The National - A car enthusiast would immediately identify the metallic grey saloon sitting on a dealer’s forecourt in southern Beijing: it is the old-model Honda City.
Yet Honda’s easily recognisable “H” badge is nowhere in sight. Instead, an all-new logo hangs from the grille, one that has been created thanks to a new Chinese government strategy to help struggling domestic car makers.
This is the S1, launched last year as the first model from Everus,a new China-only brand set up by Guangqi Honda, a long-standing joint venture in China between Honda and Guangzhou Automobile Industry Group that last year sold 362,000 vehicles.
It is not only Guangqi Honda that has just launched a brand solely for China.
Dongfeng Honda, the Japanese car maker’s other Chinese joint venture, has unveiled its Ciimo nameplate, which is offering a previous generation Honda Civic for prices starting at 111,800 yuan (Dh64,620), nearly 20 per cent less than the car sold for as a Honda.
Similarly, last year General Motors launched its Baojun brand through a joint venture, and its 630 saloon, a largely redesigned car, is proving popular with more than 6,000 sales in April.
Nissan is getting in on the act, unveiling its D50 model under the Venucia brand, started with Dongfeng. The D50 is a restyled old-model Nissan Tiida and prices start at a keen 67,800 yuan.
While foreign car makers manufacturing in China have long had to set up joint ventures with Chinese companies, these China-only brands represent a new trend, one the authorities are encouraging.
“Many of our competitors that have not launched a dedicated brand have had the brakes put on their plans to develop manufacturing,” Maxime Picat, the head of Peugeot-Citroen’s joint venture in China, which is also setting up a China-only brand, told AFP this year.
The Chinese authorities hope these China-only brands will speed the transfer of technology from foreign car firms to their Chinese partners. The new brand, rather than the foreign partner, now owns the technology.
Chinese partners, as well as being part of one or more joint ventures, typically also produce vehicles under their own brands and what they gain from overseas collaborators they can incorporate into their own research and development programmes.
Until now, says Klaus Paur, the global head of automotive for the research company Ipsos, there has been little technology transfer through the foreign-branded joint ventures, much to the concern of the authorities.
The joint ventures have been “extremely successful in the market” but the technology has “very much stayed in the hands of the international brands”.
“The Chinese partner is providing the distribution network and the production facilities but the [intellectual] property rights remain with the international brands,” says Mr Paur.
This is no accident, since there are risks for a foreign car maker in giving a Chinese partner technology.
Following a well-worn path in other industries, partners can use their new-found expertise to produce upgraded products of their own and ultimately compete with their foreign collaborator both at home and abroad.
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