In April of 2008, Guangqi Honda, a JV between Guangzhou Automobile Group and Honda Motor, unveiled Everus (Li Nian in Chinese), the first native brand of Chinese JVs at Beijing Auto Show. Following some impressive concept cars for various auto show debut, the final production model S1 was unveiled at Guangzhou Auto Show this month. Everus S1, based on the last generation of Guangqi Honda City/Fit Saloon with few changes, will go on sale in early 2011.
SAIC-GM, a JV between Shanghai Automotive Industry Corporation and General Motors, started late, but moved fast. On July 18 2010, SAIC-GM-Wuling, a SAIC GMâ€™s branch in West China, released its native sub-brand Baojun with a meaning â€˜great horseâ€™. 4 months later, the first Baojun 630 passenger car rolled off the line at SGMW. The Baojun 630 is based on the old SGM Buick Excelle (Chevrolet Excelle in Europe). It will also go on sale in early 2011.
The relationship between JVs and native makers dates back to 1995. At that time, FAW began to assemble Hongqi CA7220 based on Audi 100 with the permission from its partner Audi, to revive China’s first native car brand. After that, FAW assembled different models of Hongqi and Besturn based on Lincoln Towncar, Mazda 6 and Toyota Crown. In addition, Changan, BAIC and some other state-owned enterprises have brought partnersâ€™ platforms for native brands as well.
However, Everus and Baojun are different. They are brands belong to the JVs rather than the Chinese partners. With old but mature platform, the mission of JVâ€™s native sub-brands is to enter the low-end market, fighting against Chinese â€˜realâ€™ native brands.
China is a multi-dimension car market. Unlike Europe and American, Chinaâ€™s each car segment also can be divided into various markets. For example, in A-segment, FAW-VW provides various markets with up to 4 different models. The high-end Sagitar (Jetta A5) and Golf A6 are mainly for metropolitan consumers, the low-end Jetta A2 aims at towns and villages, while the New Bora A4 focuses on the mid-market.
It is beyond doubt that to maintain market share, the old Jetta A2 and Santana B2 have also damaged VWâ€™s brand image seriously. VW have paid much for it. But thanks to the native sub-brands, Guangqi Honda and SAIC GM will never face this problem. JV’s low-end native sub-brands may become a new trend of Chinese auto industry. Chinese â€˜realâ€™ native brands will have to be alert in 2011 and will have to move fast to counter their new ‘enemy’