2 China Car Brands Set for Renaissance? “上海”和“红旗”汽车将重出江湖
A couple of reports in the China Daily this morning are saying that 2 iconic Chinese car nameplates, the Shanghai and Hongqi brands, could both be poised for comebacks soon in what looks like an interesting new prospect for the domestic auto market. If they go ahead with the plans, the reintroductions of Shanghai brand autos by SAIC (Shanghai: 600104), and Hongqi cars by FAW Auto could actually stand a reasonable chance of success, banking on nostalgia among Chinese consumers and both companies’ growing expertise at making dependable cars with solid demand after years of working with foreign partners. According to the China Daily, SAIC listed a Shanghai brand model in a recent catalog, and a company insider confirmed plans to revive the brand, which ceased production in 1991 as China’s largest automaker focused its energies on its 2 main joint ventures, one with GM (NYSE: GM) and the other with Volkswagen (Frankfurt: VOWG). (English article) Meantime, FAW is moving ahead with a 1.8 billion yuan plan of its own to develop a high-end Hongqi model that should go into volume production at the end of this year, with annual production set to rise to 30,000 units next year. (English article) The Shanghai-brand models sound aimed at the middle of the market, while the Hongqi — once considered China’s premier auto brand — is clearly aimed at the booming market for luxury cars. So the question becomes: are Chinese consumers prepared to spend the same money they usually reserve for big foreign names on domestic brands? My answer would be a “yes”, but only if they play their cards right, which could be a tricky proposition. A key element to success would be the nostalgia factor, meaning the companies would have to build a strong element of history into any marketing campaigns for the relaunch of these 2 brands — not something that either company has much experience in. Secondly, both companies will have to build models that are equally reliable and attractive to offerings from their foreign-branded joint ventures, and probably price them 10-20 percent below such comparable models. Again, this should be possible, but it will also require some effort and risk taking. Still, I’m cautiously optimistic that both of these initiatives could stand a chance for some reasonable success in the next 1-2 years, providing some refreshing and interesting new alternatives for a China auto market now dominated at the middle- and upper ends by big-name foreign brands.
Bottom line: Relaunches of the Shanghai and Hongqi auto brands could succeed if their manufacturers design interesting models and use the nostalgia factor in their marketing.
Related postings 相关文章:
◙ Chery Finds Foreign Partner in Jaguar 奇瑞与捷豹路虎联姻前景堪忧
◙ Cars: US, Germany Clobber Japan, Domestic Rivals 美德汽车在华完胜日本和中国车商
◙ China Slams the Brakes on Automakers 中国为汽车行业踩刹车
