The US may have trounced China in the Olympic medal tables, but when it comes to electric cars, the Chinese are a few laps ahead at the track. During the first half of the year, China increased its lead over the US, with sales of 170,000 new energy vehicles (NEVs) compared with 64,000 in the American market.
Chinese sales continue to record high growth. They were up 162% in the six months to the end of June compared with the first half in 2015. The acceleration continued in July, with sales up 93% year-on-year to 38,000 units.
Given such strong momentum, local newspapers have been quick to pick up on the news that BMW Brilliance is closing the Beijing showroom for its joint venture’s only NEV sub-brand, the Zinoro 1E. It is one of just two showrooms for the electric vehicle, which was modelled on BMW’s X1 and launched in early 2014.
According to Time Weekly, BMW Brilliance made a mistake making the brand available only for lease rather than sale. Unlike Western consumers, their Chinese counterparts don’t appear so keen on the rental approach, the magazine believes.
Time Weekly notes that customers could purchase outright a comparable luxury brand for the same amount of money as a three-year lease for a Zinoro 1E.
The magazine also reports that there are just six compatible charging points in the whole of Beijing and flags the car’s low range (only about 150 kilometres because it is manufactured with low energy-density lithium-based batteries).
BMW Brilliance brand director Liang Jian has tried to put a brave face on the showroom closure, telling Time Weekly the group chose a leasing model because the electric car market was still in its infancy. “Customers who didn’t understand the sector could, therefore, take their first steps by leasing an electric car,” he said, indicating that shorter leases were supposed to encourage a wider range of drivers to experiment with the Zinoro.
However, Tycho De Feijter, founder of CarNewsChina.com, has another view on Zinoro. He says the concept of JV sub-brands was introduced by the Chinese government in 2011 to speed up technology transfers from foreign firms, which had successfully used their joint ventures to sell their own car brands rather than develop new ones with their Chinese partners.
Most complied with the new regulations, but did so half-heartedly and very few sub-brands have proven successful since then. One exception has been SAIC and General Motors’ marque: the Baojun (curiously its name sounds extremely similar to BMW’s Chinese brand name, which is Baoma and means ‘precious horse’. As we pointed out in our ranking in WiC283, Baoma is among the best names that a foreign multinational has come up with in China. The badge on a Baojun car also features a horse’s head, reinforcing the asssociation of its name with the ‘pre cious horse’ of the more famous BMW brand.).
That said, De Feijter says foreign manufacturers’ attitudes have been changing thanks to China’s NEV growth prospects, the government’s generous subsidies (only available to brands developed in China) and domestic competition from companies like BYD, which are outselling US rivals such as Tesla. While foreign car brands dominate the conventional auto market, this is not the case with NEVs, although some analysts are questioning the quality standards of the many new models Chinese manufacturers are pumping out.
Therefore while BMW Brilliance is discontinuing the Zinoro 1E, it says it will soon launch a plug-in hybrid vehicle called the Zinoro 60H. This is based on the BMW X1Li and will be eligible for full government subsidies, which can knock almost $14,000 off the cost of a car. And rather than try to lease it, it will be available for sale in the conventional fashion.
Meanwhile continuing growth in NEV sales is also being fuelled by the government’s infrastructure policy, with 85,000 public charging points available across China at the of June, up 65% since the end of 2015.
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