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Chinese Automakers use UK as Testing Ground in Europe

22 March 2012 - Automotive News

Chinese Automakers use UK as Testing Ground in Europe

Geely Automobile and Great Wall Motor will launch inexpensive cars in the UK this year because the companies believe they can benefit from growing demand for low-cost models during tough economic times.

The Chinese brands also want to take advantage of a move upscale by South Korea's Hyundai and Kia.

Past attempts by Chinese automakers such as Brilliance and Landwind to gain a foothold in Europe failed when their vehicles received poor ratings in safety tests.

This time, the newcomers are making sure their cars meet Western safety standards. Geely's Emgrand EC7 compact model recently earned four out of five stars in a crash test by safety organization EuroNCAP.

The Emgrand EC7 will go on sale in the UK by the end of the year. It is similar in size to the Hyundai i30 but prices will start at 10,000 pounds (about 11,800 euros) compared with 13,780 pounds for the i30.

Great Wall will launch its Steed double-cab pickup in the UK this month (March) through a network of 35 dealers. The Steed will cost 13,998 pounds for the standard model, compared with 16,049 pounds for the entry version of the market leader, the Mitsubishi L200 double-cab.

Value for money

"People are looking for a value-for-money brand, a lower cost option. In the UK automotive market, there's no one occupying that area anymore," Matthew Cheyne, Geely Auto UK market development director, told Automotive News Europe.

Paul Hegarty, managing director of Great Wall UK, said a move upscale by the Hyundai and Kia had created a gap. He said the UK is "quite a receptive market" for new brands.

Great Wall has been importing vehicles into Italy since 2006 and started production in February in a new Bulgarian factory that will have an annual capacity of 50,000 units by 2013.

Hegarty said Great Wall is focusing on customer experience instead of high showroom standards for its UK dealers. One innovation is to offer test drives at the potential buyer's home or workplace.

A similar customer-friendly approach is planned by Geely, which has a link to the UK market through its 20 percent ownership of London black cab company Manganese Bronze.

"We hope to deliver a slightly different customer proposition," Cheyne said. "Dealers will generally be small independently owned businesses that are on first name terms with their customers."

Geely is looking to establish a UK network of 30 to 40 dealers. It says its UK sales operations will be separate from those of Volvo Car Corp., which Geely bought from Ford in 2010.

Expanding lineup

Great Wall and Geely both plan to expand their UK lineups.

Hegarty said he will "definitely" import the H6 Hover medium SUV. Cheyne said Geely will be looking to introduce a subcompact car and SUVs.

Both automakers are following MG Motor, which launched its first China-developed car, the MG6 compact, in the UK last year. The MG6 is built in Longbridge, England.

MG parent SAIC is investing heavily to give MG a wide product lineup targeted at Europe, including the MG3 small hatchback, MG5 compact and an SUV-style crossover to rival the Nissan Qashqai.

Shanghai-based SAIC inherited the Longbridge plant through its 2007 merger with Nanjing Automobile, which had bought the site after MG Rover, Britain's biggest domestic carmaker, collapsed.

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