Geely, BAIC target foreign brands
- Source: Ce.cn
- [09:32 September 14 2009]
- Comments
"This is a great opportunity for us to partner up with a brand (Saab) that we believe has a great future with a new business plan and new ownership," Wang Dazong, general manager of Beijing Auto, said in a statement posted on its website.
Chinese carmakers have failed in their ambitions before. In January, 2006, Geely's Li displayed the 7151CK sedan at the Detroit car show and promised the car would be on US roads by 2008. The exports never came. Chery Automobile Co, China's largest maker of own-brand cars, has also delayed plans to enter developed markets.
SAIC's failure
SAIC Motor Corp, China's biggest domestic automaker, bought control of South Korea's Ssangyong Motor Co, only to have the unit go into receivership after SUV sales plunged. Tengzhong's application to buy GM's Hummer has been sent back, China's government said this week.
Following a similar strategy as the Chinese carmakers, Tata Motors Ltd, India's largest truckmaker bought Ford's UK-based Jaguar and Land Rover brands last year. Sales of luxury vehicles plunged due to the global recession and the units had a pretax loss of 281 million pounds ($465 million) in the 10-month period ending March.
"There are more disadvantages than benefits for Geely to buy Volvo," said Lin Huaibin, analyst at IHS Global Insight. "They don't have the capability to manage an international company nor the experience to deal with unions overseas."
Geely earlier this year unveiled the EC718 sedan, its first model specifically designed for European markets. The car, priced from 80,000 yuan ($11,700) to 120,000 yuan domestically, still needs to win certification to be sold in Europe.
Geely has also bought a stake in Manganese Bronze Holdings Plc and set up a Shanghai venture with the London-cab maker that is shipping cars to countries including Saudi Arabia, Turkey and Spain.
(China Daily)
