Jenny Chan 陳詠欣
Apr 29, 2013

Foreign carmakers create sub-brands specifically for China

SHANGHAI - Responding to the government’s call, automotive joint ventures have in recent years introduced a series of China-only marques, with the practice continuing this year at the 2013 Shanghai Motor Show.

A Horki concept car from Kia
A Horki concept car from Kia

The list of brands introducing China-only models at the show is a long one:

  • Hyundai offered the Mistra, a "strategic model for China developed to secure a clear position in the mid-sized premium market".
  • Kia also was busy unveiling a new brand called Horki through its Chinese JV partner, Dongfeng Yueda Kia (DYK). The Horki concept sedan shares its platform with the 2014 Kia Forte.
  • The new Volkswagen Gran Lavida is a China-only sportback wagon made by the SAIC-Volkswagen joint venture in similar style with the Audi A3.
  • Maserati premiered the Quattroporte, which is exclusive to the Chinese market. The company is the only superluxury automaker that is selling a China-only special edition.
  • The joint venture of First Auto Works (FAW) and Toyota unveiled Ranz, a new alternative-fuel vehicle targeting the local market.
  • Honda's Crider sedan, scheduled to go on sale in June in cooperation with JV partner Guangqi Honda Automobile, targets the very competitive mid-sized segment in China.
  • Ford relaunched its Escort name from the 1960s only for Chinese buyers. Based on the Focus model but designed with more space, which Chinese buyers prefer.
  • BMW and its Chinese partner Brilliance have already announced plans for a new brand, Zinoro, with the first product being a fully electric vehicle, according to Ian Robertson, chief of sales and marketing for BMW. (This vehicle was absent from the show last week.)

These new sub-brands, required by Chinese regulations, are usually presented in two ways: recycling outdated models to be re-sold on the local new-car market at cheaper prices, and adding electric or hybrid technology to existing models.

Conspiracy buffs have argued in the past that Beijing is trying to obtain intellectual property with the rule, but it is noteworthy that the cars introduced under the Chinese sub-brands are typically based on previous-generation platforms. 

A better explanation, according to industry watchers, is how the Chinese sub-brands will hopefully make sales figures of domestic labels look better than those of foreign brands.

Going against the grain, Mazda said its joint venture partner Changan will soon launch a car in China that uses technology provided by the Japanese brand, but not under any sub-brand name.

“It was too costly and would take up too many of our resources for us to start a new brand and develop a dealer network,” Mazda’s CEO Takashi Yamanouchi told Reuters.

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