Geneva Sees Chinese Presence for First Time

GENEVA – Chinese vehicle brands – for the first time ever – were represented at Europe's springtime annual international auto show here this week.

While the two companies don’t yet present a threat to Europe’s established auto makers, the presence of Ssangyong Motor Co. Ltd. and Hafei Motor Co. Ltd. offer a hint of future competition.

Ssangyong, a South Korean-based SUV manufacturer, has exhibited at Geneva before, but this marks the first time since it signed a deal to sell a 48.9% stake in the company to Shanghai Automotive Industry Corp. SAIC) last October. (See related story: SAIC Seals Deal With Ssangyong)

SAIC is one of China’s premier auto manufacturers and also has joint ventures with General Motors Corp. and Volkswagen AG in China. The Chinese conglomerate also holds a 10% share in South Korea’s GM Daewoo Auto & Technology Co.

Hafei’s interior-less Saibao concept car was designed and engineered by Italy’s Pininfarina.

Hafei, an independent auto maker based in Harbin in northeast China, showed an interior-less concept car, the Saibao, designed and engineered to European homologation standards by Pininfarina SpA.

"We plan to start production in the first quarter of 2006" in China, says

Liu Tao, chairman of Hafei Motor. "Exports to Europe will start in two or three years."

SAIC, the second-biggest Chinese auto maker, took official control of Ssangyong Jan. 27. Ssangyong, the fourth largest Korean auto maker, has about 10% of the Korean market with three SUVs and the Mercedes-based Chairman luxury sedan (built under technical agreement with DaimlerChrysler AG.

In Europe, independent Ssangyong importers in each country import the SUVs, whose range is led by the new Rexton, powered by a Mercedes-Benz engine.

In Switzerland, where SUVs sell well, distributor Ssangyong Schweiz AG hopes to sell 1,000 units this year of the Rexton, Musso and Korando through 13 dealerships, says Daniele Rivelli, who recently joined the company after a sales career at Mercedes.

China's presence at the show through Ssangyong mostly is technical as SAIC so recently has taken control. But the Chinese connection is made obvious at the Pininfarina stand where the Saibao is displayed with Chinese ideogram characters.

The car, a 5-door with a sedan look, is a result of Pininfarina's fifth contract with Ssangyong and the first to involve engineering a body to European standards.

Hafei intends to sell 230,000 of its own cars this year, and 400,000 1.8L engines made in a joint venture with Mitsubishi Motors Corp., Tao says in an interview.

The company began as a manufacturer of minivans, and Pininfarina's first contract was to design the Hafei Zhonghi minivan. Since then, Pininfarina has designed the Lobo city car. Hafei has two other models, including the Sigma minivan, which is a licensed copy of the Mitsubishi Dingo.

The Saibao, powered by the 1.8L Mitsubishi engine built at the joint venture in Harbin, will cost the equivalent of €12,000 ($15,700) in China, Tao says, adding, “All the patents, the technology, all the intellectual property in this car belong to the Hafei Co."

The company currently is negotiating a contract with European importers and within two or three years will bring Hafei cars into the European market. “We will bring a car with good quality, competitive price and very good aftersales service," Tao says.

However, Hafei will not aim for U.S. sales until it is established in Europe, he says, noting "North America is a very unique market."

Pininfarina, which began working with Hafei in 1996 and now has styling and engineering business with four leading Chinese auto makers, recently opened an office in Beijing.

"Now that the Chinese are under pressure of the World Trade Organization, they cannot go on with reverse engineering" of Western cars, says Dario Giordano, senior vice president-business development at Pininfarina. "Now they want something developed for them; their own intellectual property."

Pininfarina a month ago signed a contract to develop an SUV for Hunan Changfeng Motor Co. (CFA), which builds and sells the Mitsubishi Pajero SUV, "and in April at the Shanghai auto show will reveal a Chery car we made," says Giordano. Pininfarina is developing two families of world cars for Chery for export. (See related story: Bricklin Brags Chery U.S. Venture Can’t Miss)

The Italian design house also is working with Brilliance China Automotive Holdings Ltd. and PSA Peugeot Citroen on a model that will be built by China’s Dongfeng Peugeot Citroen Automobiles.

Giordano says he expects to see Chinese cars exported to Europe and North America within five years. He says Chery, partnered with Malcolm Bricklin in North America, "is much ahead" of the pack.