Chinese Automotive Brands Creating domestic and global licensing opportunities
By Bernd Conrad
For decades, Western car manufacturers grew their business in China. What once was an emerging country in terms of business is the biggest single market for companies such as Volkswagen. Also, there are a growing number of local car manufacturers in China that are expanding their business into export markets such as Europe.
“Don´t expect the Chinese car brands to enter the export markets as bargain alternatives to the Western models,” Bernd Conrad explains. The German licensing executive, an automotive journalist, is a specialist on automotive marketing and keeps a close eye on the newcomers from China.
“In contrary, the Chinese manufacturers do not only have state-of-the-art technology at their hand, but also a high self-confidence,” continues Bernd. Also in their home market, a growing number of customers are preferring local brands over the “old players” from Europe or the US. One of the reasons is the advanced connectivity and software offered by cars from China.
Branding plays a role, of course. State owned giant SAIC (Shanghai Automotive Industry Corporation) once acquired the naming rights of defunct MG Rover. In addition to the Roewe-brand, SAIC established MG as a mainstream car brand, also in Europe.
“MG combines a huge brand heritage and well-made cars. Especially in the UK market, the manufacturer is very well received by customers”, Bernd tells Total Licensing China. “This also opens the door for brand extension.”
A thought-through licensing strategy for the MG brand could see products and services such as a branded charging solution for electric vehicles but also apparel and home furnishing products. MG is not the only example of Chinese car brands that have potential to grow in licensing.
Nio is on the doorstep of Europe with the first deliveries of electric premium vehicles. “The Nio brand could be used for vacation experiences, i.e. in environmentally-friendly hotel resorts,” Bernd explains. “But also a mainstream brand like BYD, also one of the biggest battery manufacturers in the world, has L&M potential. BYD is an acronym for “Build Your Dreams.” Competitor Chery Automobile is preparing a new brand called Omoda to attract a young target group in export markets.
Is there also a potential lifestyle brand from China, such as BMW-owned Mini? Bernd hints at Ora, a new electric-only car brand from Great Wall Motors. At this moment, the Chinese are introducing their first model into the UK and European markets. The compact BEV (Battery Electric Vehicle) is called “Funky Cat”.
“The name of the vehicle sounds a little bit weird in the first instance,” says Bernd. “But it works: People remember it and they also remember the unique design of the car. At a time where most cars have aggressive faces and large headlamps, the Funky Cat looks cute.” The manufacturer calls its design language “retro futurism.”
The Ora Funky Cat is not at all a cheap car. Customers have to pay a premium price for the hatchback, but they do get a well-made and fun-to-drive car in return.
Bernd is expecting a high brand licensing potential for the Ora brand: “The product design, combined with the tonality and color scheme of advertisements, website and brochures are very unique. Customers will soon be kind of proud to drive an Ora. Why not expand this relationship into sports equipment, accessories and more?”
Another advantage of Ora is a dealer network in markets such as Germany. This brings more touchpoints for a new brand compared to pure online sales. MG and BYD operate through a network of sales agents and dealers, too.
It will be interesting to see how fast the Chinese car manufacturers will not only sell a significant number of cars outside of their home territory, but also if (and when) they start to expand their brand exposure with collaborations and licensing.
About Bernd Conrad:
Bernd Conrad is an experienced licensing executive who spend almost two decades in senior sales positions, i.e. at Jetix/ Disney and m4e (now Studio 100 Media). Back in 2017, Bernd started a new venture as an automotive journalist, running a German language online magazine called AUTONOTIZEN and a YouTube-channel with the same name.
In addition, he runs a business consultancy called CONRAD ENTERPRISES, specialising in branding and market entry strategies. Bernd´s expertise in brand building and the automotive world made him a specialist for car brands from Asia, especially China. In-depth reviews and news-content on Chinese cars is one of the USPs of AUTONOTIZEN.
YouTube channel (Germany): AUTONOTIZEN
YouTube channel (English): ASIA AUTO AMBASSADOR