Road rage in the West as copycat cars from China start to make their marque overseas

Road rage in the West as copycat cars from China start to make their marque overseas
When the Frankfurt Motor Show opens on Thursday, it will not be the glittering new cars from Europe, Japan and the US that attract the most attention; hogging the headlights will be the motor manufacturers of China.
Their latest models are accused of copying the world's finest. Shuanghuan's Ufo off-roader does bear some resemblance to Toyota's Rav4, its lar-ger Ceo has a distinct whiff of the BMW X5, and its Noble makes the Smart Fortwo seem not quite so unique.
"If a car suddenly appears that looks like a Smart, yet is not one but a copy which was produced not quite legally, then that is not great," observed German Chancellor Angela Merkel, noting that Chinese product piracy "is a relatively big issue".
The world's car companies – particularly in Germany – are less diplomatic. A BMW spokesman said: "We are looking at taking legal measures. This is the first time that this has happened."
Mark Binder, a Smart spokesman, said: "We saw the Shuanghuan vehicle at Auto Shanghai ... It is a blatant attempt to copy the design of the Smart Fortwo. We reserve the right to pursue legal action – also with regard to a possible exhibition of the car at the Frankfurt motor show."
Meanwhile, DaimlerChrysler, Smart's parent company, is outraged the Noble is to be distributed in Europe.
"Some car distributors wanted to take our cars to the show but we have not allowed that," a Shuanghuan spokesman said. "The Noble and Ceo cars, approved by the Chinese government, are legal products."
Shuanghuan insists there is no case to answer and that the car industry depends on copying technology to make progress. Perhaps that explains the similarity of its Laibao SR-V to the Honda CR-V, which did lead to successful court action in China. Honda has fought dozens of similar legal battles to protect its designs and patents.
Shuanghuan is not alone in finding inspiration elsewhere. The Hongqi HQD bears the stature of the Rolls-Royce Phantom, while the Geely's Merry seems to imitate the Mercedes-Benz C-Class.
GM, the largest car maker in China through two joint ventures, claims its Spark has been very precisely copied by Chery's QQ. Their doors are said to be interchangeable. Yet GM has still to find help from China's courts. Meanwhile, the QQ is undercutting and outselling the Spark.
In truth, none of the world's largest motor companies can take too hard a line on China.
Rick Wagoner, chief executive of GM, said: "We've gone in China from almost no sales, 10 or 12 years ago, to this year [when] ... we'll sell more than a million units. And it's been a good, profitable business too."
China is the world's second- largest and fastest-growing car market, its production of 5.2 million vehicles in 2006 exceeding that of the US, having increased 16-fold in a decade. Billions of pounds are being invested by overseas groups and some 140 new cars are to be launched this year. All the leading car makers now have one or more local joint ventures. You can even buy a Chinese-built Series 5 BMW.
Eric Thun of Said Business School, Oxford, an expert on the Chinese motor industry, identifies two key weaknesses: "Process skills they learn from working with foreign groups; design skills will take a long time. Right now, there is no Chinese company able to develop its own vehicles. Copying is a short-term solution which works in the domestic market."
China already insists on a high level of local content, so ensuring the creation of a thriving, indeed crowded, indigenous industry. The market share of domestic brands has risen to 25 per cent from 10 per cent within a year.
Yet because of fierce domestic competition and small margins, these companies are being forced to export to make money. As a result, cheap, robust and simple Chinese cars are already successfully finding customers in Russia, the Far East and Africa.
Nevertheless, the car majors clearly fear China will soon create a great national champion and export seriously, using technological expertise gained from joint ventures, licensing agreements or inspired guesswork.
Small wonder that the car majors react strongly when Chinese companies enter their domestic markets with copies.
Karl Schlössel who imports Chinese cars into Germany, including the Ceo, is surprised: "My God, I can understand the anger but it had to happen one day. [The attacks from] BMW astounded us. The Ceo is on the road for three years – it is available in Portugal, Spain and Russia – and then BMW wakes up and says we face competition and product confusion.
"From a car that costs one third of their price?" Mr Schlössel admits it will soon be possible to export Chinese small cars and offer them extremely cheaply, considerably undercutting European manufacturers.
The British car industry is more than just an onlooker. Our last domestic mass-car pro-ducer, Rover, was broken up and acquired by Shanghai Automotive Industry Corporation and Nanjing Auto. The Chinese versions of the MG sports car and the Rover 75 (now called the "Roewe 750") are already in production and on the streets of China. Yet SAIC also retained Rover's British design centre.
Mr Thun pointed out: "They are using British engineers, along with engineers in Shanghai and Korea, to create an independent design capability."
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