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Business

BMW goes to war against Chinese carmaker

Text by FRANCE 24

Latest update : 2009-02-17

While authorities in Beijing promise to crack down on counterfeiting, Germany's premium carmaker BMW is suing China's Shuanghuan for cloning one of its models and selling it at a lower price.

Toyota, BMW, Mercedes, Jeep: All the major brands were on display at this year's convertible and SUV (sport utility vehicle) fair in Paris. But the biggest attraction was Shuanghuan. The Chinese carmaker was already the talk of the town at last year's Frankfurt salon, when BMW accused it of having copied its X5 model.

Imposing yet comfortable, the Shuanghuan CEO has all the characteristics of a top-of-the-line SUV, except the price. The basic model is listed at just 26,000 euros, about 25% to 30% cheaper than the competition, according to Benoit Chambon, marketing director for China Automobiles France. Shuanghuan is aiming for sales of 30,000 vehicles in Europe this year, 10% of those in France.

Shuanghuan, which aims to gain market share in Europe in the coming years, has to face BMW's charges. The Chinese CEO and the BMW X5 appear to have the same basic design, but the CEO has a Mitsubishi engine while the BMW one of its own. Inside, both brands offer a comfortable five-seat cabin.

BMW did not hesitate to sue Shuanghuan. "We think they have plagiarised the design of the X5,” said Nicolas Wertans, chief executive of BMW France.

The French distributor of the CEO, China Automobile, believes there is nothing to worry about.  

It's hard to predict whether BMW has any chance of winning its plagiarism suit, even if Wertans seems confident. "Just because China is big and strong, that doesn't give them the right to do just anything," he says. "They have to respect the law."

"It would probably be different inside China," he added. "But abroad, they must learn and understand that there are laws that everyone has to obey."

As they wait for the outcome, the Chinese hope to conquer the market with a new concept, selling a "luxury low-cost" car.

BMW France's Wertans disparages the idea as a “marketing gimmick, to get people talking”.

Some consumers may wonder about the safety of cheaper cars, but the Shuanghuan CEO has performed well in crash tests. Nevertheless, motorists may remember the failure of the Brillance BS6. Made by another Chinese carmaker, the car split in two during tests and had to be recalled from the market in Belgium.



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Date created : 2008-06-07