Chinese manufacturers should behave like an American in Europe

China Automotive Review, November 2013

Extracted quote from Bill Russo:

The current perception of Chinese buyers is that Chinese manufacturers produce low cost and inferior cars compared to the joint ventures. Pursuing a multiple brand strategy is not going to change this especially when there is little difference in quality between the brands. “A multi-brand strategy requires a much higher cost structure to create and market a portfolio of uniquely branded offerings,” warns Bill Russo, president and CEO of Synergistics Ltd., a Beijing-based automotive consultancy. This money would ultimately be better spent on R&D to produce a smaller range of better quality vehicles that are not solely competitive on price and that have a definite design architecture. 

Full posting of this article is not allowed by the journal.  

Making it big: large cars and government procurement

China Automotive Review, October, 2013

Extracted quotes from Bill Russo:

“When China regulates it does so in regard to the stage of its industry and with a certain set of outcomes in mind,” says Bill Russo, president and CEO of Synergistics Ltd., a Beijing-based automotive consultancy.  Both FAW (Hongqi) and SAIC (Roewe) have a history of providing government cars. Hongqi dates back to 1958 and was used for high ranking government officials until they switched to favouring foreign cars. SAIC built the Phoenix and later the Shanghai SH760 for officials not important enough for a Hongqi.

It is also going to be difficult to persuade officials to drive domestic cars if they are perceived to be inferior. “The existing government fleet can hardly be downgraded,” says Russo.

Sales of these large cars so far have not lived up to expectation. Last year the Roewe 950 sold 4,905 compared to 86,101 for the Buick LaCrosse, on which it is based. “It isn’t about just having a product that meets the specifications but the esteem this class of buyer aspires to have,” says Russo.

Full posting of this article is not allowed by the journal.