The Brand Condundrum

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One day automotive historians will look back to 2008 and pour over the books, the news articles, and the blogs and wonder why a mighty company like GM managed to run into difficulty in the USA, then the worlds strongest auto market. Some might point their fingers at unions, others might point their fingers at the products, and others might point their fingers at a company that was mismanaging its brands.

Chinese companies will do well to look at GM harder than they are now. Chinese companies are eager to take GM as a pinnacle of motoring success due to its rapid sales in the northern hemisphere from America to China and every country in between. Both Chery and Geely, both up and coming Chinese companies were keen to emulate GM’s multi brand strategy by producing their own in house up market brands. Chery produced Riich and Reely, Geely produced Emgrand, Global Eagle, and Englon. However, both Chery and Geely already have reasonable brands, so why go further and dilute them with odd sounding brands?

However odd they may sound to the Western ear, it seems that both Chery and Geely are laughing with their new strategies. All of their new brand models appear to be selling very well, Geely is having fantastic success with its Global Eagle Panda model, and also its Emgrand EC7 model, Chery’s Riich X1 and M1 are all selling very well.
Perhaps Westerns were too quick to mark down these brands as foolish ventures, when in fact they have worked quite well for both Chery and Geely in the Peoples Republic of China, but the major test is to see if they will work in overseas markets.

Chery is planning to take its Riich G5 model to the USA, and Geely has been rumoured to be planning to take (and possibly build) the Panda mini car in Australia within the next few years. How are Western markets expected to react to Riich, Emgrand and Reely? Will they take it on like they did with market late comers like Subaru and Daewoo, or will these brands eventually be abandoned (ala GM’s) in favor of a group of initial core brands?