the world's top EV seller, with sales of over 4.27 million fully electric and hybrid vehicles, more than double its rival's.
Despite BYD dominance, more than 130 Chinese EV brands are competing for the nation's buyers. The auto expo, which alternates between Shanghai and Beijing, has become a glitzy testament to the cut-price showdown in the overcrowded sector.
Bolstered by generous Chinese state subsidies, most of the EV brands are loss-making ventures. BYD, Li Auto and the Seres Group (which produces the AITO brand) are among the few turning a profit.
But the furious competition is driving an innovation race that spans the incredible to the absurd.
At the BYD showroom, sales reps demonstrated its five-minute fast-charging technology. Another brand deployed a violin player to set the tune as its top model SUV 'danced' on its suspension.
Other brands boasted rotating seats that allow back-seat passengers to face each other and play cards or, as one ill-advised promotional video shows, eat hotpot on the road. Another spruiked its 'pet-mode' customisation features.
Under its luxury spin-off brand, Yangwang, BYD showcased its ultra-sleek U9 electric super-coupe – in red, of course. With wing-like doors and the ability to hit 100km/hr in under two seconds, it also has a 'leap mode' designed to jump potholes and, for unexplained reasons, road spikes.
It's China's most expensive vehicle, priced at 1.68 million yuan ($360,000), pitched at the country's elite with a penchant for Ferraris or Lamborghinis. Just 160 have been sold so far in China, and while it is not widely available overseas, the vice president of the United Arab Emirates has purchased two, or so a sales rep told curious onlookers.
While China's impressive technological strides in electrification should be applauded, the glut of brands heralds a warning for Australia, Australian Automotive Dealer Association chief executive James Voortman says.
'The Chinese brands are moving at a pace we've never seen before in this industry. But it is also a little bit disconcerting because it does have a feel that there are too many of them. There's a bit of a bubble,' Voortman, who visited the expo last month, says.
AADA data shows there are about 60 car brands in Australia, more than a dozen of them Chinese, with at least six further Chinese brands expected to enter the market in the near future.
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'In Australia, we are reaching a dangerous level of oversupply. We have more makes and models than most developed countries,' Voortman says. 'It's a very perilous time.'
While competition, most notably between BYD and Tesla, is driving down prices, the risk is that consumers and dealers are left high and dry when either legacy brands or new entrants quit the market, he says.
Global consulting firm AlixPartners predicts that just 19 brands Chinese EV brands will be profitable by 2030. Among those warning of a consolidation is He Xiaopeng, the chief executive of EV maker XPeng, who recently told his colleagues the next two years 'marks the elimination round in the automotive industry'.
Australians still have a love affair with Japanese, Korean and US cars, which dominate new car sales. Toyota has been the country's top-selling brand for two decades. But even as EV sales in Australia have flattened recently, appetite for plug-in hybrids has soared. Last month, BYD's Shark 6 plug-in ute cracked the top 10 best-selling vehicles in sixth spot.
'Your EV dollar in Australia these days is much more contested,' Aman Gaur, the head of legal, policy and advocacy at the Electric Vehicle Council, says. The cheapest EV in Australia is BYD's Dolphin, priced under $30,000.
Unlike Europe and America, which have imposed heavy tariffs on imported Chinese vehicles, Australia no longer has a local car manufacturing industry to defend.
With no tariffs hobbling their entry, the Australian market, though comparatively small compared to its Asian neighbours, is seen by Chinese carmakers as a valuable testing ground for their competitiveness.
'If a Chinese car company can make a sound development in Australia, it can promote this model to other markets,' Zhang Xiang, an automotive analyst based in Shanghai, says.
Savvy Chinese buyers are also aware of the risks of betting on newer EV brands.
Arriving at the show early to beat the midday rush, Mr Li, 35, a Peugeot driver for most of the past decade, made a beeline for BYD, passing the European carmakers and the less-established Chinese brands.
'The technology in Chinese cars, especially EVs, is more advanced than foreign cars,' he said.
'But new car-making brands are unstable and may go bankrupt one day. This is what I'm concerned about.'