The last year has seen the emergence of several new brands, including: Trumpchi (传琪) from GAIC(Guangzhou Automobile Industry Group); Oley(欧朗) from FAW; Venucia(启辰) from Dongfeng-Nissia; Shouwang(首望) from Beijing Hyundai; Kaili(开利) from FAW-VolksWagen; as well as the Lotus(路特斯) and Qoros(观致) from Chery. Rumors about the development of new brands surround other joint ventures as well, such as: CBA(BMW-Brilliance); Chang’an-Ford; Chang’an-Suzuki; Chang’an-PSA. Furthermore, BAIC is also expected to announce a new brand in the near future.

The owners of these new brands fall into three main groups: joint ventures; major Chinese automakers; and multinational companies new to Chinese markets. Each group has its reasons to promote the birth of new brands. The big Chinese automakers are under pressure from the government to develop independent brands as they already receive ample resources to support such development. New comers, such as Lotus, are fascinated by the growth of the Chinese automotive market and are eager to push their new brands forward.

As for the joint ventures, debate has continued for years surrounding government funding or support for the development of these joint ventures’ independent brands. One side contends that the independent brands of these joint ventures are the most fundamental threat facing Chinese domestic brands. While the other side argues that they represent the only opportunity for the Chinese partners in these joint ventures to gain the essential technical support of foreign partners.

Recent developments suggest that the government has now made a clear indication as to which side it falls on. The market has interpreted the conditions for the approval of new joint ventures as favoring the development of independent brands and new energy vehicles. The auto industry has welcomed the clear position adopted by the government. Previously, joint ventures have often been limited to the sale of foreign companies’ existing models in Chinese markets, rather than developing its own technology. However, with the development of an independent brand, a set of independent R&D systems are established accordingly and the domestic partners will be able to truly accumulate necessary technology. Furthermore, these independent brands are expected to serve to further align the interests of foreign and Chinese partners with each other.

Another interpretation is based on the 12th five-year plan. The goal outlined in the plan is for independent brands’ share of the passenger car market to, eventually, exceed 50%, with independent brands achieving a 40% market share by 2015. To reach the target, joint venture independent brands are considered important contributors.

Altogether, these recent developments hint at a significantly increased role for independent brands in the Chinese auto market with this first batch being merely the beginning of a growing trend.

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