Baojun 630

Back in July 2010, GM, via its local Chinese JV SAIC-GM-Wuling (SGMW) announced the launch of its budget sub-brand for the Chinese market - Baojun. By November 2010, the first Baojun product was introduced to the Chinese media - the Baojun 630 sedan.

The initial plan was to launch the car by July 2011, but was later delayed to August 2011, not because SGMW could not roll out the cars but because SGMW could not certify enough dealers on time. The plan for the Baojun brand is to be an independent sub-brand away from GM, having its own dealer network, so as not to dilute the existing brand positioning of GM's brands. Baojun is targeted at first time car buyers in Tier-2 cities. In China, cities are categorized into 3 tiers. There are 3 Tier-1 cities - Shanghai, Beijing and Guangzhou. Tier-2 cities are usually the provincial capitals. China is not divided into states, but into provinces. There are over 20 Tier-2 cities, the larger ones include Chengdu, Chongqing, Kunming, Hangzhou.

SGMW has now confirmed that the Baojun 630 will be launched in August 2011, with two engine option - a 1.5-liter and 1.8-liter petrol. The Baojun 630 is about the size of a Toyota Corolla sedan. The key attraction to the Baojun 630 however, is its price, estimated to be below RMB 100,000. GM has yet to announce the Baojun 630's price, but it is rumoured to be within the RMB 70,000 to RMB 90,000 range. As a comparison, a Toyota Vios in China only starts at RMB 89,500 (around RM45,000), stretching all the way to RMB 123,900 (around RM 62,000).

Just for the sake of comparison, if the same quantum of price premium between a base model Chinese market Toyota Vios and a Baojun 630 sedan is applied to our local vehicle pricing context, the Baojun would sell at around RM 55,700, or 21.7% lower than the RM 69,000 asking price for a Vios 1.5J Manual here. But that's not all, the base model Chinese market Vios that we are referring to is a 1.3-liter version, meaning that it is cheaper! Chinese market Vios gets two engine option; a 1.3-liter VVT-i 2NZ-FE and a 1.6-liter Dual VVT-i 1ZR-FE. Over here, you would have to pay up to Corolla Altis level money to get the same Dual VVT-i engine, in the Altis 1.6E. The sheer volume of sales in China gives Chinese distributors extremely strong leverage asking for the best stuff from the manufacturing principal.

But the point of this article is not really about the Baojun, as it is not quite relevant to those of us in Malaysia. Lately, I have been thinking and talking to some people regarding the coming wave of Chinese cars. We laugh and scoff at the first wave Chinese cars, dinky little Chery QQs which are really Chevy Spark knockoffs and Geely models in Western markets. But Chinese brands have shown tremendous improvement with each successive new model iteration and it is only a matter of time before they start exporting cars with Korean / Japanese / European like qualities. And their sheer volume will allow Chinese car makers to price them substantially lower than their competitors. In a free market, eventually Chinese cars, built with Western technology and designed by European design studios (most of which are already Chinese owned now) will start flooding the market, in the same way Chinese made Lenovo computers and Haier home electrical appliances are challenging the likes of Dell and LG. Why should the car market be any different? So what happens then? The question is even more critical for mainstream budget car brands, like Suzukis, Daihatsus or even our own national brands. I don't think we have seen this sort of undercutting prices even back in the days when the Koreans and Japanese are starting to ramp up their overseas sales operations.

The Baojun is a pretty compelling proposition. It looks pretty good, a C-segment sedan that is priced more like a B-segment hatchback, let alone a B-segment sedan. GM did not officially mention this, but automotive industry sources indicate that the Baojun 630 is a development of the old Chevrolet Optra's / Buick Excelle (Chinese market) J-series platform, which no longer meets European passive safety nor meets current user's competitive matrix requirements. But it is still good enough as a budget car for a developing market, and frankly, it is still better than many equivalent budget Japanese offerings we have here.

Interestingly, the name Baojun means treasure horse in Chinese. BMW in China is known as Baoma, which also carries a similar meaning. SAIC-GM-Wuling should not be confused with SGM (Shanghai-General Motors). The Wuling part of the name refers to Liuzhou Wuling Motors Co, a separate entity from Shanghai Automotive Industry Corporation (SAIC) and General Motors (GM).

When GM entered China, its local partner was SAIC, creating Shanghai-GM (SGM). Wuling is a minivan specialist who later entered into agreement with SGM, creating SGMW. Wuling branded minivans are the most popular minivans in China, and if I am not mistaken, is the best selling minivan in the world. Baojun is owned by SGMW. Typical GM brands like Chevrolet, Buick and Cadillac are under SGM, while Roewe and MG are exclusively owned by SAIC alone.