Chinese Plagiarism Exasperate Jaguar Land Rover
The Chinese company Jiangling Motors introduced the Landwind X7 brand, a model similar to the Range Rover Evoque but three times cheaper.
In a year that can be considered as positive for Jaguar Land Rover (JLR), the company faces significant challenges in one of its main markets : China, one of them is unfair competition from local manufacturers. JRL as CEO, Ralf Speth, the Chinese authorities should already have sufficient capacity to stop the vehicle design plagiarism.
In an official statement issued by Speth he made a public denunciation of flagrant violation of the copyright. The Chinese company Jiangling Motors Landwind brand introduced the X7 in the auto show last year in Guangzhou. This vehicle is very similar to the Range Rover Evoque.
The company Jaguar Land Rover announced a formal protest, but local authorities have defended their automaker and allowed the mass production of the X7. According to Ralf Speth, China has no laws that prohibit copying foreign models, but expressed the hope that consumers in China can, in short term, will appreciate the difference between the original and the copy of the original product.
Logically the comparative advantage of BMW X7 on the Range Rover Evoque is price, almost three times cheaper than the original Evoque. In China, the price of the car is more than 3 times cheaper than the Range Rover Evoque, which in China is worth 400,000 Yuan (about 57,000 USD). It is expected that sales of the X7 will begin in July and August. «The cases of cloning real cars in China are unfortunate – said Ralf Speth Our company, together with a Chinese partner Chery is investing heavily in the development of the automotive industry in China and do not think that the Chinese authorities can be proud with these unfair practices that undermine the country’s credibility. What happened at the Fair in Guangzhou is very serious. «
Changes in Jaguar Land Rover China management.
After years of rapid growth in this relatively young market and vital for the luxury car sector, recent signs suggest JLR is going through a rough patch. After reporting poor results for the fourth quarter of fiscal year 2014-15, JLR has named Mark Bishop, former Managing Director of Porsche China, to lead its sales efforts in this demanding market. The new sales director in China try to revise its trade policy in China to boost distributors in the country. Demand for JLR cars fell 20 percent and profits fell by 32.7 percent between January and March in the Asian giant.
China’s difficulties are not unique to JLR. As we indicated in our previous on the luxury market in China items, the campaign against the corruption of officials to ban gifts for these has been detrimental, too, for most of the major foreign automakers, and even brands like BMW, which continue to post sales growth in China (6.4 percent in the first quarter of 2015) have seen a slowdown in it.
Additional concerns for foreign automakers are recent reforms by the big cities like Beijing, Shanghai and Shenzhen to limit carbon emissions. As part of these efforts, the cities are limiting the number of new license plates, which, of course, slow demand.
«We see some slowdown in the market and we read that many competitors are cutting prices (this was the case of GM. BMW and Volkswagen),» Ralf Speth, CEO of Jaguar Land Rover, said at a meeting with investors. «I can assure you that we will not continue these price reductions because we are confident in our strategy and positioning in the Chinese market.»
Overall sales growth.
Despite the worrying situation in China, JLR has announced a 5% increase in sales to EUR 30.2 billion, with earnings before taxes of EUR 3.6 billion in the fiscal year ending 03/31/2015. The company, based in West Midlands said it had sold more than 460,000 vehicles during the period, with more than eight in 10 of those cars sold abroad, reaffirming this automaker, as one of the leading exporters of Britain.
In a statement of management they indicated that «this was the fifth year of growth for the company, a period during which sales and employment in the company have doubled.» During the period from April 2014 to late March this year, the company unveiled three new models of Jaguar.
«Last year was one of significant achievements, with the expansion of our range of vehicles and our original manufacturing,» said Ralf Speth, «We are committed to delivering more growth this year, maintaining our relentless pace of launching new models and introduce new innovative technologies for our most demanding clients worldwide.»
Disclosure: The author is not responsible for the views expressed in the article. The text was written freely expressing ideas, without receiving any compensation. The author has no business relationship with any of the companies whose shares are listed in this article.