THERE is an old saying: Haste makes waste. Chinese-owned car makers may be disregarding that advice at their own peril.

At the 2010 Beijing Auto Show last month, China's Chery Automobile Co Ltd unveiled more than 30 models under its four brand names, while rival Geely Automotive Holdings rolled out a whopping 39 new models under three names.

One of my foreign friends who paid a visit to the show told me he was impressed by the outpouring of new models showcasing the great strides the two latecomers to the market have made.

But he also said such a dizzying array had it drawbacks.

"It's all so confusing for the public," he complained to me.

As an auto industry reporter, I found myself also confused at the beginning, so I set about to do a little digging into the background of this showroom blitz.

Chinese domestic car makers are rushing into what's called multi-branding as they enter a more mature phase of their development. At the same time, international giants who manufacture joint-venture cars here, including General Motors and Ford, are eliminating unprofitable models and pouring all their resources into core brands.

Are Chinese car makers in their haste setting themselves up for failure?

There are a lot of benefits to having a variety of models under one umbrella brand. For one, auto manufacturers are able to target brands at different segments of a very competitive market. By broadening the mix, they are hoping to boost sales and widen their market share.

Newer auto makers like Geely and Chery, who have been tarred with the image of low-price, low-quality manufacturers, seem to feel under pressure to hoist themselves higher up in the price chain of the world's biggest auto market overnight. They were propelled in part by the narrowing profit margins of low-cost vehicles in a world where raw material prices are rising.

Li Shufu, chairman of Geely, earlier said that buying the Swedish brand Volvo Car Corp from Ford was part of his company's strategy to lift its brand image and appeal to more sophisticated Chinese consumers.

One of the best examples of the multi-brand strategy is Volkswagen. The iconic German car producer markets vehicles under its own brand as well as under brands of subsidiaries such as Audi, Czech-affiliate Skoda and the Italian car maker Lamborghini.

GM also sells diverse models under its Buick, Cadillac, Chevrolet and GMC brands worldwide.

International ambitions

Chery and Geely apparently think that the way to become a big player is to emulate the big players.

Chery established its core four brands in 2009: Chery, Rely, Riich and Karry. Chery targets the low end of the market with subcompacts like the Chery QQ. Karry is the brand for the minivan market, mainly rural areas.

Multi-purpose and sports utility vehicles are produced under the Rely brand, and Riich, as its name suggests, is the top-of-the-line vehicle that Chery hopes will turn the heads of the wealthy.

Yin Tongyue, chairman of Chery, earlier said that the four brands are more than just an expansion of overlapping products. "It's an overall plan for Chery's globalization," he said.

Coincidentally or by design, Geely, the largest privately owned car maker in China, has also diversified into three brands: Emgrand, Gleagle and Shanghai Englon.

In the price chain, Gleagle is at the bottom and Emgrand is at the top. Shanghai Englon evolved from the classic London black taxi design produced by Geely after it bought a stake in British Manganese Bronze Holdings Plc.

Both Geely and Chery have staged aggressive product launches.

Last year, 15 Chery vehicles were rolled out under the four brand names. Chery's Yin said he hoped the four brands would pave the way for Chery to achieve record sales of 1 million units by 2012.

Another 17 models are in the pipeline for launch this year, including the Riich G3, G6 sedans, Rely X5, H5 as well as Chery M14 coupe.

The car maker said it aims to lift sales by 40 percent to 700,000 units. Its research and development center will also kick off operation with an annual engineering investment of 2.4 billion yuan (US$253 million).

Geely, meanwhile, is forecasting sales of 400,000 vehicles this year and plans to launch more than 20 new models. They include the company's first SUV, the GX718, and a crossover version of the Panda compact.

But the question remains: Are Chinese domestic auto companies capable of handling the manufacture, marketing and distribution such a far-flung strategy demands?

Consumers normally buy cars not because they are new brands on the market but because they offer good value for money in terms of quality.

Buyers' confusion

Chery and Geely have a long way to go in convincing buyers that they have developed the technology and controls to ensure higher quality vehicles.

Then, too, the rush to market of so many new models is confusing to a lot of people who aren't sure how to assess what's on offer.

Without enough experience and capability in design and engineering, massive product launches could easily land car makers into troubles of design and intellectual property right disputes.

Some vehicles released by Chinese car makers bear a close resemblance to international models.

Geely's GE, which the car maker reckons was its first premier saloon, caused huge media discussion when it was unveiled at the Shanghai Auto Show last year because it looks similar to Rolls Royce's Phantom luxury sedan.

In addition, the product launches and subsequent marketing will eat up a lot of money, which could put pressure on the engineering and distribution operations of Geely and Chery. Sales of Chery vehicles rose 40 percent last year to more than 500,000 units. Nearly one-third of those sales were of the small subcompact Chery QQ, which has a profit margin of only about 500 yuan per car.

Geely, which just spent US$1.8 billion to acquire Volvo from Ford, had debt of more than 10 billion yuan earlier last year.

Hong Kong-listed Geely's debt-to-equity ratio rose from 25 percent to 67 percent after it issued US$250 million of convertible bonds to Goldman Sachs.

Li Maosheng, an auto analyst from CIC Industry Research Center, said the multi-brand strategy has had a certain impact on helping car makers grab market share and position brands.

"However, owning several sub-brands doesn't necessarily translate into bigger competitiveness and bigger market coverage," he said. "Managing unsuccessful sub-brands could pose a huge burden for companies."

Perhaps Chinese auto makers need to develop more patience in their eagerness to catapult themselves into high-end nameplates.

After all, look at Toyota.

The Japanese car giant started to manufacture its premier Lexus brand after nearly 50 years of development, and it took another six years to introduce the brand successfully into the United States market.

Setting up the brands requires more than just designing new logos.

It requires a comprehensive plan for development, investment, marketing and distribution, which all brings to mind another old saying that Chinese car makers might want to consider: Rome wasn't built in a day.