The Truth About Cars » Venucia The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Sun, 27 Jul 2014 14:03:49 +0000 en-US hourly 1 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Venucia GM Invests More Into Fake Chinese Brand Mon, 19 Nov 2012 11:56:48 +0000

GM added more capacity to its Chinese Baojun brand by opening a factory in Liuzhou, southern China. Plant and brand are part of the SAIC GM Wuling joint venture, where GM holds 44 percent, SAIC 50 percent, with 6 percent held by Wuling.

Baojun started with the Baojun 630, a compact sedan based on an older Buick Excelle/Daewoo Lancetti platform, later the Le Chi was added, a rebadged Chevrolet Spark. By 2015, Baojun wants to have a total of five models, Reuters says.

Baojun is one of China’s joint venture brands, which we at TTAC like to call “fake Chinese brands.” They started with the Chinese government strongly suggesting that joint ventures launch brands with Chinese identity. Allegedly, this was to produce lower cost cars for the masses, the true intent was to bring technology into Chinese hands. GM was among the first to salute and to do as the Chinese government desired. GM was followed by others such as Nissan (Venucia), and Everus (Honda).  Some companies, notably Toyota, were dragging their feet and questioned the need for a dedicated brand to target the low cost segment. Even Toyota finally caved in and will launch a fake Chinese brand with joint venture partner FAW next year. The Chinese by the way insist on calling these brands “sub-brands”, despite Baojun being  as standalone a brand as Buick.

The joint venture brands saw mixed success. Much to the chagrin of Chinese planners, the foreigners only handed outdated technology down to the joint venture brands. The Baojun brand saw sales as high as 9000 in January, in September, it was down to 6,000 units. Nissan’s Venucia brand likewise saw encouraging sales initially, which soon petered off.

On Matt Gasnier’s list of best-selling cars in China, the Baojun 630 ranked 46th in October 2012.

Brands with a Chinese identity sound like a good idea to protect against the sudden ill will against Japanese products, but it did not work out that way:  Sales of Nissan’s Venucia brand more than halved from August to September, while sales of Baojuns rose from some 4,000 in August to over 6,000 in September: Chinese car buyers are not stupid, and are well-informed Internet users. They know exactly that a Venucia is a last generation Nissan Tiida.

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Why Foreigners Create Chinese Brands, Explained Using Nissan And Venucia Wed, 06 Jun 2012 14:25:58 +0000

Dongfeng-Nissan President Kimiyasu Nakamura watches Yao Bin, Huang Kai Fong, and Ye Lei

Yesterday, Nissan’s affable China president Kimiyasu Nakamura brought a Chinese delegation home to Yokohama, to explain to a largely skeptical Japanese press why Nissan had started a new brand in China with joint venture partner Dongfeng.  The brand goes by the name of Venucia. Nissan is not the only one doing that. Nearly every foreign joint venture partner in China either has established a Chinese brand in China, or is intensively thinking about it.

Curiously, the trend of  foreign joint ventures making Chinese cars had been started by GM, which announced its Baojun brand in 2010.  This was quickly followed by Nissan and Venucia. Pretty soon, it became known that these branding exercises had not been totally voluntary.  The Chinese government strongly suggested to all joint ventures that it would be a great idea to launch an independent Chinese brand that is owned by the joint venture. There is no law that requires this, but foreigners quickly realize that is is in their best interest to play along.

When it comes to new energy cars that are supposed to benefit from Chinese subsidies, then the car absolutely must be built and sold under a Chinese brand, Nissan’s CEO Carlos Ghosn said at this year’s Beijing Auto Show. Nissan’s Leaf will be a Venucia when it comes to China.

Except for the cut and dry subsidy issue, the overarching reason for these pseudo Chinese brands is not completely clear.

Officially, it is supposed to make the car more affordable. Lower cost cars definitely are the key to China’s expanding market, as cars morph from toys for the rich to transport for the masses. However, foreign makers privately had long argued that one does not need a new brand to make an affordable car, as the Jetta and Santana vividly illustrate in China. Actually, to seriously launch a new brand can be quite costly.

Conspiracy buffs argued that the insidious Chinese are trying to grab valuable IP with that scheme. Foreign joint venture  partners snicker at that idea. The cars they introduce under the Chinese brands typically are based on previous-gen platforms. And electric cars? “How much protectable IP is in the concept of rigging electric motor to a battery?” the R&D chief of a Japanese carmaker had quipped last year.

Sales and market share passenger vehicles in China by brand nationality, January-April 2012

Country Units Share
Japan 948,000 18.8%
Germany 868,300 17.2%
USA 553,900 11.0%
Korea 399,800 7.9%
France 142,100 2.8%
Total foreign 2,912,100 57.7%
Chinese 2,137,000 42.3%
Total 5,049,100
(Source: CAAM.)

More and more, it appears as if it is a grand whitewashing exercise. The market share of indigenous brands is anywhere between 30 and 40 percent, depending on who you ask and how the counting is performed. All agree that the market share of indigenous brands is sinking. “Despite a massive local presence, the domestic car industry is steadily losing market share,” wrote state-owned  Xinhua in April.

It pains the patriotic pride when that happens. On the other hand, Chinese partners of joint ventures with foreign carmakers are nearly all state owned enterprises, whereas domestic brands are often in the hands of small and medium sized independents. The government would shoot itself in both feet would it favor the independents.

New “Chinese” brands.Developing table

Studying indigenous brands.
GM Baoyun (with SAIC and Wuling)
Daimler Denza (with BYD)
Studying new energy brand
Honda CIIMO (with Dongfeng)
Nissan Venucia (with Dongfeng)
Volvo Plans new brand (with Geely)
Kia Dian Yue (with Dongfeng)
Hyundai Shou Wang (with BAIC)
Planning two new energy brands
Volkswagen Tantos  (with SAIC)
Volkswagen Kaili (with FAW)

Instead, a Chinese solution was found. The strong joint ventures create Chinese brands that hopefully make the domestic brand statistics look better as time goes on, and at the same time, both laowei and Chinese SOEs keep their lines busy. The foreigners can recycle old platforms and tools that otherwise would have been scrapped. The Chinese can be proud that they don’t have to pay license fees for a brand, something that goes against the grain of a Chinese anyway.  The foreigners more or less happily play along.

Nissan said yesterday that it sold 7,700 Venucia D50 in the first month after its 4/23/2012 launch, which is “a good start,” as Chris Keeffe of Nissan put it.  Venucia outsold the Baojun which had 5,013 units in May. Dongfeng Nissan wants to launch another Venucia car in 2012, for a total of 5 by 2015.

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Nissan And Dongfeng Show First Production Venucia Car: What A Muda Mon, 21 Nov 2011 12:35:17 +0000

We have been following this phenomenon for a while. Joint ventures in China create faux Chinese brands. Because? Because it’s the right thing to do, at least as far as the Chinese government is concerned. Officially, the reason for those fake Chinese brands is to make cars more affordable. Off the record, automakers roll their (slanted and round) eyes at this reasoning. A new brand doesn’t miraculously make a car more affordable. In the contrary. To establish a brand costs money. To establish dealer networks costs money. To build new cars costs money, even if they are on passé platforms. But you’ve got to do what China’s bureaucrats think you’ve got to do. Possibly, all these joint venture brands, from GM’s BaoJun on out, will end up in nice statistics that prove that homegrown Chinese brands are selling, and that exports are up.

Why the rant? Nissan and Dongfeng show the first production model of the faux Chinese Venucia brand at the Guangzhou auto show. It is a mid-class sedan, allegedly engineered at Dongfeng Nissan Technical Center,” it is called  D50 and will be introduced to the market in the first half of 2012.

Chinacartimes agrees with Carnewschina and most of China’s plentiful auto press that the car is a repackaged Nissan Tiida (a.k.a. Versa), down to the old 1.6 liter Tiida engine.

When the D50 launches in 2012, the plan is to have 100 exclusive Venucia dealers across China. Died-in-the-wool subscribers to Japanese production methods will shudder at the muda (waste, uselessness) of this operation: 100 new dealers, with only one car to sell. At least, “Venucia dealers plan to share parts of service operations with certified Nissan dealers.”

By 2015, the dealers will have more to do and sell, because “five new models will be launched under the Venucia brand by 2015.” By that time, Venucias will be sold through 250 dealers nationwide. Dongfeng Nissan is targeting annual sales of 300,000 units with these five models.

Back in Chengdu, Pangda’s Chairman Pang Qinghua also thought that these new Chinese brands are “muda,” or whatever the Chinese word for it may be. “Chinese customers expect to pay 20 percent less for Chinese brands. For foreign brands, they often pay above list just to get them early.”

Carnewschina  has pictures of the car taken at the show. Ours is from Nissan.


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And Now: An Original Chinese BMW Sat, 10 Sep 2011 14:30:41 +0000

It happens to all foreign joint venture partners: They are invited to have tea and a chat with representatives of China’s National Development and Reform Commission (NDRC). After the pleasantries are exchanged, the weather has been discussed, and statements of mutual admiration have been made, someone from the NDRC side will say: “Don’t you want to start a Chinese brand? We would really appreciate it.” Who can say no to the wishes of the Chinese government?

The latest to say “Ja” is BMW. BMW will build a second, truly “Chinese” brand for China. “We are discussing this with the NDRC, and we will find a solution,” said BMW CEO Friedrich Eichiner to Germany’s FAZ. BMW’s futuristic carbon fiber i cars won’t be BMWs  in China.

Some will say that this will be BMW’s second Chinese brand, because its joint venture partner Brilliance has this irritating tendency of building cars that could be mistaken for a BMW. But that’s a different story for another day.

There is no law that demands that every joint venture has to have a Chinese brand. But there are strong suggestions by the Chinese government that doing so would improve the overall harmony.  GM has its Baojun, Honda has its Everus, Nissan has its Venucia. Even Toyota, long opposed to any Chinese brands, caved it and allegedly will offer electric vehicles under a Chinese brand.

Volkswagen will offer its EVs and hybrids under the “Kaili” brand in China. And BMW will offer its “New Energy Vehicles” under a new, yet to be announced name.

Now why the push for Chinese brands? Multiple reasons. Carlos Ghosn, who agreed to supply a Venucia EV instead of a Leaf to China, said it’s national pride. A few months ago in Beijing, he said that Germans have a strong German car industry, France has a French car industry , Japan a Japanese and so forth. He had great sympathies for the world’s largest auto market seeking a bit of national identity – as long as Ghosn keeps his fingers in the pie. There’s more: If the brand and the model are officially Chinese, then no licenses for brand and model have to be paid (which does not mean that there won’t be license payments for the innards.) Cars will be high quality and can be exported. And lastly, the Chinese government is frustrated with its own car industry which is loafing along at 30 percent market share. And finally, the Chinese government is partner, in one way or the other, in most joint ventures, and has little to no interest in homegrown companies. As a final point, the Chinese government is unhappy with the slow pace of the electrification of the homegrown Chinese industry, and wants foreign help while keeping the all-important face. And ultimately, and so on.

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Damn Chinese Produce Leaf Lookalike! Hold On A Second … Wed, 03 Aug 2011 11:20:25 +0000

Last week, we brought you the news that the Nissan-Dongfeng joint venture will build an EV in China, that it will be ready by 2015, and that it will not be the Nissan Leaf. The Made-in-China plug-in will be offered by Nissan-Dongfeng’s “Chinese” brand, Venucia. This most likely in compliance with yet-to-be-released, but much-rumored regulations which will shower Chinese EV subsidies only on indigenous vehicles.

Barely a week after the news, there already are pictures of the future Chinese EV.

Carnewschina has pictures of EVenucia design studies that were allegedly supplied by “someone inside Venucia.” The site also opines that “the pic above clearly shows a car that loox very much like the Nissan Leaf.” Well, it does. Down to the snout in front through which the original Leaf sucks electrons.

If it is the correct picture of the EVenucia … Nothing is impossible in China.

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Shanghai Auto Show: Foreigners Create Pseudo Chinese Brands Fri, 22 Apr 2011 12:00:10 +0000

When you have a larger joint venture with a Chinese automaker, at some point it will be strongly suggested to you to create a Chinese brand. At least this is how The Financial Times understands it: “Foreign carmakers wishing to build new plants or add capacity in China’s burgeoning car market are being told by the government that if they wish to expand, they must develop a low-cost local car brand.”

Early fruits of these suggestions can be seen at the Shanghai Auto Show.

First to listen to the government (or maybe two governments) was GM. GM started the BaoJun brand last year at their SAIC-GM-Wuling joint venture.

GM has their BaoJun 630 at the show. In Red …

And in silver grey. The car sits on a Buick Excelle platform, but the body looks more like SAIC’s Roewe 350.

Under the hood, things look familiar. This is a 1.5 Liter GM Ecotec, also from the Roewe 350. The car is supposed to cost anywhere between $7,700 and $10,700. The car will go on sales shortly after the show.

The Honda/GAC joint venture is at the show with its Everus brand. The Everus S1 is pretty much a long-in-the-tooth Honda City.

The 2450mm wheelbase and the 1.3L/1.5L engine options will look familiar to the Honda connoisseur.

As far as budget cars go, the Everus is pricey. It will set you back between $10,700 and $15,300.

The Nissan-Dongfeng joint venture has its Venucia brand at the Shanghai show.

The blue car is a concept. In the first half of 2012, a real car will go to market, followed by a second model later in the year. Provenance and prices remain undisclosed.

The party line on these “Chinese” brands is that they make the car affordable to the working masses. As the Chevy Sail and the Volkswagen Jetta attest, a car does not need to be rebadged to become affordable. Actually, a new brand with separate sales and service operations adds to the price.

There is another calculation involved. A joint venture car is a car built under license. The license is held by the foreign joint venture partner. If brand and car are developed by the joint venture, then both are owned by the joint venture. The foreign partner will get its cut from the JV profits, but no income from license fees.

Even more importantly, the doors to export of the allegedly “Chinese” cars are wide open. The Chinese government is getting more and more disappointed by the low export numbers of Chinese cars and is seeking foreign assistance. The BaoJun is set to be exported to India. The license for a joint venture car usually comes with a contract that precludes exportation beyond China. If brand and car are developed by the joint venture, no such license contract.

Asked whether the Venucia brand will fit into Nissan’s emerging market strategy as a low-cost export to other lands, Akihiro Nakanishi, spokesman of the Dongfeng-Nissan joint venture, said that “currently, there are no such plans.”

A foreign maker may not even want to wave its own flag. Truly low cost, Made-in-China cars can be exported to other markets without dilution of a higher positioned brand. Renault has shown this quite successfully in Europe with the reconstituted Dacia brand. Nicolae Ceausescu’s former private car company made a name for itself in Europe as a source of low-cost quality cars, and that without trampling on Renault’s turf too much.

GM's BaoJun. Picture courtesy Bertel Schmitt GM's BaoJun. Picture courtesy Bertel Schmitt GM's BaoJun. Picture courtesy Bertel Schmitt GM's BaoJun. Picture courtesy Bertel Schmitt IGM's BaoJun. Picture courtesy Bertel Schmitt Honda's Everus. Picture courtesy Bertel Schmitt Honda's Everus. Picture courtesy Bertel Schmitt Honda's Everus. Picture courtesy Bertel Schmitt Nissan's Venucia. Picture courtesy Bertel Schmitt Nissan's Venucia. Picture courtesy Bertel Schmitt ]]> 4
From Venus To Everus: Foreign Makers Create Fake Chinese Brands Tue, 21 Dec 2010 08:58:22 +0000

Japanese makers are jumping on the Made for China (or possibly Made for Export from China) trend that was started by GM with the Bao Jun.

Both Nissan and Honda are showing (allegedly) Made for China brands at the Guangzhou Auto Show.

Nissan’s joint venture with Dongfeng shows a concept car for its Venucia brand, or “Qi Chen” in Chinese.

Honda’s Chinese joint venture, Guangqi Honda, displays a protoytype under the new Li Nian (Everus in English) brand for the Chinese market.

“While these models are to be manufactured at the plants of the joint ventures, they do not carry the names of the Japanese makers,” notes The Nikkei [sub].

Speaking of names, the Qi Chen and the Li Nian also carry their non-Chinese brand names, which are (see below) carefully chosen. Another indicator that these cars are also intended for the export market, just like the Bao Jun?

According to the Nikkei, Toyota “is paying close attention to the new local brands.” Top brass at Toyota’s joint venture with FAW sent its troops to Guangzhou with marching orders “to take a close look at these proprietary brands.”

According to The Nikkei, Toyota showed a lower cost model to Chinese government officials at the opening ceremony for the new FAW-Toyota research center in Tianjin on July 5. I bet it looked something like this.

As far as Chinese branding goes, the Japanese are quick to adapt from the restrained and low key Japanese style to the more flowery and effusive Chinese speak. Quote from the Venucia press release.

“The brand name, “VENUCIA,” is derived from the Roman “Venus.” The five stars of the brand logo represent the company’s five brand promises. VENUCIA aims to respect customers, create value, do the best, achieve world-class quality, and seek the dream.”

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