GM Invests More Into Fake Chinese Brand

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 Much to the chagrin of Chinese planners, the foreigners only handed outdated technology down to the joint venture brands.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.