Roewe setting the pace for refined domestic cars

Updated: 2012-06-18 14:43

By Han Tianyang (China Daily)

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Roewe setting the pace for refined domestic cars

As foreign brands invade China's entry-level, low-priced car market, domestic automakers are moving in the other direction to build more expensive vehicles and improve their brand image.

Shanghai-based SAIC Motor's Roewe 950 is the most recent example. The car's flagship version with 3.0-liter engine has a tag price of 320,000 yuan, a new high for homegrown products.

The large, executive sedan with length of nearly 5 meters and refined interior was designed to win over entrepreneur and government customers who often buy cars made at Sino-foreign joint ventures - such as the Volkswagen Passat and Magotan, Toyota Camry, Honda Accord, Nissan Teana, Ford Mondeo and Skoda Superb - that have long dominated the so called B-plus market, or the high-level medium-sized segment.

The model is based on a platform by General Motors, a partner of SAIC, and shares the same powertrains with the US automaker. Its development has taken more than three years and an investment of about 1.8 billion yuan, the company said.

Launched in April, the car has already been ordered by government and company clients, SAIC said.

The Roewe 950 is an important step for the wholly owned brand of SAIC because its success will help improve the brand image and benefit all other products under the nameplate, analysts said.

SAIC also makes the Roewe W5 SUV and the 750, 550, 350 cars that cover different market segments in terms of size and price. It has also another wholly owned marquee, the MG.

Since the company rolled out its first Roewe model in 2006, it has continued its strategy of making products for the medium and high-end market, territory dominated by foreign brands.

The strategy has proven effective. SAIC's Roewe is now one of the most recognized brands among domestic carmakers.

While most homegrown brands have suffered in the stagnant market this year, combined sales of Roewe and MG registered double-digit growth and their market share is increasing, the firm said.

Statistics from the China Association of Automobile Manufactures show the market share of domestic brand passenger vehicles in the first four months this year declined by 3.2 percentage points from a year earlier as the overall passenger vehicle market edged up only 1.9 percent.

Beijing-based BAIC Group also has plans to build more advanced models. Based on Saab technologies it acquired in 2009, its first medium-sized sedan C70G will hit the market in the fourth quarter this year, said recent media reports.

Also targeting the upper market, FAW Group is preparing to revive its Hongqi brand.

Yet industry observers warned that the way up for domestic brands won't be easy due to their short presence in the industry and the increasingly fierce market competition.

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