Controversy over China’s “automotive Aldi”

There was controversy at the Frankfurt Show as wildfire rumours suggested that one of the two Chinese exhibitors at the show was about to be thrown out, following objections by western car makers over allegations of design piracy.

A media scrum ensued, though no eviction notice was serves on China Automobile Deutschland, the German-based importer that is trying to turn itself into the “Aldi or Lidl of the car business”.

At the centre of the storm were two car models, the Jonway UFO and the Sheunghuang CEO. The former looks like a clone of the Toyota RAV4; the latter bears more than a passing resemblance to the BMW X3. In China, this sort of “design piracy” is rife, but = allowable.

However, Karl Schloessl, chairman of China Automobile Deutschland, believes there is no case to answer. “The CEO has been produced for more than three years now and is on sale in many world markets. It is not a copy. You can find inspiration from other cars – the last inspiration is the tyres – they’re always black!”

BMW should be careful, he warned. “Maybe they want to block the Chinese cars in Europe, but BMW is also trying to sell cars in China, and now the Chinese people are beginning to think, what can we do in China also? I think it is not good for BMW and it’s not good for the competitive market.”

CAD has been selling in Austria, Germany and Italy for nine months, and has sold 600 cars so far, with 800 cars on order. And Schloessl wants to take the concept to the UK: “We’re looking for an importer in England, and can deliver RHD in 60 days. We hope to find the right person and start to sell our SUVs in all European markets.” . Crash tests are under way for the models - he expects three or four Euro NCAP stars.

CAD concentrates on SUVs. Currently it offers three models – CEO, UFO and pick-up called Gonow– with five other new models coming in 2008. Here is where CAD’s very different business model kicks in – the cars are not sourced from a single Chinese manufacturer. Instead CAD shops around and buys specific models from different factories “We deal with five separate factories,” Schloessl said.

“We’re cheap and nice. Many people in Germany know Aldi ands Lidl – people want good quality at a cheap price – it’s the same with cars. We’re the Aldi and Lidl for the car market.”

Dealers use the China Automobile brand because Chinese manufacturers have very complicated names. “We tell them it’s better to have one name for Europe – it’s very complicated to transfer this concept to the Chinese – they all wanted to have their name on sale,” said Schloessl.