Sat, Nov 09, 2019 - Page 10 News List

Aiways SUV seeks Europe foothold

Bloomberg

An Aiways propulsion system is displayed ahead of the Geneva International Motor Show in Switzerland on March 6.

Photo: AFP

A US$28,000 SUV looks set to become the first Chinese entrant in Europe’s electric-vehicle market, betting that its competitive price would help draw customers away from the likes of Volkswagen AG and Tesla Inc.

Shanghai-based automaker Aiways (愛馳汽車) has secured permits and certifications for a European launch and plans to start sales in the second quarter of next year, cofounder Fu Qiang (付強) said in an interview.

The firm is to start selling the vehicle, called U5, in China this month.

While the European variant is to be adapted to local tastes and regulatory requirements, Aiways could have a tough time winning over buyers in a market dominated by local, US and Japanese brands for decades. The debut will be watched closely by dozens of other Chinese electric-vehicle makers with global ambitions.

“I believe we will be the first,” Fu said in Shanghai.

Others “are still in the preparation period” or even further away with their plans, he said.

A successful domestic launch by the less-than-three-year-old company would defy rapidly souring demand trends in the broader Chinese electric-vehicle market. The industry’s sales have fallen for three straight months through September as the government — after spending billions of yuan to nurture the industry — scaled back subsidies this year.

Penetrating the European market would mark a historic shift in its own right. European brands’ sales in China have for many years underpinned much of the continent’s manufacturing strength, and countries like Germany are ramping up efforts to support their own expensive shift toward electric vehicles as global competition picks up.

Convincing European customers that a Chinese vehicle can meet their expectations is one of Fu’s main challenges.

Failures by other Chinese companies have left consumers with a poor image of the country’s products, he said.

At the same time, he is hopeful that more recent successes by Chinese consumer-goods and smartphone producers might have built up trust.

The U5’s launch in China is scheduled for Nov. 29 and is to involve a mix of marketing strategies, including showrooms in larger cities and online sales. The domestic price will be 200,000 yuan to 300,000 yuan (US$29,000 to US$43,000).

In Europe, the company would try to reach consumers through pop-up stores, leasing offers and local partners, with Norway, the Netherlands and Germany among the key targets, Fu said.

The planned starting price for the most basic version is about 25,000 euros (US$28,000), which could give Aiways an edge.

While small electric vehicles from Volkswagen and its competitors start from less than 30,000 euros, electric SUVs easily go for twice that or more. Tesla’s Model X SUV can cost more than 100,000 euros in Europe.

If Aiways is successful, it would in part be because of its use of German know-how. Since the beginning, Fu has worked closely with his German business partner, Roland Gumpert, a former Audi engineer and automaking veteran. Their joint venture, Gumpert Aiways, now acts as the Chinese company’s Ingolstadt, Germany-based research-and-development center.

“Even though most of our engineers are Chinese, we say we are a company based on German technology,” Fu said.

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