hover.jpgItaly is Great Wall Motor's chosen beachhead into Europe's congested car market. The Hong Kong-listed carmaker plans to ship 500 of its Hover cars to Italy, according to the Financial Times ($).

Described
as a “City Urban Vehicle”, a cross between passenger car, SUV and
station wagon, the Hover (pictured left) is designed to “meet the
desire of urban appealing for off-road” and has “advanced occupant
safety systems”.

Clearly, Great Wall needs to get some better
copywriters before taking its European expansion further. But there's
no criticising the timeliness of its move into Europe's fast-growing
SUV sector even if my heart sinks at the thought of yet more SUVs
clogging Europe's congested cities.

According to the FT,
Great Wall plans to sell the Hover for around $20,000 in Europe — a
steal compared to a traditional SUV's average price of €39,000
($50,000).

In China's fast-growing car market, sales of Chinese
brands like Great Wall now eclipse sales of Japanese cars. Chinese
carmakers hope to replicate that success overseas but their impact to
date has been modest.

Great Wall exported only 10,000 cars in
2004, but exports rose to 32,000 last year, reaching 36,000 in the
first half of this year.

There are around 20 Chinese carmakers
hoping to export to Europe. But analysts think it will take a decade
before they can convince consumers in the west that their vehicles are
as safe, clean and reliable as those of other manufacturers.

The recent poor performance in
an independent crash test of Jiangling's Landwind SUV confirmed these
fears and forced makers and distributors to take these issues a lot
more seriously.

To help allay doubts, Great Wall stresses
that the Hover meets the Euro-III emission standard and uses technology
from western parts manufacturers like Bosch and Delphi. Mitsubishi
supplies the engines.

After Italy, Great Wall is looking for
distributors in Greece and Spain. Its choice of European target markets
is cunning. These are big, predominantly rural countries with large
urban populations who fall for the aspirational qualities of an SUV but
cannot afford a BMW X3 or Toyota Land Cruiser.

Great Wall is not
the first Chinese carmaker to spot this opportunity, however. Jiangling
last year signed up Dong Motors, to distribute the Landwind in Spain
and Europe. Ironically, Dong is a subsidiary of Sino Motors, which was
set up by executives from the former Rover Group.

The fall of
Rover has become a textbook case of how upstart Asian competition
brought to its knees a once-mighty western manufacturer. In the case of
Rover, the competition came from Japan not China and the rot set in a
long time ago.

But its interesting to see that China's car industry now sees value in MG Rover's assets and brands.

According to the Daily Telegraph, BMW recently agreed to sell the Rover brand to Shanghai Automotive Industry Corporation for more than £11m.

BMW won't officially confirm the identity of the buyer but industry sources say SAIC is the obvious candidate.

Last
year, SAIC lost out to Chinese rival Nanjing Automobile Group in the
battle to acquire MG Rover's legendary Longbridge car plant in the UK.

SAIC
already own the IPRs for MG Rover's 25 and 75 models. While best known
in China for its JV with General Motors, SAIC has set up a division to
make own-brand cars, which presumably will be heavily based on these
Rover models.

If it also owns the Rover marque, then it could market the cars under the Luo Fu brand – the Chinese translation of Rover.

Nanjing, meanwhile, plans to use the mothballed Longbridge plant, which it bought for £53m, to restart production of sports cars
under the MG marque. Kits of components will be manufactured at a new
production plant in Nanjing and shipped to Longbridge for assembly.

It will also plans to built a US assembly plant in Oklahoma, although analysts are sceptical that Nanjing can become a credible player in the US.

The
fathers of the British motor industry must be turning in their graves
to see Longbridge reduced to a mere assembly operation for China's
upstart car industry. Nevertheless, its good to hear that the MG's
famous octagonal badge will once again be gracing sports cars.

Elsewhere in China's car industry:

  • Car sales rose in China rose nearly 50 percent in the first half of this year to 1.8m, with US giant General Motors' JV nudging out aside former market leader FAW Volkswagen.

  • Nissan debuts the Livina Geniss“world
    car” in China ahead of other markets. The decision reflects the Chinese
    market's growing importance for global automakers. Other variants of
    the seven-seater MPV will be built and sold in other regions under
    different names over the next two years.

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