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Auto industry drives closer to fulfil dream
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China’s auto industry may be driving closer to achieving its dream at the Guangzhou Auto Show, with some carmakers blazing new paths undaunted by a perception that their self-developed brands for the mid- to high-end market are “cheapie.”
BMW-Brilliance’s first model
Germany’s luxury carmaker BMW and its Chinese partner Brilliance Auto unveiled the first model of their domestic brand Zinoro on the eve of the auto show, which opened yesterday. The purely electric Zinoro 1E will drive into the domestic market in March next year, but it will only be initially available in the leasing market. The partners have not set a target for Zinoro sales.
BMW Brilliance took a short two years to develop the 1E with its research and development team in Shenyang, Liaoning Province, said Steven Shao, head of Zinoro brand management. Usually carmakers take an average development period of five to six years for a new car in today’s market.
Ye Sheng, auto research director of market research firm Ipsos, said: “Many hands make light work is the core idea of developing joint-venture car brands. Despite the high efficiency of this kind of concerted research and development, it is still a big question how much domestic carmakers can actually learn from the cooperation as foreign partners are known for their zealous protection of technology patents.”
He, however, cautioned that Zinoro’s positioning as a high-end electric car brand may cause sibling rivalry with BMW’s i series.
Chery’s young joint venture
While most joint-venture car brands in China are developed by two partners that have been manufacturing cars together for more than a decade, Shanghai-based Qoros was set up by domestic carmaker Chery and Israel Corp, whose cooperation dates back only to 2007.
Six years later, the brand officially launched its first mass-production model, the Qoros 3 sedan that is priced from 119,900 yuan (US$19,678) to 167,900 yuan, yesterday.
“Qoros is a way to build know-how and intellectual properties that belong to a Chinese entity,” said Jochen Siebert, managing director of JSC Automotive (Shanghai).
Built by a European team of auto specialists, the car meets the exacting European safety standards. Last month, it became the first car from a China-based brand to be granted a maximum five-star rating by Euro NCAP, the organizer of the one of the most comprehensive and authoritative vehicle crash tests in the world.
The car also meets consumer preference for European-designed cars prevailing in China’s upper high-end segment.
The car’s quick achievement from design to launch is partly due to the heavy involvement of world-class suppliers in helping develop the Qoros 3 sedan’s key technological parts, such as its intelligent modular platform, engine and gearbox.
Siebert brushed aside concerns that the heavy outside involvement may erode Qoros’ competitive edge when he pointed out that many major international carmakers actually outsource certain sections of their work.
But he added that Qoros certainly ‘‘can’t survive as a small company” because of its planned annual production capacity of 300,000 units and not due to its higher cost compared to other Chinese OEMs.
Acquiring foreign car manufacturers
Some domestic automakers, however, took the path of acquiring a foreign carmaker together with its intellectual properties.
Taking over Swedish car brand Volvo in 2010, Chinese automaker Geely was counting on the acquisition to add value to the company. But an unexpected identity dispute with Chinese authorities stalled Volvo’s localization for nearly two years.
Perhaps no one will question Volvo’s Chinese identity in the future like they did in the past after it rolled out its first Chinese-made car yesterday, the S60L. The car clearly showed the brand’s localization efforts as it was designed with Chinese consumers’ preference for spaciousness, with its wheel-base extended by 80 millimeters to 2,856 millimeters.
The car is expected to help accelerate Volvo’s growth strategy in China, said Lars Danielson, senior vice president for China operations at Volvo Car Group, adding that year-to-date China sales jumped 42 percent annually.
The stretched version of the S60 sedan rolls out of Volvo’s first overseas factory in Chengdu, Sichuan Province, and will compete head-on with the Mercedes-Benz E Class Long, the BMW 3 Series Li and the Audi A4L.
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