Chinese car makers face road blocks

CHINESE car makers seem to be driving into road blocks in trying to exhibit their models at international auto shows, and industry watchers have said this could be due to a perceived gap in standards and quality between the domestic auto industry and their global peers.

For example, China's Brilliance Auto is the only car maker to display a complete product line-up at the 62nd Frankfurt Motor Show, which opens tomorrow - one of the top five international auto exhibitions.

What a contrast compared to two years ago when four Chinese car makers, including Geely automobile Co Ltd and Jiangling Automobile Co Ltd, appeared at the same show.

Then Geely provided an eye-catching performance with models dressed in costumes of traditional Chinese characters from the Four Beauties and Monkey King classics to announce in a big bang the arrival of price-competitive Chinese-made models in the European market.

This time around, officials from Geely, China's leading private car maker, said they dropped an earlier plan to take part in this year's motor show because the exhibition hall is not ideal.

"We were disappointed when we were arranged to share the exhibition area with some unknown auto part makers," the official, who preferred not to be named, complained.

"We paid a lot of attention to the display hall, especially for an A-class auto show, as a way to help build brand image before we launch a marketing campaign to enter the European market."

Brilliance, the car making partner of BMW AG in China, was allowed to set up their platform in the same exhibition hall with Toyota and PSA Peugeot Citroen for this year's show.

It booked the area through its European dealer HSO and would display its mainstream Zunchi and Junjie sedans, M3 coupe and a brand-new small-engine cars.

A senior official at a Chinese car maker, who did not want to be named, said he believed various hurdles are in the way of their participation.

These road blocks include domestic models failing crash tests and also perceived impression of poor quality of Chinese-made cars which are then exploited by the foreign media.

In addition, the huge investment needed to take part in such shows also prompted Chinese car makers to be more cautious in their participation, he added.

Another shadow that has cast a dark cloud on possible participation by Chinese car makers revolve around Shuanghuan Auto. The firm had planned to exhibit its two controversial models at the Frankfurt show but withdrew after strong opposition and threats of a lawsuit from German rivals for alleged patent infringement.

Both DaimlerChrysler and BMW threatened to take legal action against Shuanghuan's Noble subcompact and CEO sport utility vehicles for allegedly copying the design of Mercedes-Benz's Smart Fortwo and BMW's previous generation of X5 SUV.

Some industry analysts also said there could be a move by overseas car makers to bar Chinese models out of their markets as they fear the low-pricing strategy would harm their market domination.

Media reports said the Noble is expected to cost about 7,000 euros - the lowest price for a small car on the German market.

Shuanghuan exports the CEO to eastern European markets as well as African countries.

It also signed contracts with dealers in Italy to export 2,000 CEOs in addition to 1,000 Nobles in the near future if the controversial models could pass relevant tests.

But the dispute with global counterparts is casting a shadow on the car maker's sales strategy and may even prompt Shuanghuan to promise to sell the CEO only in Asia and Africa while the Noble will be sold only in China.

"They (the CEO and Noble) really share similarities in body design with its overseas counterparts. The weakness (in design) is used by overseas parties to block Chinese cars while Chinese producers have been long criticized for lacking intellectual property rights protection," said an industry analyst.

"To build up an up-scale car brand on the international markets rather than just make a copycat, Chinese car makers need more efforts to improve research and development capability," he said.