By on January 8, 2009

The Hong Kong Stock Exchange announced that the board of directors of Brilliance China Automotive Holdings Limited ” has noted the increase in share price and trading volume of the shares of the Company today and wishes to state that the Board is not aware of any reasons for such increase in share price and trading volume.”

Brilliance, BMW’s Chinese joint venture partner and maker of its own line of cars (which kind of look like Bimmers) “confirms that there are no negotiations or agreements relating to intended acquisitions or realizations which are discloseable.” In other words: They say they have no idea why their stock would move.

We called around a bit in China. Everybody is likewise flabbergasted. A source we trust, and which shall remain undisclosed to protect his job, says: “There is nothing unusual going on at Brilliance. They will announce some homegrown new models this year. No new BMW joint venture cars are planned.” So why the sudden interest in their stock?

It’s not that Brilliance’s sales record was too stellar. According to Gasgoo, “Brilliance Auto has met with its all-time slow in car sales. The company has sold only 285,000 vehicles in 2008, with its sales growth down 5 percent from last year.”

In 2005, Brilliance tried to export Bimmer-a-likes into the Hornet’s nest Germany. Hans Sachs, a former VW exec, launched an import company and ran into heavy fire. Imported Brilliances were crash tested (some say under a bit dubious circumstances) and failed miserably. Videos on YouTube. Death knell. A later test in Spain was ok, but the damage was done. A marketing consultant, asked for help by Sachs, recommended: “Put the cars on a ship and head for the biggest hurricane you can find.”

Yet, Brilliance hasn’t given up and calls it “a learning exercise.” They will be at the Detroit Auto Show, where they will put “nearly ready for US” cars on display. But again, who’s aggressively buying their shares and why? One wild assed guess is that it might be the hellhound itself. Cerberus. In order to have something to sell through their dealerships. They could buy TKD (kit cars) from Brilliance, assemble them in Mexico or in their disused Delaware plant and call them “Made in the U.S.A.”

It’s a far fetched assumption, but as the assumptee says, “funnier things have happened.” But why buy the shares if they just can buy the kits? Brilliance would be glad to sell them.

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7 Comments on “Who’s Buying All That Brilliance Stock, And Why?...”

  • avatar

    Brilliance will make a fine owner for Chrysler and GM

  • avatar

    let’s see: stock manipulation… BMW joint venture…

    The apple doesn’t fall far from the tree, does it?

  • avatar

    Its definitely Cerberus but not to help get vehicles for Chrysler to sell. Instead, they are so ecstatic with the success of their begging campaign they are looking to take it abroad. With Brilliance set for tremendous failure this year they are sure to be able to suck big bucks from the Chinese. They’re likely hiring ex-government officials now.

  • avatar

    Isn’t it interesting to note that the later crash test in Spain, showed a car sans sunroof?

    Ergo, if you are forced to own a Chinese marque at some time in the future due to financial constraints, make sure it does NOT have a sunroof (assuming you value your life, I mean).

    All sarcastic comments about “Chinese quality” aside(isn’t that an oxymoron? Kind of like military intelligence?), considering that Cerberus is very probably “on the hook”/prone to multiple class action lawsuits, big time, in all of the states if they close up shop (“failure to provide Chrysler, Dodge and Jeep branded vehicles”) this sure would be one way to provide Chrysler and Dodge BRANDED vehicles.

    Have a peek at the vehicles (US website) and see if you can squint and “see” a Dodge grill on the hatchback, sports coupe and the Sports sedan, and a Chrysler grill on the “luxury” C-D class sedan…

    (Dodge Omni hatch?) 1.8 litre

    (Dodge Daytona sports coupe?) 1.8 litre turbo

    (Dodge Neon sports sedan?) 1.8 litre turbo

    (Chrysler Crown “luxury” sedan?) 1.8 litre turbo

    Oddly enough, after consolidating in Canada (and before expiring) Studebaker management considered doing just this, by buying upclass Nissan cars (not sold in the US) and rebadging them as Studebaker cars, but the deal fell through. The Canadian corporate prez, Gordon Grundy, was in Japan ready to go see the Nissan executives (with begging bowl firmly grasped in hand) and suddenly the telephone rang. Studebaker management had pushed for two conversations, and Grundy was “ordered” by corporate’s US legal counsel, to also approach Toyota. After doing so and being rebuffed, Nissan caught wind of this and did not want anything to do with Grundy or Studebaker. The legal counsel’s name? RICHARD MILHAUSE NIXON.

    Otherwise, you might well have seen the Nissan President (and maybe even Cedric) sold as the STUDEBAKER President and Lark (?) from about 1967. Who knows; had Grundy missed the one trans-atlantic telephone call and gone off to meet Nissan management on schedule, Infiniti may not have ever been needed and Nissan may have had better, early access to “flyover country” dealers in the USA, which could have meant never losing 1st place in America to Toyota (speaking of Japanese brands, here) which could obviously have led to not needing an eventual bail-out by Renault… (Part of the proposed deal was to also sell Datsun compacts through Studebaker dealers in “open” areas – mostly the midwest. Also, interestingly, Toyota “overtook” Datsun in the US market – in 1967).

    Ain’t history fun?

  • avatar

    As for “why buy Brilliance stock” – simple. First, such a situation is business as normal; you buy a rebadged car “not your own” and the OEM supplier is usually bought into to cement the deal (not to mention that as long as you’re going to increase a company’s production with a deal, hopefully increasing their profits, why not take advantage and buy into it to gain some profits?) GM once bought into Isuzu and Suzuki, Chrysler once bought into Mitsubishi and Hyundai (all of those partnerships now defunct) and Ford once bought into Mazda (still partners for now).

    Plus this could help Chrysler sell rebadged cars through their nearly defunct Chinese dealers (Brilliance dealers won’t have any say in the matter, will they?)

    The icing on the cake is that Cerberus just got a boatload of money to spend courtesy of you & me, and they don’t have to hand over partial ownership of Brilliance to Chrysler LLC, but can hold it in house! Which would be pretty typical of the hounds, from what I understand…

    COULD it be that Cerberus is buying stock in anticipating of actually approaching Brilliance for a supply of cars?

    I rest my case.

  • avatar

    @menno: Now that makes certainly sense. By the way, my sources say the Brilliances are not all that bad. The Bimmers they build are built with original Bavarian technology in plants devised by BMW and to BMW standards. For their homegrowns, they just need to get more inspired by how BMW constructs a safety cell, and not forget stuff like putting cross members into the doors etc., and they’ll be right there. With a little input from a big company that has the computer simulators needed to build cars, their safety problems could be solved in a few months. I’m sure Chrysler has a lot of unused computer cycles to trade …

  • avatar

    The owner of the Houston rockets invested 100 million in Brilliance. That is who is buying all of that brilliance stock. He also has 50 years of experience in the auto industry.

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