Foreign carmakers build Chinese brands

23 April 2013

SHANGHAI: General Motors, Nissan and Hyundai are among the foreign carmakers creating Chinese brands in order to compete with cheaper models made by local companies.

GM unveiled its latest Baojun model at the Shanghai motor show, while Nissan and Hynundai offered concept models there. BMW and its partner Brilliance China have plans for a new brand, Zinoro, with first product launched being a fully-electric vehicle.

"The development of a local brand is an important step for the Chinese auto industry," said Ian Robertson, chief of sales and marketing for BMW.

GM, meanwhile has sold 85,000 Baojun cars, made in a joint venture with two Chinese firms, SAIC Motors and Wuling Motors. This represents a marginal amount of the total 2.84m vehicles it sold in 2012.

In all, GM offers seven brands in China and rejected a suggestion that this was too many and was confusing consumers.

"The focus on the brands, the execution of the brands, as well as the distribution is well in hand and well-articulated," said GM vice president for global manufacturing Tim Lee.

"You cannot say Baojun is successful yet, because it is too early to say that, but they made a good start," John Zeng, director of Asia-Pacific forecasting for market intelligence provider LMC Automotive, told the AFP.

Hyundai declared its Mistra concept to be "a strategic model for China developed to secure a clear position in the mid-sized premium market in China and a car which reflected the needs and preference of Chinese customers from the development stage".

At the same time as foreign makers are creating local brands, a Chinese car brand is seeking to be accepted internationally. Qoros, a joint venture between an Israeli industrialist and Chery Automobile, owned by the Chinese state, has focused on producing a car suited to urban life.

"We thought there was an opportunity to create something different, where the balance is tilted more to comfort, sophistication, digital connectivity – what we call a social car," Stefano Villanti, Qoros' head of sales, marketing and product strategy, told Advertising Age.

He noted that Chinese consumers distrusted Chinese auto brands and perceived international brands to be of superior quality.

But, as Arto Hampartsoumian, CEO of BBH China, observed: "Someone has to be a game-changer, and maybe Qoros has the opportunity once and for all to change the perception of quality for "Made in China"."

Data sourced from The Economic Times, Advertising Age, China Daily; additional content by Warc staff