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Customer LoginsChinese owners of Borgward, MG, Volvo, Qoros aim to strengthen international appeal
The Borgward, MG, Volvo, and Qoros brands, now in Chinese ownership, continue to maintain an international profile with foreign executives, as well as offices, technical centres, and in some cases production bases outside of China.
- SignificanceDespite the Borgward, MG, Volvo, and Qoros brands aiming to highlight their international heritage, their brand and production footprint in China continues to be a major factor in developing their success in the global market.
- Implications:International expertise is increasing at automotive brands in China, even at local automakers, which are ramping up the number of industry veterans on their payrolls, often hailing from distant lands.
- Outlook:IHS Automotive forecasts highlight that sales in China continue to be the main volume for the brands, despite their aim to push their global presence.
Chinese owners have acquired a number of international automotive brands and, in other cases, have formed joint ventures to create brands for which they intend an international profile. The Chinese owners are strengthening Borgward, MG, Volvo and Qoros as international brands in a variety of ways. The first major trend is the hiring of industry veterans who are, for the most part, of foreign origin and from international automakers, to strengthen and maintain the brand as an international one.
Borgward has most recently been acquired by Chinese state-owned automaker Beijing Automotive Industry Corp (BAIC) subsidiary Beijing Foton Motor Company, which traditionally makes commercial vehicles (CV) but also large sport utility vehicles (SUVs), and earlier this year its plant was awarded regulatory approval to produce Borgward brand vehicles. The German Borgward brand was resurrected in 2015 and in 2016 the brand showed its first SUV at the Beijing Motor Show. The BX7 will be sold across China, with the company targeting establishing a network of 120 dealers by the end of the year and 200 by the end of 2017. The company has a 'B-G-W' strategy, which highlights the resurgence of the Borgward brand, with 'German engineering' and an aim to create a 'Worldwide footprint'. To do this, the Chinese owners of Borgward have brought in some senior industry veterans from well-established German brands.
These include:
- Ulrich Walker, CEO of Borgward Group. Walker was previously Chairman and CEO of Daimler NorthEast Asia from 2006 to 2013. Walker now reports to the chairman of the supervisory board of Borgward Group, Christian Borgward.
- Anders Warming, member of management board for design at Borgward Group. In a company press release, Borgward states that it is the first "German automaker to create a board of management position for design". This will be effective from 1 January 2017 and Warming will become the company's first member of the management board for design. Warming worked at BMW Group for 16 years, rising to head of Mini design, prior to which he was head of BMW exterior design.
- Benjamin Nawka, chief designer at Borgward Group. Nawka worked at Mercedes-Benz during 2008−12, before joining Borgward's new parent company, Beijing Foton Motor Company, where he worked for three years before heading up the design team at Borgward.
- Tilo Schweers, chief developer for Alternative Drive Systems and Powertrain electrification at Borgward Group. Schweers is also an ex-Daimler executive who joined Daimler in 1996 and mainly worked on the development of alternative drive systems, before joining Borgward this year.
- Florian Herbold, chief engineer for transmission development and integration at Borgward. Herbold was previously employed by Daimler, where he worked on the development and application of hybrid automatic transmissions.
The list of the brand's international recruits does not stop there, however, and most of the brand's international executives are based in Stuttgart at Borgward's headquarters. However, vehicles will be built at a Beijing Foton plant in Beijing, China. The 1.10-million-square-metre plant has an annual production capacity of 160,000 units, and in the future this may be expanded to 360,000 units per annum (upa). The first model being built is the BX7 SUV. According to Walker, the Borgward BX7 is being positioned in China as a "German branded, wide-bodied intelligent SUV". The vehicle combines rigorous German engineering, advanced technology, reliability, a distinct sporty wide body, and outstanding performance and safety, says the company.
The British brand MG was acquired by Nanjing Auto Group, which was then acquired by Shanghai Automotive Industry Corp (SAIC) Group, a large state-owned Chinese automaker. The automaker now aims to resurrect the MG brand in markets such as Australia, while strengthening its presence in the United Kingdom, although the recent 'Brexit' vote to leave the European Union has disrupted the company's strategy for Europe. Parent company SAIC employs a host of staff at the ex-Rover plant in Longbridge, UK, where it also bases the SAIC Motor UK Technical Centre. Some key names at SAIC include:
- Dave Lindley, managing director, SAIC Motor UK. Prior to this role which he took up in 2007, Lindley was head of vehicle engineering and design at SAIC UK and hails from MG Rover and the Rover Group, which he joined in 1993.
- Iain Flemming, vice-director, engines, at SAIC Motor UK. Flemming has, like others at SAIC UK, been with the company since 2005.
- Keith James, principal design engineer at SAIC Motor UK. Prior to this role, James was an engine design engineer at MG Rover. He is a 30-year veteran of the industry, starting at MG Rover in 1987.
- Richard McAlister, electrical engineering vice-director at SAIC Motor UK. Prior to this role, he was at MG Rover from 1993.
Volvo, which is owned by Chinese automaker Geely Automobile Holdings, continues to trade on its Swedish heritage despite more and more synergies now with the Chinese Geely Auto sister company through sharing of new common modular architecture (CMA). However, despite being owned by a Chinese company under the chairmanship of founder Li Shufu, the Volvo Car Corporation retains a strong international profile with a team of international executives continuing to run the company. These include: Hakan Samuelsson, president and CEO, Volvo Car Group; Hans Oscarsson, senior vice-president and CFO, Volvo Car Group; Peter Mertens, senior vice-president, research and development, Volvo Car Group; Lars Danielson, senior vice-president, Asia-Pacific, Volvo Car Group; and Thomas Ingenlath, senior vice-president, design, Volvo Car Group. Volvo has a production base in China, in addition to existing international bases such as in Sweden.
Qoros Automotive is a newly formed brand and automaker that considers itself 'international' despite being partly owned by Chinese automaker Chery Automobile and its only global manufacturing base being in China. The company states, "Qoros' operational hub is in Shanghai, where marketing, sales, legal affairs, engineering, and purchasing functions are based. A team of top designers and engineers are equally split between the offices in Munich (Germany) and Shanghai (China)."
Outlook and implications
These international brands, and indeed other Chinese auto brands, are currently on a major mission to be considered international. The trend to recruit top industry veterans from 'rival' foreign automakers has led to a wide range of personnel currently residing in China and working for SAIC, Geely, Chery and Great Wall. But for the brands Qoros, Volvo, Borgward and MG, how important is the China market to their global strategies?
For Volvo, for example, sales in August hit 41,681 units with the United States the biggest single market, followed by China where sales grew 5.8% y/y. And Volvo aims for sales of 100,000 units per annum in China. IHS Automotive light-vehicle sales forecasts highlight a growing battle between China and the United States for top sales destination for Volvo brand cars.
For the MG brand, China remains the main market. IHS Automotive light-vehicle sales data show that in 2015 the MG brand sold a total of 61,986 units in China, of a total 75,000 units sold globally. China was by far the largest single market. In 2020 sales in China for MG are forecast to rise to 115,000 units, with total global sales of 155,300 units. The second largest market for MG is expected to remain as Thailand. Indeed MG, or rather parent company SAIC, now has a joint venture in Thailand for the production of MG vehicles.
For Borgward, our forecast is that annual sales this year will amount to around 13,300 units, of which China will account for around 12,700 units. By 2020, we forecast China will continue as the main market, followed by markets such as India.
For Qoros, too, China remains the main market where the company had sales of 14,246 units in 2015 and these are expected to rise to around 64,000 in 2020. China will remain the brand's largest global market in 2020, with sales forecast at around 32,000 units.
About this article
The above article is from IHS Automotive Same-Day Analysis of automotive news, events and trends, and is a deliverable of the World Markets Automotive Service. The service averages thirty stories per day and also provides competitor and country intelligence. Get a free trial.