driving.timesonline.co.uk/article/0,,22750-2012852,00.html
The Times and The Sunday Times electronic paper The Times and The Sunday Times electronic paper Driving Times Online January 29, 2006 Invasion of the Chinese clones Brazen copies of western models, even down to the badge, are a growing worry for our car makers, say Jay Nagley and Emma Smith of The Sunday Times Not content with cornering the market in sports goods, electrical and DIY products, the Chinese are building one of the world's biggest car industries based on models that bear more than a passing resemblance to western brands. In fact many of them are indistinguishable, right down to the badge on the bonnet. Chinese technicians have become so skilled at reverse engineering that their western counterparts have to look closely to tell the difference. This could be good news for consumers, bringing the prospect of half-price vehicles. But it's bad news for the car companies that have invested time and money establishing brands only to see them duplicated. General Motors was one of the first to suffer an attack of the clones when China's Chery Automobile apparently ran blueprints for the Daewoo (now renamed Chevrolet for the European market) Matiz through a photocopier to come up with its QQ. "A Matiz door can fit on a QQ and a QQ bonnet fits on the Matiz," a GM spokesman said. The Hongqi (Red Flag) HQD, a cheap rip-off of the Rolls-Royce Phantom, was unveiled at the Chinese motor show in August. Although only a concept car, a production model is predicted to cost about -L-130,000, compared with -L-216,950 for the Phantom. Other copycats include the Shuanghuan Laibao SRV, which appears to be a recycled version of the Honda CR-V but with a -L-6,700 pricetag -- less than half the cost of the Japanese original. Its badge looks borrowed from Audi, minus two of the German brand's rings. Great Wall Automobile has been accused of copying the Nissan Frontier pick-up with its Sing SUVs, and a company called Geely, based in Hangzhou in eastern China, appears to have chopped the front and rear off a Mercedes C-class and welded them into a compact car called the Merrie. Its black, white and blue badge is "inspired" by the German company's and its F6 closely resembles the BMW 7-series. What began as a minor irritation is to become a major commercial headache as China prepares to sell its cars to the West. Towards the end of last year the JiangLing Landwind SUV became the first Chinese car to be marketed in Europe. It is uncannily similar to the Vauxhall Frontera, which ceased production at the end of 2003. we have our own design teams," said a senior marketing executive at the company last summer. JiangLing has agreed to make adjustments to improve the vehicle's safety after the ADAC, the German equivalent of the Automobile Association, subjected the Landwind to crash tests with results that it described as "catastrophic". Safety flaws notwithstanding, European manufacturers fear it is only a matter of time before customers can take advantage of the Landwind's enviable -L-10,000--L-12,000 pricetag. Great Wall Automobile is set to launch its Hover SUV and Deer pick-up in Europe this year. Like JiangLing, it will initially use a loophole in the law to bypass rigorous crash tests: there are exemptions designed to help low-volume producers and manufacturers of commercial vehicles. While western car makers may be horrified by China's blatant commandeering of their ideas, they are also understandably wary of making enemies in the world's fastest growing car market. Every major car company is desperate to get a slice of the Chinese sales boom. To do this the Chinese government usually requires them to form an alliance with a Chinese company and, although the communist regime may be embracing capitalism, all large investments have to be cleared by the authorities. Even if a foreign company decides to sue a Chinese firm, getting a Chinese judge to rule in its favour is not easy. Honda is embroiled in a case against Shuanghuan Auto over the Laibao SRV but has already had to fend off a counter- suit from the Chinese firm. Toyota failed to win a case against Geely in 2003 for copying its logo. There were indications of a change of attitude when last month Honda won a ruling that bars Chongqing Lifan Industrial from selling motorcycles under the Hongda name. The controversy over the QQ has been settled between Chery and General Motors with "a gentleman's agreement" and Chery has cancelled plans to launch its Matiz in the US. "There is no chance of that car being sold out of China and encroaching on our business," said Denis Chick, a GM spokesman in the UK. "Imitation is the sincerest form of flattery," said Rob Halloway, a spokesman. "The difference between a copy and a genuine Mercedes-Benz should be clear to see -- it's not the same as a fake Rolex. But established car makers cannot afford to be complacent. Backed by cheap state capital and with low-cost labour, Chinese firms can cut European prices by half and many plan to double or even quadruple output within just a few years. Chery has ambitious (although some say not entirely realistic) plans to export up to 250,000 vehicles to the US by 2008 (its total current output is about 80,000 vehicles a year). "In the future it will be private Chinese companies that rule the industry, " Li Shufu, Geely's chairman, said in a recent interview. The profits from the sales of this first generation of Chinese copycats could well be used to finance a new range of designs, posing an even greater menace to their European counterparts. Brilliance, one of China's largest car companies, is upgrading its Zhonghua luxury saloon -- a potential rival to its European partner BMW -- to include air-conditioning and a state-of-the-art sound system, with plans to sell to Europe by 2008 for as little as -L-13,000.
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