China's new/old auto brand
Chinese corporations have been flexing their new muscles and full wallets in search of one thing they can't produce easily and cheaply - a global brand. What's made the news recently is their failures.
It looks like Chinese appliance maker Qingdao Haier will lose out in its bid to buy the iconic US Maytag brand. But US rival Whirlpool had to up its bid considerably to stay in the game.
While more a resource than a branding issue, it looks like China semi-public oil company's CNOOC has been outbid to buy US oil company Unocal by US rival Chevron Texaco.
But several recent successes indicate that the onslaught is just beginning.
- A Chinese consortium of manufacturers and finance companies just bought Huffy, the #2 bicycle maker in the US. Huffy, making bikes since 1892, had gone bankrupt, not because of its bicycle business, but because of its unfortunate cash-depleting foray into other sports. Huffy has a strong relationship with Wal-Mart, and since the bicycles were being made in China anyway, this is not a big change, other than the survival of well-known US brand in Chinese hands.
- More striking perhaps, is the purchase of an iconic brand in the European auto industry by Nanjing Auto's, which has agreed to bail out bankrupt MG Rover, maker of sport cars and recreation vehicles.. The company plans to bring much of the manufacturing form the UK to China, though some final assembly work will take place in Britain. Now the challenge will be to revive a long moribund brand. 9teher is also a complication with Honda, which has rights to one Rover model which it helped design. There is also a problem with intellectual property rights to Rover designs with Chinese car rival SAIC (Shanghai Automotive Industry Corp.)
MG Rover is the remnant of the older British Leyland company that was formed in in 1968 from a series of mergers a number of British car companies, some with origins in the nineteenth century. Over the years brands like Land Rover and Jaguar were sold off, and finally the brands Mini, Triumph, MG, and Rover were bough by BMW in 1996. The MG and Rover brnds were soon spun back off in 2000.
From being clients and suppliers to large Western corporations, Chinese companies are looking to own and market worldwide brands. It's a new challenge, and the idea of buying brands rather than developing them shows some of the rush Chinese industry is in to exploit its current economic success.
