In China, Making Cars on a Budget

GUANGZHOU, China—Foreign auto makers in China are dusting off older designs as they scramble to come up with China-only brands of low-cost cars in response to a surge in demand for affordable vehicles from new middle-class buyers.

The change was evident at the auto show that opened Monday in Guangzhou, a southern industrial hub, where foreign makers and their local Chinese partners showcased or discussed new efforts to go after emerging middle-class consumers in China's less-developed hinterland. The annual income of many of those consumers is now climbing above 50,000 yuan, or about $7,500, which executives consider the threshold for car ownership in China.

Honda Motor Co. of Japan on Monday unveiled its first production model for the Linian brand, known as Everus in English. Honda and its joint-venture partner, Guangzhou Automobile Group Co., plan to launch the Linian subcompact sedan next year. The joint venture between Nissan Motor Co. of Japan and Dongfeng Motor Group Co. is also promoting its new China-only brand, Qichen, by demonstrating a concept model at the show. The small-car brand, whose English name is Venucia, is due to launch in 2012.

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