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