Chinese automakers SAIC, Geely turn up heat on global rivals

Mon Apr 17, 2017 11:23am EDT
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By Joseph White and Norihiko Shirouzu

SHANGHAI (Reuters) - Global automakers face fresh threats to their profits in China from domestic automakers SAIC and Geely, which are launching new models and marketing strategies to challenge better-known foreign brands in the world's largest car market.

The country's biggest automaker, Shanghai Automotive Industry Corp (SAIC), wants to double sales of its fully owned domestic brands this year - albeit from a low base - executives told a group of reporters on Monday.

"China success is the base of overseas market success," said Zhang Liang, product portfolio planning director for SAIC Motor's passenger vehicles operation.

Zhang said SAIC's MG and Roewe - brands based on technology acquired from bankrupt British car maker MG Rover - plan a total of five car models and nine sport utility vehicles, and would aim to offer quality comparable to global brands such as Nissan, but at a lower price.

A concept shown to reporters for an MG sports coupe it will exhibit at this week's Shanghai auto show could pass for a Jaguar.

"I worry for them," Zhang said of the global brands. "You see local technology getting stronger and stronger."

SAIC, controlled by Shanghai's municipal government, has toiled for years in the shadow of its foreign partners, Volkswagen AG VOWG_p.DE and General Motors Co GM.N, who are obliged by Beijing to form joint ventures with a local automaker for their China operations.

Those two joint ventures accounted for about 16.5 percent of the Chinese passenger car market last year, compared with just 1.3 percent share for SAIC's own brands.   Continued...

FILE PHOTO: A worker walks past a lighted signage of the Shanghai Automotive Industry Corporation (SAIC) before the opening of the 15th Shanghai International Automobile Industry Exhibition in Shanghai in this April 19, 2013 file photo.  REUTERS/Carlos Barria/File Photo