GM by any other name? Car firms face brand puzzle in China

AFP  | 

The Buick brand of US auto General Motors carries instant recognition but its "Baojun" cars sold in China, displayed at the Shanghai auto show on Sunday, might leave many puzzled.

"You probably all know Buick, Cadillac, Chevrolet and Opel, but many of you may not know... Baojun passenger cars," GM China president Bob Socia said.

Baojun is an "indigenous" brand, vehicles made by China-foreign joint ventures as required by the government, which wants to prevent domination by foreign companies and give lagging domestic firms more technological expertise.

Analysts said such brands attempt to compete with the cheaper cars made by Chinese companies, but have met with mixed success.

AFP

GM displayed its new Baojun 630 at the Shanghai auto show, among the more than 1,000 vehicles vying for the attention of potential buyers in the world's largest auto market.

But GM was not alone with other foreign auto makers showing their own similar brands. Japan's Nissan has the Venucia, and it unveiled a new energy "concept vehicle" under the brand at the show.

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

"But I don't think the other indigenous brands... are going to have much potential," Zeng said.

AFP

GM sold just under 85,000 Baojun cars -- made by a joint venture with two Chinese firms, SAIC Motor and Wuling Motors -- last year, the first full year in the marketplace, according the company.

Baojun sales surged 39.8 percent year-on-year to 7,005 units in March, but that is only 2.4 percent of GM's total vehicles sold for the month.

GM offers seven brands in China, more than any other of its markets, but an executive denied the proliferation 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.

AFP

Even Germany luxury car maker BMW plans to launch a new brand in China, Zinoro, with its partner Brilliance China, aiming for the first product to be 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.

Chinese state media took aim at foreign brands last month, accusing them of quality problems, but analysts said it was likely a sign of growing awareness of consumer rights rather than a government-led move.

Volkswagen recalled more than 384,000 vehicles for gearbox defects after state television alleged a glitch caused acceleration problems, while three other luxury German automakers faced accusations of using toxic materials.

"My feeling is that you have an expression of a more critical Chinese media. I would not believe there is a conspiracy," said Klaus Paur, Shanghai-based global head of automotive research at Ipsos.

Foreign brands now command more than half the Chinese auto market as they are favoured by Chinese consumers for perceptions of better quality and greater brand recognition.

At the Shanghai show, Daisy Xu said she was attracted to German brands as she eyed a VW Touran.

"VW, as a German brand, outperforms (other) cars in terms of engine power and safety," she said.

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