Italy 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:
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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.
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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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