Demand for multipurpose vehicles to rev up in China thanks to second-child policy, experts say

After strolling around the Auto China 2016 expo, which ran in Beijing from April 25 to May 4, and checking out 1,000 cars from more than 100 automakers, Luo Xin saw his future.

"Multipurpose vehicles are perfect for families," says the 36-year-old bachelor, who explains that he plans to marry soon and have children.

A model poses in a multipurpose vehicle at a recent auto show in Yichang, Hubei province. Sales of MPVs have risen sharply in China, making them a hot segment of the industry. [Photo by Liu Jiao / China Daily]

The Volkswagen Multivan is one of his favorites, as the price is similar to a Mercedes-Benz V-Class, although he says he'd likely choose the Toyota Sienna because it is cost-effective and safe.

Luo, who runs an English training institute, already owns three cars: a Buick GL8 for picking up students and parents; a Mercedes-Benz E320L for meeting clients; and a Porsche Boxster for fun.

He reflects a change sweeping the passenger car market in China, where consumers no longer view vehicles as a means to show off, but as machines that serve a practical purpose.

With the second-child policy now in place, more couples are expected to have two children, which is likely to boost the MPV segment.

The segment has grown rapidly in recent years. Sales hit about 1 million units in 2013, accounting for almost 7 percent of the passenger vehicle market, just 4 percent less than small cars.

Last year, MPV sales soared to 2.2 million units, up 10.1 percent year-on-year, accounting for 10 percent of the overall market and making it the fourth-largest segment.

Industry insiders predict that MPVs will this year overtake mid-size cars to become the third best-selling auto segment in China, just behind compact cars and sports utility vehicles.

Naturally, automakers are optimistic about the future of MPVs in China.

"We see great potential for high-end MPVs like the V-Class," says Guido Krupinski, CEO of Fujian Benz Automotive Co, a three-way joint venture between Daimler Vans Hong Kong Ltd, BAIC Motor Corp and Fujian Motor Industry Group Co.

"With the economy as well as individual incomes growing, domestic elites will have more diversified and individual demands for trips. So the market for high-end MPVs that can satisfy both family and business demands will continue to grow."