SAIC's
plans to establish itself as a global rather than Chinese carmaker have
hit a setback, once again showing how the Achilles Heel of Chinese
multinationals is often their branding strategies.
Reuters reports that Ford has acquired the rights to the Rover brand, which SAIC was hoping to acquire to further its international ambitions -- see earlier EngagingChina post.
Ford always had the right to buy the Rover brand from Germany's BMW and it already owns Land Rover. But earlier this summer BMW supposedly agreed to sell Rover to SAIC for more than £11m, according to unconfirmed media reports.
The news that Rover will remain a western brand is a big setback, but isc not in itself disastrous for the Chinese firm. After all, SAIC already owns the IPRs for two Rover car models the 25 and the 75 (pictured), and the first SAIC cars based on these platforms are destined to roll off production lines in November.
But clearly it would have been better to to be able to use an established brand for these cars, particularly if it wants to sell them in west and, most obviously, the UK -- the original home of the Rover.
While it is a shadow of its former self, the Rover brand still has a lingering upmarket image. Without a well-known brand to use in the est, SAIC will have to work harder on advertising and promotions to establish a name for its cars abroad.
SAIC hopes to make around 600,000 of its own-brand cars by 2010 but only around 45,000 cars will be sold outside of China.
