just-auto.com

CHINA: GM JV eyes more own brand models

By just-auto.com editorial team | 21 April 2011

As a trend towards Chinese automakers' joint ventures with foreign automakers developing new own brands to target new markets - particularly the 'tier 3 and tier 4 inland cities - gathers pace, one of GM's is already talking expansion.

SAIC-GM-Wuling's Baojun brand isn't yet launched but have said they are eyeing other models beyond the initial 630 small car.

Introducing the Baojun brand is a key element in GM's plans to double sales in China, its single largest market, over the next five years, Reuters reported.

The low-cost brand targets the fast-growing market for new cars in smaller Chinese cities where first-time buyers are buying small models priced under US$10,000.

Baojun will compete against Chinese domestic rivals such as Chery, Geely and Warren Buffet-backed BYD.

GM estimates annual sales in the low end of China's market at around 5mvehicles, making it larger than the market for cars in France and Britain combined, the report said.

Baojun 630 sales begin within months.

One executive said the next step could be a version of the axed Chevy Spark minicar redone for Baojun using its established Chinese model name, the Lechi.

"We haven't officially announced the transition of (Lechi) to (Baojun)," Shanghai-GM-Wuling vice president Matt Tsien told Reuters during a plant tour in southern China.

Shanghai-GM-Wuling began making the Spark in late 2003.

Other automakers introducing local brands include Nissan and Honda, PSA Peugeot Citroen plans one and BMW's chief executive said last month the automaker was in talks for a local brand. Ford and Hyundai are likely to follow, too.

Some analysts have warned that local brands like Baojun could eventually become threats to their parent brands if they compete more against established models.