Brilliance BMW discussing establishing new own brand

Gasgoo.com (Shanghai May 29) - BMW is currently in discussions with partner Brilliance Automotive to establish a new own brand in China, China Business News reported today. There is speculation that the own brand will only market new energy vehicles, which may make it more likely to gain government approval.

BMW would be the latest of several multinational manufacturers to set up a new brand exclusively for China. Ever since 2008, a slew of Sino-foreign joint ventures have been struggling to come up with own brands, including Guangqi Honda's Everus, SAIC-GM-Wuling's Baojun, Shanghai VW's Tantos, FAW-VW's Kaili and Dongfeng Nissan's Venucia. FAW Toyota, Beijing Hyundai and Guangqi Toyota are also prepping to introduce own brands of their own. Even the proposed Dongfeng Renault joint venture, which hasn't even officially opened for business, has plans for an own brand.

According to statements made by Brilliance's management team, during own brand negotiations beginning a year ago certain members of BMW encouraged Brilliance to further develop its Zhonghua and Jinbei brands. When asked about what a Brilliance BMW own brand would be like, Brilliance Chairman Qi Yumin remarked, "it's not the form [it takes] that's importance, it's the substance that is crucial." Mr. Qi admits that foreign manufacturers do not set up own brands to pass over technology to their Chinese partners. However, he believes that although own brands are established in order to boost manufacturer's global competitiveness, they can still be of aid to Chinese companies.

Regardless, own brands have yet to make good on their lofty expectations. With the exception of SAIC-GM-Wuling's Baojun, which sells around 9,000 vehicles monthly, other own brands have not made any significant strides in the market.

Mr. Qi also has other concerns regarding the issue. The two most serious issues for him are the work associated with build a new brand image and the fact that Chinese brands don't have a lot of say in an own brand partnership. To this end, Brilliance has advocated a global partnership model as an alternative to a traditional JV own brand. BMW has reportedly not declined accepting such a partnership.

"I can't say that a joint venture own brand is incorrect, but if BMW can support us with technology [via] our Zhonghua brand, I believe this method will be more useful," Mr. Qi was quoted as saying.