China

With its faux English positioning and similar-sounding name, Roewe—Shanghai Automotive Industry Corp.'s newly launched car using Rover technology—could easily be dismissed as another rip-off in a culture of counterfeits.But the reality offers a more interesting glimpse into the early stages of Chinese brand development. Given the country's cheap labor force, China has quickly learned manufacturing skills from foreign companies. Catching up to the more sophisticated international branding and design standards is proving more difficult. That's not surprising, given that until a couple of decades ago, China was a command economy focused more on managing shortages than brand differentiation. In the case of Roewe, SAIC bought the technology rights for two Rover models, the 25 and the 75, last year from Britain's MG Rover Ltd. SAIC failed in its bid, however, for the Rover name, which went to Ford Motor Co. So SAIC devised Roewe (pronounced "Row-wee"), based on "loewe," the German word for lion, and the English word "we," for the power of the masses. "Roewe's logo integrates both European and Chinese elements. The 'R' represents royalty," explains Kenny Wong, managing director, WE Marketing Group, Roewe's agency. "We also included Chinese elements like lions with curly hair and a pole, which is a very Chinese idea and represents the Chinese people."In China, the country's first home-grown luxury brand will also be marketed under the moniker Rong Wei, which translates to "glorious power." In October, SAIC unveiled Roewe with a print pitch showing early examples of Chinese innovation, using a compass, gunpowder, paper and printing type. The tagline translates: "We used to propel the world with technology. Now the technologies of the modern world are harnessed by us." TV spots were shot in Spain—but are supposed to look like the U.K.—and feature old British cars and teapots.SAIC denies the Roewe name plays off the Rover association. However, the Chinese commercial landscape is strewn with sound-alike brands seeking institutional credibility through association with international giants. Wu-Mart is a popular retailer; copycat KFC outlets imitate the real ones. Starbucks sued a Chinese coffee shop chain whose name is identical; General Motors sued Chery Automotive Co., alleging the latter copied the design of its Chevy Spark. Roewe's high-end sedans are going on sale at the end of the month, with the 2.5 V6 entry-level car expected to be priced at about $30,000 and the 750i at $41,000.Chinese auto production was expected to exceed 7 million in 2006, up from 5.7 million in '05, with the country's auto output tripling in the last three years. As foreign auto companies rush into the market, alongside growing domestic players, there are already concerns about excess capacity, and the government is keen to boost exports. This month, DaimlerChryler's board votes on a proposed deal between Chrysler and Chery to import the latter's subcompacts to Europe and the U.S., in a watershed move that would put Chinese cars on American roads for the first time. SAIC, which is joint partners with VW and GM, has international ambitions for the car, which will start to be sold in the U.K. next year. With Roewe, WE's Wong says China will show the world how it can succeed where Western companies, like the defunct MG Rover, have failed. "The world is flat now," he says. "China should have the most powerful [auto] brand in the world."

Brand Marketing

China

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