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With the further advancement of the “Southern Cooperationâ€, the “Dual Brand Differentiation†strategy used by SAIC between Roewe and Grand Mercure is now being replicated into its short-board commercial vehicle sector.
After Ivano Chongqing Iveco Hongyan and Nanjing Iveco right, SAIC and Iveco, a subsidiary of the Fiat Group of Italy, have jointly released a product cooperation strategy of “dual brand differentiation positioningâ€, which is to strengthen the IVECO brand and at the same time, Promote the competitiveness of Yuejin and Hongyan product series.
According to the Shanghai Automotive (600104.SH) annual report, in 2007, SAIC Motor sold a total of more than 1.69 million vehicles, ranking first in the country; however, compared with the sales of 1.137 million passenger cars, as well as in the micro-commercial vehicle With more than 520,000 vehicles performing well, Shanghai Automotive’s “short board†defects in heavy-duty vehicles and passenger cars are evident: The newly established SAIC Iveco Hongyan sells only 24,000 heavy-duty commercial vehicles throughout the year, and is wholly owned by Shanghai. Huizhong is only an annual sales of several thousand units.
Following Shanghai Auto's wholly-owned holding of Huizhong last year, in order to speed up the shortcomings of commercial vehicles once again, Xiao Guopu, Vice President of SAIC Motor and Paul Venerino, President of Iveco, jointly announced during the Beijing Auto Show that the cooperation between SAIC and Iveco has been fully upgraded. The two parties will give full play to the product strategy of “dual brand differentiation positioningâ€. While strengthening Iveco brand products, they will also use internationalized technical quality and services, combined with localized cost strategies, to rapidly increase the leap forward and autonomy of Hongyan. The competitiveness of the brand's product line within the joint venture.
After the “Southern Cooperationâ€, SAIC Motor’s strategy of using the “Dual Brand Differentiation†strategy for Roewe and MG, both of which originated in the UK, has achieved results. Nowadays, SAIC Motor is back in the same old brand with decades of history. The strategy copied by Yuejin and Hongyan shows that SAIC Motor hopes that these two old brands can serve as a strategic vision for joint ventures to rejuvenate their own brands in the domestic market.†An insider of SAIC Commercial Vehicles told the China Business News. “This strategy specifically means that under the premise of strengthening the Iveco brand as well, Nanjing Iveco focuses on the leap forward brand of light and medium-sized series, while SAIC Iveco Hongyan focuses on the heavy-duty Hongyan brand.â€
In fact, as early as 1986, the first Iveco light passenger off the assembly line, Iveco began to test China. In 2007, Iveco made a clear "China's priority" development strategy, and its cooperation with SAIC also gradually entered the stage of strategic deepening. With the sequential listing and operation of SAIC Iveco Commercial Vehicle Investment Co., Ltd., SAIC Iveco Hongyan Commercial Vehicle Co., Ltd. and SAIC Fiat Powertrain Co., Ltd., Iveco has become the first international commercial vehicle company to complete its layout in China.
With the formal signing of the Shangnan Comprehensive Cooperation Agreement at the end of last year, Nanjing Iveco has also become a new starting point for cooperation between the two sides in the field of domestic light commercial vehicles. In 2007, Nanjing Iveco sold 24,900 vehicles, which was second only to Gold Cup in the sales of light passengers; and it occupied more than 50% in the high-end market. As the first Iveco-branded product launched by Nanjing Iveco after the “South-South Cooperationâ€, the PowerDaily has been released. The car is expected to be priced at 200,000 to 300,000 yuan, and the competitors will be locked in the price that Jiangling Motor launched earlier this year. The new Quanshun at 198,800 to 225,800 yuan.