Opinion

Opinion: Will Chinese car brands succeed in Europe?

Back in 2006, I was standing on the roof of a building in central Shanghai overlooking the Huangpu river. I was on a banking research trip accompanied by some young Chinese bank employees.

As we watched the procession of sand barges sailing inland (China was in the grip of a mega-building boom), the chat turned to Chinese products. “The problem with Westerners,” said one of the Chinese bankers, “is that they won’t buy Chinese goods.”

My British banking friend was quick to reply that over half of what he owned – especially in terms of electronics – was made in China. It wasn’t long before we agreed that the issue was branding. Back in 2006 on that roof, the only Chinese brand we Westerners could think of was the fashion brand Vera Wang, and Vera was born in New York.

In the automotive world, the main Chinese presence in Europe these days is probably MG Motor. The brand was bought from the wreckage of MG Rover in 2005 and is now owned by SAIC Motor, which happens to be based in Shanghai.

It’s tempting to think that the MG brand has been a perfect wrapper for good-value Chinese engineering and one better than using a native Chinese brand.

I suggested this to Brain Gu, vice chairman and president of Xpeng, when we recently talked about the EV brand’s launch in Norway ahead of a planned expansion across other EV-mature European markets.

Fourteen years on from my Shanghai conversation, I could only think of the Huawei smartphone brand, although Gu reminded me of Xaiomi, both of which I have now learnt to pronounce correctly. But buying a smartphone is one thing. Investing in an (especially good-value, it should be said) EV is quite another.

Gu said he was encouraged that Korean brands Kia, Hyundai and Samsung had become extremely well established in Western markets: “We are in this for the long term.”

I have no doubt about the long-term strategic abilities of East Asian companies. Indeed, they could teach European brands a thing or two. But would life not be made easier by creating bespoke names for Western markets?

I don’t underestimate the issue of national pride, but can’t help feeling that selling Chinese products to Western markets might be made easier with fresh and clever branding. It’s a big part of succeeding in saturated Western Markets, especially when time is of the essence.

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