JV cars come under scrutiny

A model of Everus S1. Photo: CFP

By Li Xiaoshu

The first joint-venture auto brand tailored for Chinese entry-level customers by Guangqi Honda Automobile Co will go for sale in the company's 470 dealerships in early April, according to company sources.

Built on Honda's economy car platform and equipped with engines and transmissions from its Japanese partner, the Everus model, a subcompact named the S1, targets consumers mostly in medium and small-sized cities, said a representative with Guangqi Honda's public relations department.

Yet the company did not disclose prices, which it claimed will be "competitive" since a high percentage of locally produced components will help cut costs.

"The birth of S1 marks the company's transformation from a manufacturing to an automotive enterprise comprised of manufacturing, sales as well as R&D to meet diversified cultural, aesthetic and regional demand," said Yao Yiming, Guangqi Honda's executive vice president.

"The sales goal for Everus will be 30,000 to 50,000 units in 2011."

Indeed, more joint-venture car brands are being created for premium and low-end segments, indicating tougher challenges for China's struggling local brands.

General Motor's joint venture SAIC-GM-Wuling will reportedly start to sell its Baojun-brand cars at the Shanghai Auto Show this month.

Volkswagen and Peugeot Citroën are also considering the creation of a new make with their Chinese partners.

Similar plans are also on the agenda at Ford and Kia's joint ventures, according to media reports.