By Cheng Yuan

On the evening of March 28, DFPV's brand-new semi-luxury car model A60 made its grand debut in Beijing. Before that, Guangzhou Automobile Group's Trumpchi GS5, the E-series of "Beijing Brand" and Chang'an EADO have been put onto the market. Besides, the Gleagle GX7, Great Wall Haval, and BYD's G6 that sports its proprietary 6-speed dual-clutch transmission, are all ready and waiting. Moreover, it's widely rumored that the Hongqi and Shanghai brands, which once carried the dreams and glory of China's auto industry, will come back after years of oblivion. At the beginning of 2012, Chinese-brand cars flocked to the market, attracting wide attention from the industry.

Last year, China's auto market witnessed the smallest growth in the past 13 years. It was a particularly difficult year for domestic brands, whose sales and market shares have slipped significantly. Industrial participants have used such phrases as "hard to continue" and "between life and death" to describe the distress of domestic brands. However, the slump didn't dishearten or depress these domestic brands. They didn't give up and wait for governmental aid. On the contrary, since the beginning of the year, what people see is a new round of counter-strike from these domestic brands, whose perseverance is truly admirable.

China's domestic brands of automobiles started slightly more than a decade ago, but truly significant efforts had not been made until 2004 when the government elevated "self-directed innovation" to the status of key "state policy". Prior to that, China's large auto groups were too much engaged in joint-venture business to develop proprietary brands. Those who established proprietary brands were mainly independent enterprises that were not qualified for joint-venture operation. These companies were small in scale and weak in financial strength, so they managed only to introduce a small number of car models that had low technology content. They mainly followed a reverse development pattern, namely: get a sample car from the market, tear it down, measure the parts, and copy it. They develop a car in a backward order, with the chassis and platform remaining basally the same and the appearance and configuration changed somewhat. Therefore, they have often been mocked as copycats. 

Now, only a decade later, China's self-owned automobile brands have been farther and farther apart from the "cloning" pattern. Large Chinese brands, such as FAW Group, DFM, SAIC, Chang'an, BAW, and GAC, and independent proprietary brands such as Geely, Chery, Great Wall, and BYD, have all invested billions, even tens of billions, of RMB in establishing their R&D centers. They employ hundreds of researchers, spend a lot of money on buying the world's top-notch R&D and testing equipments, employ numerous experienced overseas returnees, and employ senior researchers from home and abroad. They follow strict R&D procedure right from the beginning, establish R&D systems, and conduct "forward R&D" step by step, taking on the correct path of R&D. 

At the initial stage, domestic cars wedge into the market with their low price. They are mostly low-end models that take advantage of their low price in the market competition. But very soon, these domestic brands realize that the pattern of low quality and low price is not sustainable. So they all begin to opt for strategic reform and embark on the journey to the high end.

The meaning is two-fold here: first, building up medium- to high-end brands and products based on increasing R&D investment, examples including Chery's RIICH and RELY, SAIC's Roewe 750, FAW's Besturn B70, and BAC's "Beijing brand" sedans that are based on Saab's platform, among others. Geely has three separate brands: Emgrand, Gleagle, and Englon, Emgrand being its semi-luxury brand. Also, Chang'an has established a high-end vehicle base in Beijing. Second, fundamentally upgrading and updating their original low-end models. Geely is the typical example. Its upgraded products, Freedom Cruiser, KingKong, and Vision are thoroughly different, in a good way, from its previous products Merrie, Haoqing, and Uliou in terms of quality and technology level.  

Although these enterprises have taken different approaches, they all have achieved remarkable results. Some of them purchased platforms of advanced foreign brands, example including: SAIC's acquisition of the core technologies of century-old European brand Rover, BAC's buying Saab's major car models and power train, and Geely's purchase of the entire value chain of Volvo. Some integrate domestic and foreign high-quality resources and develop independently. For example, GAC's Trumpchi GS5 was developed based on the chassis of renowned high-performance European cars; the DVVT engine, GDI, and turbo supercharge technology developed by Chery independently have all reached international standard. Besides, by employing international design masters, the appearances of Chinese-brand cars have also basically reached international standard, their fashion elements and aesthetics having been recognized universally.

Of course, the road for domestic brands to success is still very long and filled with difficulties. Nonetheless, it has become a common sense across the industry that the establishment of powerful domestic brands is the only way that would lead China to become a powerful automobile country. With this knowledge in mind, Chinese brands will definitely be able to succeed.