Motor Vehicles and Parts News
- Brilliance marches to U.S., Europe
Date: 17-Sep-2007 Sources: (Shenzhen Daily)
IT was a devastating blow for the ambitious executives at Chinese automaker Brilliance Auto (CBAMF). Soon after a June crash test in Germany of its sleek BS6 midsize sedan rated the car as unsafe, a humiliating film of the mangled model circled the globe on YouTube. German automotive publications slammed the BS6 as a disaster on wheels.
Skeptics say the Brilliance quality stumble confirms that it will take Chinese automakers 10 years to learn how to build cars that can compete in Europe and the United States. But the rapid response of Brilliance to the quality debacle suggests it may move up the learning curve faster than anyone expects.
The company, which is China's 16th-largest automaker, was founded in 1990 and had sales of US$1.3 billion in 2006, largely on the strength of its minibus and auto-parts units. It had been traded on the New York Stock Exchange until July, when it de-listed its American Depositary Shares after German automotive consumer group ADAC tests were reported.
At a Sept. 11 press conference at the Frankfurt Auto Show, a German distributor for Brilliance announced the results of a new crash test on a reengineered pre-production prototype of the BS6. It claimed the revised model should win a three-star Euro NCAP rating, an average performance within the NCAP five-star system, and up sharply from the dismal one-star rating it earned in June. 'Sixty-five parts were changed. There's been a big improvement in the car's safety,'says Hans-Ulrich Sachs, head of HSO Motors Europe, which aims to sell Brilliance cars in Germany.
Brilliance, BMW Group's (BMWG) joint venture partner in China, boldly chose Germany as its base for expanding the European market with its elegant-looking sedans. It unveiled its stylish models at the upmarket Geneva Auto Show in March - the first serious effort by any Chinese automaker to win a foothold in the United States or Europe. Brilliance was eager to get a rapid read back from the most demanding car culture in the world, especially on its BS6 flagship. 'We believe that if we can sell cars to the high standards of Germans, we can succeed in the rest of the world,'says Ye Chi, head of global sales for Brilliance Auto.
As ADAC was announcing the failure of the BS6 in June, Brilliance was already running the revised BS6 through its quality paces. Tests were conducted at the full-scale crash-test facilities of IDIADA Automotive Technology in Tarragona, Spain. Brilliance now plans to bring the upgraded car to market in March, 2008, setting back its thrust into the European market by only six months. Brilliance's target: sales of 100,000 cars in Europe, or 0.8 percent of the market, within five years.
By mid-2008, Luxembourg-based HSO aims to have three models on the market: the BS6, the BS4 compact sedan, and the BC3 coupe. By yearend, Sachs hopes to add a station wagon and a small 'environmentally friendly?model. An SUV is targeted for 2009.
That demanding push into Europe assumes, of course, that production versions of all Brilliance cars receive three stars when tested by ADAC and other European quality associations, Sachs says. But he and Brilliance are confident they will. To ensure a better quality rating, Brilliance hired top European engineering houses to lead the reengineering effort.
Brilliance also has begun doing U.S. quality and crash tests on its cars, and is aiming to launch exports to the United States within two years. 'The regulations in the United States are more complicated than in Europe, because they differ from state to state,'Ye says. 'We want to be the first Chinese company to enter the European market. Our experience in Europe can help us enter the U.S. market.'
Sachs already has signed up 33 dealers in Germany, aiming for 100 by yearend, and is forecasting sales of 15,000 cars in 2008, as long as the Brilliance models meet EU standards. HSO had hoped to sell 15,000 cars this year, but now expects sales of 1,500 to 2,000. At the Frankfurt Auto show, Ye, head of overseas sales for Brilliance, met with 200 potential European dealers. Now, he is setting up importers for Spain and Portugal. 'Brilliance is the icebreaker for all the other Chinese manufacturers in Europe,'says Sachs, who helped open the European market to Korean automakers in the early 1990s.
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