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Brits Cry Foul Over Chinese Car Clones

PHOTO (select to view enlarged photo)
A Hongqi (Red Flag) HQD sedan is displayed during the Fourth China Chungchun International Auto Fair held in the capital city of northeast China's Jilin Province August 14, 2005. China's First Automobile Works (FAW) Group Company was making efforts to forge a luxurious limousine image of Hongqi.

PHOTO (select to view enlarged photo)

PHOTO (select to view enlarged photo)

Brazen copies of western models, even down to the badge, are a growing worry for British Car Makers

London – February 6, 2006: According to The Times, Great Britain’s grand-dame of news dailies, the Chinese are no longer content with cornering the market in sports goods, electrical and DIY products, they are now building one of the worlds biggest car industries based on models that bear more than a passing resemblance to western brands. In fact, states the Times recent story, many of them are indistinguishable, right down to the badge on the bonnet.

According to the Times, “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 has been one of the worst victims, as evidenced by what the Times describes as an “attack of the clones,” when China’s Chery Automobile simply ran blueprints for the Chevrolet 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 last August. Although only a concept car, a production model is predicted to cost about 130,000, compared with 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 at less than half the cost of the Japanese original. Its badge is startling like Audi, minus two of the German brands rings.

In addition, “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. BYDs aping of BMW looks is even more blatant. Its black, white and blue badge is inspired by the German companys and its F6 closely resembles the BMW 7-series.”, said a senior marketing executive at the company last summer.

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 Chinas blatant commandeering of their ideas, they are also understandably wary of making enemies in the worlds 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.”

To make matters worse, even if a foreign company tries to sue a Chinese firm, getting a Chinese judge to rule in its favor appears to be nearly impossible. “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 Times article describes Mercedes-Benz as being philosophical over the issue. “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 its not the same as a fake Rolex. Cars are still fairly sophisticated technology.”

The Times goes on to point out that “established car makers cannot afford to be complacent. Backed by cheap state capital and with low-cost labor, 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).”

Marc J. Rauch – TACH Auto Central