Developed and designed in China, for China

  • 19-Jun-2008 04:29 EDT
Li Nian front 14.jpg

Honda’s first Li Nian model, which is scheduled to enter production in 2010, uses a 1.8-L engine and is based on the Jazz mini hatchback.

For years, Chinese domestic automakers’ designs have been rooted in rehashed versions of older European and Japanese platforms such as the Citroën ZX, Daihatsu Charade and various minivans, Suzuki Alto, and Seat Ibiza and Toledo. In some cases, they are still producing (admittedly, quite heavily modified, but still using the same basic chassis architecture) such models. They have therefore completely missed out on the past two decades of foreign safety (crash performance and airbags, in particular) and emissions advances, not to mention advances in trim materials, which mean that noxious VOCs (volatile organic compounds) still seep out of some of the latest in mainland Chinese dashboard and car interior furnishings.

From this angle, it is not surprising that the government has criticized the domestics for so long, urging them to create original and innovative new models and brands that can compete on an international level. They are gradually beginning to respond, and this new trend was more apparent than ever at Auto China 2008, with original models from virtually all of the domestic players showing strong signs of being able to compete on a world-class level. The joint-venture automakers are under similar pressure to develop brands in China; brands that can be legally recognized as essentially containing Chinese intellectual property. The Honda and Volkswagen affiliates in China made some significant news in this regard at the show.

Guangzhou Honda, one of two of the Japanese automaker’s manufacturing joint ventures in China, displayed its first ever locally branded Chinese car at Auto China 2008 in Beijing in April.

“The brand’s intellectual property will be held by the joint venture rather than by Honda alone,” Fu Shoujie, Executive Vice President of Guangzhou Honda, explained to the China Daily newspaper at the announcement of the new Chinese brand in March 2007.

The new brand, to be known as Li Nian (Chinese for “concept”) will be of great satisfaction to the Chinese government. The government, frustrated at the success of sophisticated foreign and joint-venture brands in China and the relative lack of recognition for its domestic auto brands, has long urged local manufacturers to produce their own new, independent, in-house-developed and -styled Chinese-brand vehicles.

In 2006, domestic-brand vehicles in China held around a quarter of the Chinese auto market, the remainder being dominated by foreign brands. The Chinese government, when it announced its 11th Five-year plan (covering the years from 2006-2010) in 2006, expressed its desire that domestic brands should hold more than 60% of the market by the end of 2010.

Newly created independent brands, such as those by Honda, General Motors, Volkswagen, and other joint-venture and independent domestic automakers, should help the government to achieve this target. To do this, however, the new creations will need to offer internationally competitive levels of safety, emissions, performance, and reliability: only in this way will they be able to win the confidence of local buyers and—when exports begin to take off—those of the rest of the world.

While Honda provides the engineering and technical hardware for the new brand, the show concept vehicle was developed and designed by the $266-million Guangzhou Honda Automobile Research and Development Co., Ltd, which was established in Guangzhou in January 2007, exclusively to design and develop vehicles for the new brand—by the Chinese, for the Chinese.

The Li Nian brand, even down to the spiral logo and signature colors, has been extensively researched to appeal to China’s emerging young, trendy, and very upwardly mobile middle classes. Honda says that the key elements of the new Chinese brand values are sense of fashion; youthfulness and energy; and intimacy with the owner.

The concept car displayed at the launch of the new brand was a smallish five-door sports crossover built on a Honda Jazz chassis and equipped with a 1.8-L engine. Featuring neatly integrated Honda-esque head and tail lamps, a shallow glass-house, and rapidly upsweeping waistline, it looked for all the world like a four-wheel-drive Fit/Jazz on steroids. Others, less kind, perhaps, have described it as being strongly reminiscent of Ford’s Kuga crossover.

The first production Li Nian model will make its debut in 2010 and is likely to eventually develop into a range of lifestyle vehicles designed to suit China’s upwardly mobile new consumers. Interestingly, Honda’s neighbor in southern China is Guangzhou Toyota, whose Japanese partner launched the critically acclaimed Scion brand in the U.S. in 2002.

Shanghai Volkswagen, meanwhile, unveiled its own designed-exclusively-for-China model at Auto China 2008 in Beijing—the Lavida, the name of which is derived from Spanish to “represent a zest for life, hope, and passion.”

Volkswagen, in China for much longer than Honda (which arrived in 1998), has had decades of experience with its Jetta, Passat, and Santana models. Gradually, the company, through its two joint ventures, Shanghai Volkswagen and FAW-Volkswagen, has begun to modify its products to better suit the Chinese market. Recent examples have been the Bora HS (hatch-sport), which is essentially a Golf hatchback with Bora sedan nose and tail styling, and the Magotan (Volkswagen China’s flagship model), which has trim and interior styling to appeal directly to Chinese customers.

Shanghai Volkswagen revealed the Neeza concept vehicle at Auto China in Beijing in 2006. That roomy five-door wagon was the first to be exclusively designed for Chinese customers at Volkswagen’s Shanghai styling studio. It featured a particularly modern media-aware interior, with innovative instruments as well as Bluetooth and iPod connections.

The Lavida is based on the running gear of the new Bora sedan, which also debuted at the show, but it is a substantially larger car. It draws quite heavily on the Neeza show car’s exterior styling and modern lifestyle trimming and equipment, and it seemed to draw far larger crowds than the new Bora during Auto China 2008. Incidentally, the FAW-Volkswagen Sagitar, which is the China-produced version of the European Bora that is sold in other parts of the world, will continue to be sold in China as a separate model.

The new Lavida, at 4608 mm (181.4 in) long and 1743 mm (68.6 in) wide, is 468 mm (18.4 in) longer and 32 mm (1.3 in) narrower than the brand new Bora, with which it shares an identical 2610-mm (102.5-in) wheelbase. The Lavida’s overall nose and tail treatment is substantially more upmarket in appearance, using brighter, almond-shaped headlamps and rounder, more elaborate tail lamps in comparison to the Bora’s trapezoidal front units and simpler tail lamps.

Its passenger compartment is obviously longer, too, with a longer roof, longer and shallower-angle windshield, and steeper backlight, ending in a shorter trunk lid. The nose is longer and more imposing, too. The overall effect with the Lavida is of an altogether more luxurious and elegant vehicle, much more stylized and Phaeton-like in comparison to the squarer and more traditional, but admittedly smart and modern-looking, Bora.

Why should Volkswagen want to launch two similar vehicles based on an identical wheelbase?

“The two cars are essentially positioned in two different segments, with the one targeting the smaller-car market, which is perfect for the new Bora, of which we have already sold huge numbers in China; it is well established there,” said Markus Arend, Product Manager for the Lavida at Volkswagen Germany. “The new Lavida is more stylish, offering greater cabin space and more upmarket packaging. It complements the already very advanced Shanghai Volkswagen Passat Lingyu and FAW-Volkswagen PQ46—a long-wheelbase version of the Passat known as the Magotan in China. We need to sell both the Bora and the Lavida to properly fulfill the requirements of the Chinese market.”

Both models will offer two advanced four-cylinder engines, international levels of safety equipment, and the option of a six-speed Tiptronic automatic gearbox.

The Lavida is the first model developed entirely by Shanghai Volkswagen and plays an important role in Volkswagen’s global product strategy. The company describes the Lavida, which will be produced by Shanghai Volkswagen, as designed to be more “lifestyle oriented,” while the Bora, to be produced by FAW-Volkswagen, is “recommended especially for families as a practical, high-end, versatile, and dynamic companion for every day of the year.” The Bora, although it was designed in Germany, has also been systematically adapted to the wishes of modern Chinese society, says the company.

While it is too early to speak about export possibilities, Honda has already proven the viability of exporting cars made in China to developed markets with its Fit (the name of the Jazz model in China) model, which it produces in an exclusive export-only manufacturing facility in Guangzhou. These are already being exported to Germany and other European countries.

The Volkswagen Lavida could well find ready markets outside of the Chinese mainland should the opportunity arise. The Chinese-made Lavida and new Bora will be launched on the Chinese mainland this summer.

The Chinese government has been very vocal about its desire to encourage local manufacturers to prepare for export, setting tough criteria before it allows automakers to qualify for special export licenses. These two new Honda and Volkswagen vehicles, along with brand new in-house designs from home-grown Chery, Brilliance, Great Wall, and Geely, could be part of the solution to the government’s great desire for export.

Leaving aside the possibility for exports in the future, the fact that big guns Honda and Volkswagen (and Shanghai GM, with its Chinese-market Buick LaCrosse that was redesigned in China and launched in 2006) are prepared to pour, literally, billions of dollars into China-based R&D and then follow it up with vehicles completely designed in, and exclusively for, China, is iron-clad proof that the center of gravity of the auto industry is moving inexorably eastward.

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