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“We’re here and we mean business”
You know the form. Unheard-of Chinese firm releases grainy pictures of BMW-rivalling saloon, promises to sell a BILLION cars in Europe within a couple of years. BMW-rivalling saloon turns out to be made of paper maiche and leftover Austin Metro parts, Chinese company disappears.
But Qoros is a bit different. At the recent Geneva show, the Chinese firm we briefly visited before showed three new cars - a production Focus-sized saloon and an estate and SUV concept based on the same platform. TG had a poke around (along with approximately two hundred worried-looking senior execs from Europe’s finest car companies) and the Qoroses seemed entirely the business: finished to European standards, and good to look at (albeit somehow resembling every car that VW, Audi and BMW make, all at the same time). As we’ve already seen, these guys mean business.
But there’s more to come from Qoros. TG sat down with Daniel Backman, Director of Strategy, to find out exactly how much more. A 20-model range and half a million cars a year… within a decade? Don’t bet against it. Europe, the Chinese are coming. You’ve been warned…
TG: Where do you fit within the market in Europe? What marques are you targeting?
DB: All of the established European brands are our competitors. Volkswagen, Skoda, Opel, Toyota, Kia, Hyundai, the French guys. All those are where we’ll be playing. We’re not going to be the cheapest brand in the market, but we’re going to have the best value for money. We have a high level of equipment - big wheels, LED lamps, eight-inch screens as standard which is connected to the cloud. Navigation, parking cameras: all the things you find in bigger, more expensive cars, you’ll find on ours.
How big will Qoros be in Europe?
We’ve not set any sales aspirations. Our first aim is to be recognised in Europe as a quality, serious player, value for money. A good buy. If we achieve that, sales will follow. The initial capacity in our Chinese factory is 150,000 cars. We believe that capacity will maybe last us two years and then we need to expand. We can easily expand the factory to 250,000, then later 450,000 cars. Our main priority at the beginning is to make sure that China gets a good start. When we open in China, we’re going to have 80 dealers. We launch this year in Europe in one market.
Do you know which market?
We do know, but we’re not telling you yet. It’s an Eastern European market. Then we’ll move further into Europe. When capacity limitations hit the roof we’ll start thinking about a second plant.
When do the first production cars go on sale in China?
The second half of this year. Quarter Four. We’re also considering having a second plant somewhere in Europe, closer to the customers.
How can you compete on quality with the established European, Japanese and Korean brands?
First of all, we have the same suppliers. All of our suppliers are global suppliers that you know from any other brand. Secondly, we built a brand new factory. We have state of the art equipment and it’s built to our demands. The head of the factory is the guy who built the Chattanooga plant for VW in the US, the guy who runs the factory is from BMW. All of the engineering work in done in Europe with Magna Steyr. We have an international car, it’s just based in China.
What advantages does being based in China give you?
The speed of things is a bit quicker in China. People work harder and are more efficient. All the suppliers, even if they’re European, have manufacturing in China. And it’s a bit cheaper. The cost-base we have helps us become a competitor. It helps us to offer a lot of equipment in the car.
In the UK at least, the perception of Chinese cars isn’t very positive. But it seems you haven’t attempted to disguise the Chinese heritage?
We are proud of the product we have. The fact that we’re based in China is a benefit in terms of the speed of things, but also this is the most booming car market in the world, and there’s a lot of talent over there. We’re not hiding the fact we’re Chinese, but the car is an international car for international customers. It could be built anywhere, but it just happens to be built in China.
Which buyers are you aiming at?
In China, car buyers are young, 25 to 35, they live in the cities of 10 million people or more. They’ve never owned a car before but they all have a smartphone, so they’re all used to hi-tech stuff. We started looking at what they want - they want quality, they want good design, they want reliability, but they also want connected infotainment.
Don’t they want Western brands too?
Brand is not so important. Chinese people are very used to being bombarded with new brands, because all of the global brands want to enter into China where there’s a lot of money, and they’re very used to exploring new brands. Once they’ve seen our products and seen the story we have, they’ll appreciate the brand.
Why is your first production car a saloon/sedan rather than a hatch?
The 3 is a C-segment sedan. Last year, seven million cars like that were sold in China. It’s half of the market. So of course that’s the first car we needed. Hatchbacks are very popular in China, as are crossovers, SUVs - estate wagons not so much, but we think we might be able to create a demand there. The platform is all very modular, so we can make shorter cars, longer cars, higher cars, lower cars, all using little effort to change the car. We plan to launch a new model every six to 12 months. The concepts you see [the crossover and the estate] will be out in a year or two, and we have a very ambitious product portfolio.
Do you eventually see Qoros having a range to rival Ford or Audi?
Absolutely. Maybe not Audi, but who knows? We have a vision that in the year 2022 we could have 20 models.
How do you guarantee the quality of the product to draw people in? The Korean manufacturers did it with extended warranties - do you have a similar plan?
Obviously we need that sort of plan to overcome the fear of buying a Chinese brand. But if you remember 40 years ago, when the Japanese brands started coming, now we all know they are there. Ten years ago we had the Koreans, now they’re established. We are the next ones. I think people have been waiting for the first serious Chinese brand. Now we’re here, and I don’t think it’s going to take people 10 years to realise. The car speaks for itself. We are targeting top scores in European crash tests.
It’ll undergo Euro NCAP tests?
Of course. Later this year.
Why did you bring a range of cars, rather than just one, to Geneva?
We want to show we have a plan that extends beyond a single car. We’re a long way into the development of these cars and more besides. We have more than these three cars in the plan. We’re here and we mean business, it’s not just a one car company. There is a future.
You bought in former Mini designer Gert Hildebrand on the design side. Have you brought in more high-level names across other parts of the company?
Our head of engineering is Klaus Schmidt, who worked for 30 years for BMW’s M-Division, so he knows a bit about good cars. The whole safety team came from Saab, and they build safe cars. I came from Volvo. We have people from Volkswagen of course, from Porsche and Ferrari. We have guys working on connectivity who came from TomTom. So they’re not all from the automotive industry.
What’s the relationship between Qoros and Chery?
Chery owns 50 per cent of Qoros, the other 50 per cent is owned by Israel Corp. Chery is an investor, but we have no shared technology or cooperation any development work, they’re just owners. They were very helpful in setting up the company and getting land for the factory. They opened a lot of doors. Our engines will be built in the Chery factory, but they’ve been designed by us - we worked with Porsche.
If all goes well, when can we expect to see Qoros in the UK?
Right now, we don’t have a decision to do right-hand drive. But I have a team of people looking at it, to build a case around it. We’ve seen enormous interest from the UK, and from other right-hand drive markets - Australia, Japan, South Africa, so I think it’s just a matter of time until we take the decision. Same goes for diesels. Right now we only have petrol engines. UK? I won’t give you a date, but within a few years we should be able to sell cars in Britain…