BMW and GWM enter joint venture
GERMANY was last week proud to announce that BMW had signed a joint venture with Great Wall Motors.
If you thought it should be the newcomer Chinese car builder who must be proud to work with a 100-year old European vehicle builder, you’d be wrong. It’s all in the numbers. GWM owns four brands, namely Haval, Great Wall, WEY and Euler. In the 2016-17 fiscus, the company sold more than one million vehicles just in China.
BMW Group also owns four brands — BMW, Mini, Rolls-Royce and the BMW Motorrad motorbikes — and last year reported its best year yet, with 2 088 283 sales (3 362 of which were Rolls-Royces).
BMW sales went down in America, remained stable in Europe but grew by 15,1% in China, which is currently BMW’s largest market with 594 388 units sold in 2017.
This is not even a drop in the ocean in China, which now has over 772 million Internet users, according to CEO of the South
China Morning Post, Gary Lui. Lui said in a recent TED talk this is more people than the entire populations of the United States, Russia, Germany, the United Kingdom, France and Canada combined.
BMW have their sights on this vast number of up-and-coming middle-class buyers in a 50-50 joint venture with GWM, called “Spotlight Automotive”.
For Chinese buyers, the spotlight will certainly fall on value for money, as the premium prices BMW charges for its X-series cannot compete with the value offering of the Haval H-series of sport utility vehicles.
The same applies in South Africa, where Haval dealers sell the H2, H3 and H6, three cars that can compete head-on with any brand from Germany and what they cannot match in reputation, they make up for in low prices, high quality finishing and excellent build quality.
Tyrone Alberts, Haval’s national sales manager, said in making the Haval range, GWM steered clear of the Chinese design-by-tracing paper phenomenon. Instead, the giant Chinese corporation headhunted top international people to design everything from the interior and incar technology to the gearboxes and engines. “The amount of money and skills being poured into this brand is simply phenomenal,” said Alberts.
For instance, Pierre Leclercq, previously design chief for BMW’s M division, was responsible for the design of current Havals, while Ramon Ginah, previously Alfa Romeo’s chief interior designer, is also on board.
Its Research and Development (R&D) facility in the city of Baoding, meanwhile, is a veritable mini-city itself, with around 10 000 employees, and an investment cost of some five billion Chinese yuan (around R10 billion). “Yet Haval’s price point remains incredibly competitive. Since launch pricing has stayed static bar on the H1 whose pricing was increased by a mere R5 000, and that now includes a three-year or 45 000 km service plan,” says Tyrone. “We want to show that we are here to build the brand and establish Haval as one of the leading SUV nameplates in SA in terms of both volume — and quality,” said Alberts.
Haval is next importing the H9, which will challenge Toyota Prado drivers to change their view on Chinese 4x4s.
Wheels took the Haval H6 over several hundred kilometres of Wild Coast dirt roads and apart from a slow puncture, could get neither squeak nor rattles from GWM’s premium brand.