[SankalpDesai]

Top news this morning - GM launches their China-only Sedan brand - Baojun on August 9, 2011.

The basic idea of launching a 'local' brand is to attract first time car buyers who might be apprehensive going by the International brand way with more expensive cousins. Though GM's luxury brands Buick, Cadillac, etc. are doing good in China, sales seem to be driven mainly from Tier 1 cities. This will also help GM compete with Chinese car manufacturers in their own backyard.

I don't know how logical is this step, as we Indians prefer international brands more than Indian brands. Any Indian company having a Joint Venture or a Technical Collaboration with a foreign partner will not find any difficulties selling its products in our markets. Even toothpaste manufacturers get imported certifications to sell their otherwise-regular-Joe toothpastes, owing to our fascination of anything 'phoren'.

Toyota's step to luanch the Etios brand in India too, can be seen in similar light. During the launch of Liva, the chairman of Toyota India did mention the localization factor and empahsis on making inroads into rural India with it, for numbers.

Several companies will be keenly observing GM's Baojun (means 'Tresured Horse' in Chinese) and replicate the success lessons in other countries.

Baojun - Wikipedia, the free encyclopedia

GM Starts Sales of China-Only Sedan Brand Targeting First-Time Car Buyers - Bloomberg

[SankalpDesai]

With reference to the post above, China-only car brands seem to be catching up. Ford too, gets tempted to try something that would give it a firm footholding in the world's fastest growing automobile market.

Ford eyes China-only brands | The Brunei Times

FORD Motor is in talks with local partners to introduce indigenous brands in China as it plays catch-up in the world's biggest auto market with the likes of General Motors and Volkswagen, its China chief said yesterday.!

Such a move would see Ford join other foreign car makers in launching indigenous China-only brands, in part to comply with government rules that allow them to make cars on the mainland. !

"We are always in discussions with our joint-venture partners," David Schoch, chairman and CEO of Ford's China operations, told Reuters in an interview in Taipei.!

"All I can tell you is we are studying indigenous brands, but our total focus in terms of brand enhancement is really on the Ford brand. "!

China's vehicles market, which includes cars, vans and trucks, will likely expand by around 5 per cent this year and that pace of growth was likely to be sustained over the next few years, Schoch added. !

China's 2011 vehicles sales stood at 18.5 million.!

Ford, which makes its Fiesta, Focus, Mondeo and other sedans in China in a three-way tie-up with Chongqing Changan Automobile Co Ltd and Japan's Mazda Motor Corp, is a relative latecomer in China, where General Motors and Germany's Volkswagen have a sizeable lead. !

It also holds 30 per cent of Jiangling Motors Corp , which makes Ford's Transit vans.!

Typically, China-only brands use older technology that foreign companies no longer use, enabling them to keep vehicle costs lower and at the same time help Chinese partners learn the ropes in developing and marketing modern cars. !

Schoch was speaking after Volkswagen elevated China's status within its sprawling empire and reasserted control over its wayward trucks brands with an extensive overhaul of senior management on Saturday, as it bids for global market dominance.

Ford, which avoided a bankruptcy filing and was the only US auto maker not to take a government bailout in 2009, shipped 519,390 passenger cars, including sedans, sports utility vehicles and multi-purpose vehicles, to dealers in China in 2011, up 7 per cent from a year earlier. !

Reuters