China auto show opens amid environmental, growth concerns

BEIJING (AFP) - Leading automakers are gathering in Beijing on Sunday for the kickoff of China's biggest car show, but lacklustre growth and environmental restrictions in the world's largest car market have thrown uncertainty into the mix.

More than 1,100 vehicles will be showcased at the Beijing International Automotive Exhibition, which opens to the public on Monday.

General Motors, Toyota, Volkswagen and Hyundai are among the global manufacturers set to attend, along with SAIC and Dongfeng, China's number one and two domestic automakers.

The expo comes as a growing number of Chinese cities are restricting the number of cars on the road in a bid to battle pollution and congestion - moves that analysts warn could cut into purchases.

The eastern city of Hangzhou, a popular tourist destination, last month became the sixth major city to implement such a restriction, with some estimates placing the limit at 80,000 car plates a year.

China's car sales surged 13.9 percent to 21.98 million vehicles last year. But that growth hit a speed bump in March, slowing to a 6.6 percent year-on-year rise after reaching a record 17.8 percent high in January.

China's economy has also turned in its weakest performance in 18 months, growing 7.4 percent in the first quarter of 2014.

Even so, analysts say the China market's importance to global manufacturers cannot be overstated.

They point to French auto giant Peugeot Citroen's move earlier this year to hand over part control to Dongfeng and the French state.

German auto giant Daimler said last month it had signed a deal worth one billion euros (S$1.73 billion) with Chinese partner Beijing Automotive Industry Corporation to expand production at their joint venture based in Beijing.

South Korea's largest automaker Hyundai Motor also announced in March it was planning a fourth plant in the country.