Ford’s decision to buy the Rover brand from its German owner has dealt a blow to the global ambitions of China’s biggest car maker, SAIC Motor Corp., analysts told Reuters on Wednesday.
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Last year, SAIC bought technology for the Rover 75 and Rover 25 platforms from failed British car maker MG Rover and had expressed interest in obtaining rights to the brand from BMW as part of its efforts to go global, the news agency noted.
SAIC reportedly has earmarked $1.71bn to develop and sell its own-brand cars based partly on the Rover technology, targeting both Chinese and overseas markets including Europe.
But Ford, which bought Land Rover from BMW in 2000 and had the right to buy the Rover brand name, announced on Tuesday it would exercise that right, Reuters noted.
“That adds uncertainty to SAIC’s overseas sales plan,” a senior analyst with a major domestic brokerage in Shanghai told the news agency.
But analysts reportedly said SAIC’s failure to obtain the Rover brand by no means dooms its overseas expansion plans – the company’s Chinese joint ventures with General Motors and Volkswagen are performing well, and SAIC said this week that its first own-brand car would roll off the assembly line on 28 November.
According to the report, the China Business News quoted a brief company statement as saying the company would “stick to its current brand strategy”.
However, without a well-known brand to use, SAIC will at the very least have to work harder and spend more money on advertising and promotions to establish a name for its cars abroad, analysts told Reuters.
That could slow SAIC’s expansion into Europe, the report suggested. Company executives told Reuters in April that they would set up a sales company in Europe next year, and sell an annual 45,000 of the automaker’s self-developed cars overseas by 2010.
