Wuxing V.v. Wuling: Fight Of Chinese Van Makers Will Be Felt In America
A fight between two makers of cheap Chinese delivery vans will spill over to America – in more ways than one. China’s Jonway is a small carmaker from Zhejiang Province. Usually known for cheap pickup trucks, Jonway launched the Wuxing onto China’s small van segment. That segment is ruled by Wuling, the company that has a joint venture with GM. Jonway is also ruled by an American company: Californian ZAP bought 51 percent of Zhejiang Jonway Automobile Co. Ltd. in 2011.
Wuling’s cheap breadvans rule a hot, but recently beleaguered segment in China. Wuling Sunshine minivan was China’s most-popular vehicle last year. At 33,000 yuan ($5,215) list, the car does not make much money for GM, if any at all. “GM does not rely on the minibus for profit,” said Jenny Gu, a Shanghai-based analyst with industry researcher JD Power & Associates. “They only contribute volume.” It was that volume that helped GM dethrone Toyota last year.
Yonway wants a share of this market, and the company is not subtle about it. Says Carnewschina:
“Jonway choose Wuxing on purpose, it almost sounds the same in Chinese as Wuling and it almost means the same. Wuxing means ‘Five Stars’, Wuling means ‘Five (sharp) Squares’.”
Jonway will sell its Wuxing from 37,800 yuan on up. Last year however, Wuling dropped the price of its already cheap Sunshine to 28,000 yuan ($4,424). The segment as a whole is under pressure, the entry of new competitors with similar names is likely to spark price fights. Losing $100 per van does not sound like much, but if you sell more a million of them …
Be prepared to see the Wuxing closer to home. ZAP says that the Wuxing will be sold in the U.S. as the Shuttle G, a plug-in version will be sold as the Shuttle EV.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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“GM does not rely on the minibus for profit,” said Jenny Gu, a Shanghai-based analyst with industry researcher JD Power & Associates. “They only contribute volume.” This is a literal example of the credo "we lose money on every unit but we make up for it in volume..." These vans make sense but they need to pass NCAP and Euro 5 to be useful outside of China.
Is that a red version of the Subaru logo?