Being a western brand in China is now no longer a licence for success
Piece by piece, western brands have seen their perceived advantages over Chinese car companies eroded.
As was evident at the recent Beijing motor show, several Chinese car companies are now there or thereabouts with quality cars with international appeal yet that key issue of the quality and appeal of the brands and branding is very much a live argument.
It’s one thing appealing in your home market, quite another when being exported, particularly when so many brands and models are lumped together as ‘Chinese cars’ no matter what they are (including, I’m sure you’ll have noticed, in this piece already).
While the Chinese are still playing catch up on brands, it’s an advantage western car manufacturers are still keen to exploit and talk up, including BMW Group’s recently-appointed brand and sales boss (and ex-China chief) Jochen Goller, who spoke to me at the recent Beijing show.
“My focus at the moment is brand because when you go across the main show floor here, there are an extreme amount of models coming to the markets. It’s overwhelming I think personally.
“Brand is an asset. If curated and strong, it’s a real differentiator. We obviously have Mini and Rolls-Royce [in addition to BMW], which I would say are the strongest brands in the world.”
Goller said his focus will be making BMW brands and branding as strong as possible, which in the short term is designed to shore up its position in China where it continues to grow in line with the market unlike many other western brands, but inevitably in the longer term when brands like BMW will be in direct competition with Chinese brands closer to home, and will be at a likely price disadvantage.
“You really have to pay respect to be honest with what is happening when you look at the design and quality” of Chinese cars, said Goller. “These are good cars and the learning curve is very steep.”
The reason why there are so many new Chinese brands popping up all the time is because companies need to have “more than one horse in the race”, as one Geely official told me. “There’s a race to be in the group that makes it to the finishing line” after this expansion and boom era settles down. Profits need to be invested into new brands and products constantly in this race to survive and ultimately thrive.
One of Geely’s new brands is Zeekr, which has been making cars for less than three years but plans to double sales to almost 250,000 units this year on its 2023 performance. Geely design director Stefan Sielaff – formerly of brands including Volkswagen, Audi and Bentley – oversees Zeekr design and described the process of creating a new brand.
“In the beginning, you define the brand, the brand philosophy, the corporate identity, the birthmark, the visual identity. This is all originating in the design department and is very, very important. Then the products and the brand statement are connected with each other, which is a very Western way of thinking. But I have the feeling that the Chinese OEMs are starting to understand this [brands] very well and put a lot of focus on this.”
One thing you cannot create is heritage and a back catalogue of models, another asset western manufacturers will be keen to exploit, not only great cars from their past but also the traits they have. BMW product boss Bernd Korber agreed with Goller that “brand is the best protection” for the future, and “to keep that positioning of being a unique premium brand is the best you can do. I think we can justify that because BMW has clear genetic strengths”.
“Driving performance is an asset, has always been an asset and will be an asset,” he added, a comment that stuck with me later in the day when another BMW executive remarked how pleased he was to hear Chinese journalists ask about dynamic performance of the cars and understood the advantage BMW had here. Whether or not the roads are any good or the cars are driving as hard as they might in Europe, the fact they can be driven that way and are seen as superior is becoming a differentiator Chinese customers understand.
Design is another key differentiator, Goller believes, although the advantage feels less ingrained here. “A lot of cars [in China] look alike. Take the badge off and you cannot distinguish number one from number two. What we do is we have a very unique design language [for BMW] and for Mini and Rolls-Royce as well. We have a competitive advantage and we will keep it.”
Being a western brand in China is now no longer a licence for success, nor is simply being a brand with success back home. You must be a strong one, with a heritage and a clear identity in the way your cars look and drive. Western brands are learning how to compete in China all over again, yet at the same time you know China will be learning plenty about how to take their brands international, too.
