Posts tagged ‘SAIC’


Selling Opel: what’s good for China is good for General Motors

15.02.2017


Above: The Opel Astra K: on the roster.

I’m not so sure that GM going into talks to sell Opel and Vauxhall to PSA (Peugeot–Citroën) is that big a surprise.
   We obviously hold a lot of nostalgia for these brands, and it’s only right that we perceive GM as selling its family jewels. Opel has made some great cars over the years, and Buick in China and the US, Vauxhall in the UK, and Holden in Australia rely on this division to provide it with product.
   But it wasn’t long ago that I said I foresaw the next Holden Commodore being a four-door booted model based on a Chinese Buick Regal that’s on the same platform. While I’ve been proved wrong with scoop photos and inside information from journalists in the immediate term, longer-term this doesn’t look so far-fetched, in a future where Peugeot owns Opel–Vauxhall and GM has no choice but to consider Chinese sourcing seriously.
   Therefore, GM isn’t thinking that it’s selling off the family jewels, at least the GM where Chinese partner SAIC is overwhelmingly calling the shots.
   What they are thinking is this: ‘We should be able to develop the whole lot in China.’ They weren’t nostalgic over Holden, and they won’t be thrilled with the losses at Opel. It’s willing to sacrifice it to make its own position stronger. We’ve already seen that SAIC has called it quits when it comes to British assembly at Longbridge—that’s now all done back in China.
   There’s been such a massive technology transfer from the US to China over the last few years that Europe is seen as surplus by the folks in Shanghai. They have all the platforms on which they can make products globally. They may even, rightly or wrongly, think that the remaining brands can get them into Europe, even if GM had pulled its Korean-made Chevrolets out of there.
   Holden can be used to westernize the product and the Australians have shown they can do it well.
   I’m not saying I agree with this, as a long-time Opel fan. I was looking forward to the new Commodores coming out of Rüsselsheim. The car looks the business, it’s roughly the size of the recently deleted Ford Falcon (therefore, I’m not sure why people are so upset about its size), and the majority of buyers don’t even know which set of wheels the power’s going to. I’ve got an Astra K coming in a few months at Lucire.
   What you’re going to see is GM basically being a Shanghai-run firm with China supplying global markets and the US operations kept going for their brand cachet.
   In the meantime, a hypothetical PSA-run Opel will continue with the existing plans till the end of these models’ life cycles, then China will become the manufacturing hub for numerous markets.
   SAIC already makes a load of Cadillacs, Buicks and Chevrolets for the domestic market, and they’ll want to pump them out more widely.
   They’ve also shown that they can take new GM platforms and turn them into Roewes—or old GM platforms and turn them into Baojuns.
   PSA, meanwhile, with 14 per cent controlled by Chinese firm Dongfeng, will pursue a strategy of streamlining platforms and be focused more on Europe. It could pay off as cross-town rival Renault has done well with Nissan, Mitsubishi, Samsung, Dacia and AvtoVAZ, but it won’t nearly be as secure. The two French groups have been obsessed with one another for as long as I can remember, for years spending more time rivalling each other than actually coming up with what customers wanted.
   Dongfeng may have to cough up more lolly and it could become a larger shareholder than the Peugeot family or the French government. But will it have the sort of geographical coverage that Renault has?
   That’ll be what PSA will be asking itself, knowing that it’s reasonably strong in China—but also realizing that it hasn’t been clever at creating models that can be sold globally (the current Citroën C6, DS 5LS and the DS 6 among them, sold exclusively in China). Nevertheless, there are savings to be had, though the most obvious fear is that Opel and Vauxhall will go the way of Panhard and Talbot, brands that fell into either Peugeot or Citroën’s hands over the years and become defunct at the expense of the parent companies’. Is there a desire to extend the group’s brand portfolio beyond Peugeot, Citroën, DS, the various Dongfeng lines, and the ex-Hindustan Ambassador?
   The official statement is non-committal enough and gives nothing away: ‘PSA Group and General Motors confirm they are exploring numerous strategic initiatives aiming at improving profitability and operational efficiency, including a potential acquisition of Opel Vauxhall by PSA.
   ‘There can be no assurance that an agreement will be reached.’
   In any case, we always said that SAIC was playing a long game. MG was a toe in the water. GM is the real deal.
   Controlling GM means they can do as they please, and what’s good for China is good for General Motors.

Tags: , , , , , , , , , , ,
Posted in branding, cars, China, culture, design, leadership, marketing, media, USA | No Comments »


Why the next Holden Commodore will have a traditional boot

01.12.2016


Above: The Holden Commodore SS-V, facing its last year of manufacture.

The current wisdom appears to be that when the Holden Commodore VF leaves production in 2017, it’ll be replaced by the liftback version of the Opel Insignia B. After all, the only big sedan Ford Australia’s offering in place of the now-defunct Falcon is the liftback version of the Mondeo, a car that’s wider, taller, and with a longer wheelbase than the supposedly larger Falcon. I think the crystal ball-gazers are wrong.
   I could say that the Australian and New Zealand big car buyer is very traditional and would balk at the idea of the big Holden being a hatch. But that’s not the only reason. There’s a bigger one: China.


Above: GM currently makes the Opel Insignia A-based Buick Regal in China, after initially beginning with German production.

   At the moment, China makes a version of the Opel Insignia A locally, and it’s a four-door sedan with a traditional boot. They badge it as a Buick Regal, a nameplate that’s arguably got stronger goodwill in the Middle Kingdom than in the US, even if it’s been running Stateside since Kojak drove it on the streets of Manhattan. And the Chinese like their traditional sedans: it’s a market where liftbacks aren’t kosher.
   While Holden says the next Commodore will be sourced from Germany, and the media speculate that the Germans won’t get a four-door sedan, it’s not to say that one hasn’t been developed. And we’re not exactly missing precedent for a country to tool up for a body style that isn’t offered domestically. We need look no further than GM itself, which was selling the Opel Antara into Europe, exporting it from Korea, years before the same model was available domestically as a Daewoo.
   While Australia and New Zealand will account for quite tiny numbers, you have to think about where else a Stufenheck Opel Insignia B might sell. How about the Middle East, where it could complement the Chevrolet Malibu and Impala as a sportier counterpart? Or South Africa, which would also welcome right-hand drive? Could China take some as Regals in advance of SAIC–GM tooling up for its own version? It’s all conceivable.
   There’s also a possibility that Holden will start off sourcing the next Commodore from Germany, and switch to Chinese production when the Buick Regal is ready. SAIC owns the majority of its venture with GM these days, and calls the shots. What’s good for General Motors is good for China, as the saying goes. And it could well determine that one of its plants, either in China or in Thailand, where plenty of Australasian-market cars are sourced from, could be the production site of the 2019 or 2020 model. (Korea has been ruled out already, according to The Wall Street Journal.)
   GM has switched sources mid-run before, and happily used the goodwill of German engineering when introducing a vehicle made with cheaper labour. Forty years ago, after selling German Opels for years, it began selling the Opel Isuzu from Japan: it was the Isuzu Gemini, the Japanese counterpart to the Opel Kadett C world car. The following year, 1977, the Opel Isuzu became the Buick/Opel. The Japanese origins were eventually hidden. The 2008 Regal, meanwhile, was originally sourced from Germany until SAIC was ready with its locally made version.
   In this day and age, when global-market Renaults and Fords come from Turkey, Nissans and Suzukis from India, and Fiats and Volkswagens from México, no such name changes will be needed. If the quality is good enough, ‘made in China’ won’t be that strange a concept. No one seems to have much of an opinion, or a stereotype, over ‘made in Thailand’—yet we buy plenty of product from them.
   GM isn’t likely to sleepwalk into this transition as it did pre-GFC. Then, the company was ill-prepared, prepared to splash money around on different platforms. The leaner 2010s GM will want to grab every sale it can, and I don’t think Aussie or Kiwi buyers are going to flock to the showrooms for a Commodore hatch, even if it looks like a Porsche Panamera.
   They won’t necessarily care that the new model is a better handler, with powerful engines, better economy, a lighter weight, and a decent interior. They could notice that shoulder room has gone down a fraction. There’s a certain conservatism to this market, and the idea of a hatchback just might be too foreign for this group.
   And if they can supply it, with the Chinese Buick Regal waiting in the wings, then why not maximize sales?
   When the four-door Commodore débuts in Australia next year, after its début in Genève as the Opel Insignia, the General will again have one over arch-rival Ford when it comes to big cars.

Tags: , , , , , , , , , , , , , , , ,
Posted in business, cars, China, globalization, marketing, USA | 1 Comment »


MG SUV soon a reality: good

06.02.2014

I have to admit I get a bit bored of those crying foul now that MG will launch an SUV, one which seems to have some parallels with the Ssangyong Korando C (left).
   They say that MG should have made sports cars as part of its revival, and that the brand should not adorn a bunch of Chinese-made saloons and an upcoming SUV.
   Let’s look at a few hard facts.
   MG did make a sports car when NAC, and later SAIC, took over. It was the British TF design. And they sold fewer than 100 cars per year in the 2007–11 period, despite it being the cheapest roadster on the market in China. It wasn’t just Chinese buyers who ignored them: the TF was the first model revived at Longbridge, with very keen pricing, and hardly any Britons touched them, either.
   So if you were a business and you were confronted with decent sales of your saloon cars and dismal sales of your sports car (after building a whole new factory for them), where do you place your efforts?
   You give the people what they want.
   What’s surprising is that this is hardly unprecedented in MG history. There have been MG saloons for a good part of its existence, but right now, there are parallels with the 1980s. Then, the MGB had died in 1980, and Austin Rover decided it would launch a range of sporting saloons based on the humble Metro, Maestro and Montego. That’s no different to today’s MG range of the 3, 5 and 6—there’s even a 7, based on the old MG ZT.
   And globally, but more importantly, in MG’s domestic and key export markets, SUVs are selling strongly.
   Again: you give the people what they want.
   I was one of the very few people who wrote that I believed the Porsche Cayenne would be a huge hit at the turn of the century, and that the Porsche brand could survive such an extension. I was right.
   MG’s brand can easily be extended, given that it has had a less focused history than Porsche. At two points during its British ownership, it sold estates, for goodness’ sake—once in New Zealand, with the Montego-based MG 2·0 SL, and toward the end of the Phoenix Four era, with the MG ZT-T.
   A good deal of estate buyers now eye up SUVs, and that is simply a trend that SAIC is following.
   A sports car may follow in time. There will be a fastback based on the Auris-like MG 5, and not a moment too soon. A “proper” sports car could come if the rest of the range does well. SAIC isn’t run by mugs, and they know the heritage of the MG brand.
   MG sister brand Roewe has been voted the best in service and customer satisfaction among car dealerships, beating even the foreign-branded competition in China, while the Roewe 350 topped its class for customer satisfaction, according to the China Quality Association. The MG 3 came second in its segment.
   We’re talking about the most competitive car market on earth, and the Chinese equivalent (as far as I can make out) of the J. D. Power survey.
   Those accolades are things that BMC, BL, Austin Rover, Rover Group and MG Rover could only dream about, especially through the 1970s.
   I’d rather people give SAIC the acclaim it deserves for giving MG a decent go where the British and the Germans had failed—and for putting money where its mouth is.

Tags: , , , , , , , , , , , , , , , , , , , ,
Posted in branding, business, cars, China, UK | No Comments »


In the MG world, the Chinese understand Britishness better

20.06.2012

Take a car range that’s not selling too well, and try to pull the patriotic heart-strings to see if you can move a few.
   Trouble is, this ad for the MG 6 Magnette, which is running on some of our sites, is pretty awful.
   It’s not convincing, for starters. Brand Germany has its positioning so well sewn up that it’ll take more than a low-budget campaign to shift consumer perceptions, even in Britain. Whomever did this creative obviously hasn’t realized that even the Metropolitan Police doesn’t always buy British any more—though, by and large, the French police will buy French, and the Polizei will buy German.
   It’s worse than Citroën’s effort in trying to convince us that the C5 is Germanic, though at least in its case, it came off mildly aspirational.
   And how ‘Beautifully British’ is the MG 6 anyway, when it was Chinese funds that propped it up, and most of the car is made in China for only final assembly in the Midlands?
   As Edward Sheldon pointed out in the AROnline Facebook group, a much better approach would be to distinguish the MG 6 by making the notion of “buying German” seem me-tooish. Target the MG 6 at the non-conformist, those individualistic buyers who don’t want to drive yet another Focus or BMW Dreier. Even the off-the-cuff copy that Edward came up with in conversation (‘Exclusivity is a myth. Follow your Heart’) is better than the drivel MG originated.
   While it might not be the better car, at least those who opt for a 6 know they are bucking the trend—after all, people have bought outclassed French cars in some segments because they didn’t want to seem like the chap next door.
   What is even more interesting is that the promotions for the same car in China are far more interesting, with a greater need to cut through the clutter that is 2010s Chinese advertising. The use of MG’s history, the ‘Morris Garages’ legend, and a ridiculous storyline that makes the Milk Tray Man seem dull help turn the 6 into a far more appealing proposition, even if not all of it translates well into English. But Britishness, in this case, seems to work far better—it looks like the Chinese agency understands subtlety, using the smallest of hints. Granted, I am comparing a web ad to a video, but still …

Tags: , , , , , , , , ,
Posted in branding, business, cars, China, internet, marketing, TV | No Comments »


Endgame: Saab files for bankruptcy

19.12.2011

If you’re a car nut, then you won’t be mourning, too much, the passing of former Czech president Vaclev Hável. Or, for that matter, Kim Jong Il. It’s Saab that has finally died as it files for bankruptcy after GM, which still licenses key technologies to the Swedish firm, vetoed its sale to Zhejiang Youngman Lotus Automobile.
   GM has a JV with SAIC, the Shanghai automaker, and believes that if those technologies were to find their way into the hands of a small upstart Chinese rival, it wouldn’t be to its advantage. Saab, which had been teetering on collapse since March, when it first stopped production, decided to call in the receivers today.
   GM had issued a statement at the weekend, saying, ‘Saab’s various new alternative proposals are not meaningfully different from what was originally proposed to General Motors and rejected … Each proposal results either directly or indirectly in the transfer of control and/or ownership of the company in a manner that would be detrimental to GM and it shareholders. As such, GM cannot support any of these proposed alternatives.’
   Swedish Automobile, the parent company of Saab, responded, ‘After having received the recent position of GM on the contemplated transaction with Saab Automobile, Youngman informed Saab Automobile that the funding to continue and complete the reorganization of Saab Automobile could not be concluded.
   ‘The Board of Saab Automobile subsequently decided that the company without further funding will be insolvent and that filing bankruptcy is in the best interests of its creditors.’
   GM, in the two decades in which it owned Saab, failed to turn a profit with the brand. However, its parting gift, the new 9-5 saloon, was heralded by some fans as a return to form for the company. Hopes were high for it, and the 9-4X crossover, helping Saab back into a position of strength.
   It’s easy to do a post mortem now, but the failure could be levelled at GM’s misunderstanding of the Saab brand. It may have been sensible to shift Saab models on to Opel platforms for economies of scale, but, in doing so, the cars lost some of their character. The lowest point was when GM created a rebodied Subaru Impreza and called it the Saab 9-2X, which fooled few buyers—one has to remember that Saab buyers tended to be well educated. Saab never fitted well in a business which targeted the mainstream: its own cars were always bought by people who enjoyed their quirkiness and the fact they did not follow convention.
   GM only understood this when it was far too late, as the last two models demonstrated.
   When GM itself had to file for bankruptcy protection in the US in the late 2000s, Saab, Pontiac, and Saturn were the victims.
   When Saab was sold to Spyker, its boss Victor Muller invested heavily into the business to try to turn it around—but he, and other investors, would have lost tremendously today. Saab fans will likely remember Muller favourably—after all, he put his own money into the business and shared his supporters’ passion—but in a world where break-even points are at hundreds of thousands of units, Saab’s 30,000 in 2010 were never going to be enough. MG Rover Ltd. collapsed with 2004 sales of 115,000 in 2005.
   As hindsight is 20-20, Saab and Youngman might be accused of wishful thinking, believing it to be unencumbered by GM’s IP rights. However, the American business held the right of revocation over key licences that make up Saab’s 9-3, 9-4X and 9-5 models.
   It’s not the first time intellectual property has got in the way of car businesses. One of the most famous examples was BMW arranging with Rolls-Royce trade mark owner Vickers plc to license the brand for motor cars, as Volkswagen negotiated to buy the Rolls-Royce Motors business. And all Volkswagen really had to do to find this out was visit the Rolls-Royce website home page at the time: right at the bottom, stated clearly, was the message that the Rolls-Royce brand was licensed from Vickers plc.

Tags: , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in branding, business, cars, China, design, marketing, Sweden, USA | 3 Comments »


MG taps into BMC’s small-car heritage to market the 3

02.01.2011

SAIC is doing a great job in tapping to the heritage of MG and the companies that have gone before. Hop over to the SAIC–MG site and you’ll see this image to tie in to the launch of the B-class MG 3 hatchback:

MG celebrates its small car expertise

   The imagery tells a good deal of the story already: the Austin 7, the Morris Minor 1000, the ADO 16, the MG ZR Mk II, the MG 3 SW, and the latest MG 3. The text refers to the 80 years of expertise that MG has had in small cars (more if you begin counting the other parts of BMC), how they are beloved of the Royal Family, how such old cars are kept by their fans in Britain, and, after the company created the Mini (a particularly cheeky reference to either the 1959 or the 2000 Mini—it’s intentionally ambiguous), it’s moved on to China.
   My Mandarin is non-existent but I’m guessing that the names referred to in the text are Pinyin transliterations of Morris and Cecil Kimber.
   Never mind that there are probably more Britons buying new German cars these days, and that BMW might not be that happy to see MG claim that it created the Mini. Technically, there is no lying here, and gives MG a far better halo effect among Chinese buyers than it ever had with British ones in its waning days under UK ownership.
   It also helps that the mainstream (state-run) media in Red China don’t go around rubbishing MG and Roewe like the British media were so keen to do with MG and Rover.
   Early indications from Chinese websites such as the China Car Times is that the MG 3’s interior quality leaves something to be desired, while MG fans at Keith Adams’s AROnline site are generally negative about the styling.
   This is not the MG that traditionalists know, with the TF, A or B, but then, the latest MG 3 is probably on a par with the MG Metro of the 1980s as a warmed-over hatch. The MG 6, at least, doesn’t look like the Roewe 550 on which it is based—and that’s a step up from the MG Maestro of the same decade. This promotional message might not work perfectly in markets where MG can’t be readily mixed with Austin and Morris, but as a marketing exercise, the copy and the imagery give MG with a sense of desirability (Chinese buyers might be shifting to favouring local brands, but there’s still a bit of snobbery about foreign ones), and of proven expertise (which few of its rivals can claim).
   It’s the sort of sophistication that few would give credit to a Chinese automaker for having. However, it shows that imagination and humour are not lacking in Shanghai—and even if you don’t like the look of the 2011 MG 3, it’s at least original, unlike the Toyota clones coming from BYD. At this rate, the occident should be worried about the rise of the Chinese motor industry, because even the marketing is getting cleverer.

Tags: , , , , , , , , , , , , , , ,
Posted in branding, business, cars, China, culture, design, internet, marketing, media, UK | 3 Comments »


Johnny Foreigner might be better at running a car company in Shanghai

12.12.2010

As I made links for the last post, I noticed there were a lot of comments on AROnline about the replacement for the Roewe 750, the Chinese car that is based on the old Rover 75.
   The replacement will be on the Opel Insignia platform, owned by GM. It’s been followed by a lot of cries that are all too familiar to me.
   Most of them are saying that MG is dead, and has been for a long time, underpinned with the sentiment of ‘How dare the Chinese put this car on an American platform?’
   They ignore that some of the design is still done by a British firm and while the physical British input into the next generation of Roewe and MG cars’ production is much more limited than what we see at Jaguar and Land Rover—or, for that matter, Nissan, Toyota, Honda et al—unlike the Japanese brands, the MGs will, at least, continue to bear a brand steeped in British tradition.
   Many brands are not owned by a company incorporated in the country of their founders, and while I often make my choices based on the parent company, the majority of people do not care.
   The comments also seem rather unfair and steeped in some cry of Yellow Peril.
   I wrote on the site, in response to some of them:

   Brands have, for nearly as long as the motoring industry has been around, been acquired by different groups. Are current Vauxhalls “true” British Vauxhalls, because they really haven’t been since GM bought the place in 1925? From the 1930s, Bedfords went on to Chevrolet platforms, yet history does not seem to judge them as harshly as some of us are doing above. They are not the ‘American Bedfords’ or the ‘faux Bedfords’.
   As the world changes, it is only natural that some of these brands will be acquired by countries that do not share the same heritage as Great Britain. As far as I can see, Tata seems to escape the same level of hostility because India was once part of the mighty Empah. As India becomes more confident, and in, say, 2025 when all Jaguar platforms are exclusively engineered there with the help of a non-British car maker (platform-sharing is just as inevitable in the luxury sector), will they be met with the same criticism?
   This is the real world: globalized, with car manufacturers turning to low-cost options where possible. We are connected with internet and intranets. And SAIC is simply leading when it comes to taking an American-owned platform engineered in Germany and putting the ‘Made in China’ stamp on it. Occidental manufacturers have been doing it for years: as Climbsyke points out, Rover did it with Honda platforms …
   Yet we continue to be drawn to these models not because of their Japanese roots, but because they have some connection to the brand, which stirs our emotions. Some of them had the lion’s share of work done in Japan, not Britain, yet that, too, is conveniently overlooked. No one ever mentions the war (which I will now, and China was one of the Allies).
   While some Red Chinese manufacturers are turning out junk that would not get past injunctions waged around intellectual property issues, at least SAIC has some awareness of the history of MG and is willing to acknowledge it. With Roewe, never mind the pastiche-British marketing that it indulges in for the domestic market where these cars are mainly sold; I’m confident that the Shangaiese are more savvy than many of us are giving them credit. An MG is an MG, regardless of the ethnicity of the parent, and regardless of the shouts of the Yellow Peril, as long as its brand values are somehow incorporated.

   What may well happen is that SAIC, MG’s parent, will build up some cash by selling mass-market models, which are, incidentally, doing very well inside Red China.
   Then as the Chinese demand for them takes off (as it is beginning to), it will release a sports car.
   It should rightly concentrate on its domestic market first, and in recessionary times, working on a specialist sports car while the demand is not there just seems foolish.
   When such a sports car arrives, I wonder if the same critics will be there to shout how un-British it is—even if SAIC has to stick it on a Volkswagen platform.
   In my mind, these cars are no more and no less British than the Honda-based models that kept the MG and Rover brands going through the 1980s and 1990s, and it’s inevitable that more unlikely platform- and engine-sharing will happen. Now that the wave of consolidation has ended—Ford and Mazda have announced they are going their separate ways now—you may see very unlikely alliances indeed as the industry deals with supply and margin issues.
   There have already been rumblings about Mercedes-Benz cooperation with Aston Martin; Volvo must look somewhere for a large-car platform if Geely wants to turn it into an even more upscale brand within China; and all sorts of rumours about the platform for the forthcoming Saab 9-2 have been bandied about.
   Given Britain’s own failure in managing its car industry, cries that stick it to Johnny Foreigner have a sour grapes’ tinge to them, but, then, one sees it from the Foreign Office in fact or in fiction:

Tags: , , , , , , , , , , , , , , , , , , , , , , , , , ,
Posted in branding, business, cars, China, culture, design, interests, marketing, Sweden, TV, UK, USA | No Comments »