Posts tagged ‘Shanghai’


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 »


Shanghai, 1987 v. 2013

05.11.2014

Originally on my Tumblog, but the graphic wouldn’t fit properly with the template.

Amazing. There’s an entire generation who will have no concept of Shanghai being a city without skyscrapers.

Tags: , , , ,
Posted in China | No Comments »


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 »


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 »


Volvo unveils its China strategy

26.02.2011

Volvo press conference

Volvo has announced that it will build a plant in China, and seeks approval for a second, in what it calls its second home market.
   It was inevitable, though for the long-term survival of the brand, it’s not a bad idea.
   Through Geely’s acquisition, it can potentially leapfrog other foreign car brands inside China by having more than a domestic partner: a domestic owner.
   There won’t be much toing and froing as Geely can call the shots with Communist Party authorities.
   The company already has a technology centre in Shanghai to deal with design, purchasing and manufacturing decisions.
   The new Chengdu plant, says Volvo, will only build Volvo cars—there will be no Geelys going through there.
   Volvo also says it will not affect jobs in Europe, which can be believed at this stage: the plant should be sufficient to deal with growth in China and the eastern hemisphere, where Volvo could be a lot stronger.
   While Volvophiles won’t be upset about most of the developments above, there will be one that will concern them.
   The company says that Volvo Car China’s new-product development will be done in Shanghai, not Göteborg. Göteborg will take the lead on hybrid and electric cars globally.
   Given the volumes involved—Volvo is targeting 200,000 cars per annum by 2015 in China—I’m not sure if it means that China will get its own range of cars. The likely scenario is that there will be a single, global range at these numbers.
   So how will the balance of global Volvo NPD be shared between Göteborg and Shanghai?
   Volvo suggests that HQ remains in Sweden on one hand, but, according to Freeman Shen, senior vice-president and chairman of Volvo Cars China Operations, says, ‘The Volvo Car China Technology Centre in Shanghai will develop into a complete product development organization on an international level. It will have the competence and capacity to work together with the HQ in Sweden, participating in Volvo Car Corporation’s work process for developing entirely new models,’ says Freeman Shen.
   I’m not criticizing Geely’s competences because if you look at its latest models, the company has certainly come a long way. Chinese designers, if nothing else, are fast learners, and knock-offs are becoming things of the past if 2010’s new models are anything to go by.
   And as a Swede is heading over to China to help set up the plant, one envisages that similar training in the Volvo design and creative process will be in the offing.
   Otherwise, there won’t be much separating Volvos from other car lines with the exception of a grille with a diagonal bar.
   But the press conference still leaves questions unanswered about how the NPD process will work.
   Nevertheless, allowing Volvo to pursue innovation is good news. Ford permitted it to happen but so much platform development was done elsewhere. Volvo remained in charge of global safety for Ford models, and gave the old S80 platform to a variety of cars, including the current and previous Taurus.
   The difference is, the parent company’s platforms weren’t half bad to begin with. I’m not so sure about Geely’s.
   I do, however, like the idea of an innovative, world-first Volvo that can get its new developments in safety and alternative energies out to the market before the competition. No more will the firsts be moderated by Dearborn.
   Innovation has not deserted the company—it has announced a V60 diesel plug-in hybrid—but we will not know what the new Volvo will look like till a model, with no Ford heritage, surfaces in a few years. That will be an interesting development.
   Geely chairman Li Shufu says, ‘We continue to uphold our principle that Geely is Geely and Volvo is Volvo. A more globalized, more focused luxury brand will turn our vision of a growing and profitable Volvo Car Corporation into reality. The company will continue to contribute to the development of the global automotive industry by introducing world-first innovations that make an outstanding brand win in the market-place.’

That doesn’t really settle it though.
   I have some concerns with Mr Li’s market positioning, because there are Swedes, indeed many Europeans, who don’t see Volvo as a luxury brand.
   Thanks to Ford, Volvo was edged upmarket to avoid competition with its own models—but it means its market share at home has been severely reduced.
   Earlier this century, most Swedish taxicabs were Volvos—today Mercedes-Benz and Toyota serve a proportion of the local market as Volvo could not offer the smaller models it once did.
   And if its home market share continues to decline, never mind how China goes: Volvo will be increasingly inaccessible to first-time car buyers in Sweden. Its need, then, to retain brand values might be weakened.
   Speaking hypothetically, if these world-first innovations are created merely for luxury models, then how long will they take to get to the everyday market?
   I remember an era when Volvo didn’t skimp on safety and innovations for even its lowliest models. And Volvo-as-luxury seems to fly in the face of that.
   The reality is, if Volvo is going to find more volume in the orient, then the luxury positioning will be more dominant.
   It’s going to be easy to foresee Volvos going all over the east from the Chinese plant, to allow for greater profits. Renault and Peugeot are sourcing from plants in Korea and Malaysia to serve the eastern hemisphere, and as far afield as eastern Europe, at more reasonable prices. It would not be a bad idea for Volvo to follow suit: it’s not in the hallowed realms of BMW, and its pricing needs to reflect that.

Tags: , , , , , , , , , , , , , , , , , ,
Posted in branding, business, cars, China, culture, design, marketing, Sweden, technology | No 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 »