Business / Auto China

Borgward charts new journey to respectability in Chinese market

By Li Fusheng (China Daily) Updated: 2016-03-21 09:35

Borgward charts new journey to respectability in Chinese market

Urich Walker, CEO of Borgward Group AG, says he is confident Borgward will return to the upper ranks of the automobile industry within 10 years. [Photo provided to China Daily]

German auto brand Borgward has embarked upon a road to restore its former glory, with its starting point the Chinese market and a leader familiar with the world's second-largest economy.

Created in Bremen, the brand in its heyday had more than 23,000 people in its production halls and rolled out more than 1 million vehicles between 1924 and 1961. In the 1950s, it was the third-largest automaker in Germany. The company has its headquarters in Stuttgart.

"I am certain that Borgward has a very good chance to return to the very top levels of the automobile industry within 10 years," said Urich Walker, CEO of Borgward Group AG, on the opening day of the brand's China branch on March 9. Walker was chairman and CEO of Daimler Northeast Asia in Beijing from 2006 to 2013.

The industry veteran's confidence comes from his belief that the brand can meet the desire of Chinese customers for quality products at prices more affordable than other German auto brands.

"The Chinese market is therefore set to remain the biggest driver of growth in the automobile market," Walker said.

"We are seeing the development of a broad middle class that wants 'accessible premium' vehicles. And that's exactly where we will begin."

The brand will launch in the Chinese market at the Beijing auto show in April with a mid-sized SUV model called the BX7. Made in its Beijing plant, the vehicle is taller and wider than many popular models in the segment, including the Audi Q5, Volkswagen Tiguan and Toyota RV4.

Kevin Chen, Borgward China's sales chief, believes the SUV segment is the ideal place to reestablish the company in China, saying a compact SUV, the BX5, will be released on the market later this year.

"For the hotel industry, you have three words: 'location, location, location'. For us, it is also three words: 'segment, segment, segment'," Chen said.

SUVs are the most popular vehicles in China. In February, 478,000 such vehicles were sold, a 44-percent surge year-on-year and a continuation of the sales momentum seen last year, according to the China Association of Automobile Manufacturers.

Chen said the brand will roll out at least two models a year to begin and add MPVs and sedans into its portfolio when it gains a foothold in the Chinese market.

Borgward has built a sales network of around 100 dealerships and expects that number to reach 120 by the end of the year.

Chen said there is huge potential in China where there are only 85 vehicles per 1,000 people. "It's hard to believe that figure is 187 even in Thailand," he said.

China is the starting point of the brand's revival but not its sole market. Walker said the company is preparing to set up a branch in India and will gradually expand into other emerging markets including Russia, Brazil and Middle East countries, where German products are welcome.

In its home base of Europe, the brand will offer only new-energy vehicles including plug-in hybrids and electric vehicles.

Walker said the brand's goal is to be among the first European automakers to combine environmental friendliness with cost-efficiency.

Globally, Borgward has set a medium-term goal of more than 500,000 units a year. "This target is realistic," said Walker.


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