GUANGZHOU, Nov 19 — Even the announcement of 30,000 job cuts couldn't keep Volkswagen away from China's second most prominent auto show.

And it wasn't just cars they were showcasing at Guangzhou — there was fun and games with virtual reality technology.

And of course — plenty of electric vehicles.

Daimler board member responsible for China, Hubertus Troska, says: "We now believe 2025, 15-25 per cent of our vehicle sales could be electric. This is why we decided to create a new sub-brand which is 'EQ.' It's not IQ intelligence, it's EQ: electric intelligence.”

Daimler-owned Mercedes Benz debuted its first all-electric SUV concept.

A Mercedes-Benz EQ is shown at China (Guangzhou) International Automobile Exhibition in Guangzhou November 18, 2016. — Reuters pic

SUV sales in China were up 46 per cent in January-October compared to last year, as more consumers were able to afford them.

Renault Dongfeng president Francois Provost says: "SUV is still the most growing segment. And total SUV represents 37 per cent of the market, so its why, Dongfeng and Renault decided to go together starting with SUV.”

Joint ventures across sectors are also increasing.

CIBC head of FX strategy Jeremy Stretch says: "I think we are going to see consolidation between the auto sector and the high tech industries but of course also at the same time we're seeing some of those high tech industries starting to reverse or considering reverse engineering into the auto sector.”

And there was another subject worrying many at the show.

No decision has yet been made over a tax break that has propped up sales this year.

If it's not extended the world's largest auto market could see its first annual sales decline. — Reuters