Bad Habits Die Hard for Chinese Automakers
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Eight years ago， Lifan Auto， a car manufacturer based in Chungking City， was accused by German luxury automaker BMW of copying the latter’s industrial design. And now history repeats itself between another Chinese automaker and Land Rover. The Land Wind X7， a new Chinese SUV model， appears to look very similar to the Range Rover Evoque， a model that Jaguar Land Rover recently started producing in China. Ironically enough， both models were showcased in the Guang- zhou Auto Show in last November.
And Land Rover is not flattered. According to earlier reports， the UKbased luxury automaker is planning to complain to Chinese authorities about the “blatant knock-off of one of its models”. Once again the knock-off problem of Chinese auto industry is in the eye of storm.
Rage of Land Rover
There is no denying the striking resemblance between Land Wind X7 and the award-winning design of Range Rover Evoque， one of Land Rover’s best-selling models. The interior of Land Wind is said to be similar to the Evoque too， with premium seats and a larger touch-screen that runs the Android operating system. Even its English name “Land Wind” is confusing.
Land Wind is a Chinese carmaker created as a joint venture between Changan Auto and Jiangling Motors Corporation. Land Wind’s X7 SUV is powered by 2.0 L turbocharged fourcylinder engine connected to an eight speed automatic gearbox or a six speed manual transmission.
While the Land Rover Evoque is priced from around 40000 pounds， the Land Wind X7 goes on sale for just roughly 14000 pounds， about one third the price of a Chinese-built Evoque.
Both the Land Wind X7 and the Land Rover Evoque had their global debut at the 2014 Guangzhou Auto Show. As the very first model manufactured by Chery Jaguar Land Rover Corporate， the joint venture between Land Rover and China’s own Chery Auto， Evoque was expected to attract a huge amount of attention from Chinese consumers at the Auto Show. However， the party ended up spoiled by Land Wind X7， which was an absolute star of the show.
The similarity between the two models was brought to the attention of Jaguar Land Rover when its design chief Ian Callum tweeted about it. And the luxury carmaker reacted strongly to the situation. Its CEO Dr. Ralf Speth who is not pleased claims that the Land Wind X7 qualifies as an intellectual property theft and he will approach Chinese officials for the matter.
“The fact that this kind of copying is still ongoing in China is very disappointing. The simple principle is that it is not something that should happen； the intellectual property of this model is owned by Jaguar Land Rover and if you break that IP， you are in breach of international regulations that apply all around the world，” Speth said earlier. According to an insider， Land Rover is weighing up its options in regards to the new Land Wind X7 SUV and an investigation is underway.
The executive also said that Land Rover has invested heavily in China with its joint venture partner Chery.“That commitment is based on a clear business plan that allows us to hit our sales targets at clear prices， and what Land Wind has done with the X7 damages our business in China，” Speth said. He claimed that the company “will take whatever steps are appropriate".
“I will talk to China’s officials and I will talk to our partners at Chery to find a way around this situation. I cannot imagine Chinese officials will be happy at any actions that undermine the credibility of the country. What we have seen today is not correct，” Speth added.
To the accusation， Land Wind has also responded assertively： “X7 is a medium to high-end SUV developed independently by Jiangling Motor Holdings（JMH）. Similar or not， it’s just a matter of opinion which is subject to subjectivity. As a responsible local company， we have been conforming to national laws and industry standards. Abiding by the law is unarguably a matter of principle for us.”
Although Land Rover is not going down without a fight to protect the company’s intellectual property， it is unlikely much will be achieved through a lawsuit under the circumstances， as the exterior design of Land Wind X7 was patented as early as when it was still in the research and development phase. Land Rover Evoque went on sale in China way before Land Wind X7， but sadly it neglected to file for a patent. Land Rover has forged a joint venture with Chery Automobile， which means the Range Rover Evoque is also built on the Chinese mainland by said company. It is virtually impossible for Land Rover to win the lawsuit without a patent on design.
According to industry analysts， the best Land Rover can hope for is that the vehicles of X7 will not be exported to one of the Evoque’s major markets. And another potential path Land Rover could take would be to put pressure on Ford， which has a 31 percent stake in JMH. JMH is also building the Ford Australia-developed Everest SUV for the Chinese market from early 2015.
Notably， the Land Wind X7’s name will also clash with the upcoming BMW X7 SUV， although Chinese law dictates that alpha-numeric combinations cannot be copyrighted.
Latent Risks of Cloning
As a matter of fact， Jaguar Land Rover and Land Wind were engaged in a conflict eight years ago， long before the X7 incident. At that time， Land Wind launched one of their new models in the EU market， and was took to court by Jaguar Land Rover for its logo（Land Wind all in capital letters） looked very similar to Land Rover’s. However， the dispute ended up with Land Wind winning the lawsuit.
Analysts say that even if Land Wind didn’t file for patent for the X7， it still can be tricky to legally identify a patent infringement of car exterior designs， since there are so far no measurable standards to apply in the differentiation of deliberate plagiarism and legitimate use for reference.
“Filing for appearance patent of a car model requires five pictures of it： front， back， profile， right above and inclined above. It probably will be defined as infringement if the two models look similar in all of the five angles. As long as any one pair of pictures doesn’t match， it doesn’t constitute infringement. ” said Wang Chuanfu， President of BYD Auto， another Chinese carmaker that was previously involved in clone scandals.
H o w e v e r ，“clone” seems to have become a label of China’s selfowned auto brands anyway， and X7 is just a tip of the ice， a miniature of the whole domestic industry. In 2007， BMW sued against Shuanghuan Auto， another Chinese automaker， for copying its X5 CEO models. In 2008， Lifan 320 was accused of being highly similar to BMW’s Mini Cooper. Shuanghuan was also sued by Honda Motor for cloning the latter’s CR-V model.
For China’s young auto brands， copying can save a lot of time and energy in research and development. It also allows the plagiarist skip the step of market survey and speed up the renewal of product lines. And according to insiders， considering the price gap and totally different target consumers， X7 won’t necessarily take market shares from the Land Rover Evoque， at least not directly. But on the other hand， it will fatally damage the future of the brand in the long run.
Some Chinese auto analysts believe that proper use for reference in car design is unavoidable and understandable in the growing of self-owned brands. However， some automakers now seem to have become a little too proficient in how to avoid legal risks. By learning from mature brands， self-owned brands shall concentrate on enhancing their own abilities in research and development in order to sharpen the competitiveness edge of their own brands. Unfortunately， many of the carmakers have chosen to take the short cut by imitating， or more boldly， cloning well-known designs， which will only lead them to stronger technology dependance on others and bury the next hidden trouble for the future.
The Only Route of Positive Development
The cloning issue repeatedly brought up by international counterparts obviously has struck a nerve of domestic carmakers， highlighting their long-standing problem of excessive dependance on foreign technologies. Especially when their home market is the world’s largest and still growing， domestic producers should be more prepared.
Cloning habits and shortsightedness of domestic carmakers have become the biggest hurdle that stops them from moving upscale. Up to now domestic brands only account for less than half of their own market.
“Copycats can only imitate the appearance of existing products. Without mastering core technologies and configurations， domestic brands can hardly improve their qualities to a level that will do justice to the appearances. Meanwhile， a copycat is destined to be subject to the original model， which means it will be impossible for them to go anywhere beyond the prototype.”Yan Jinghui， vice-general manager of Beijing Asian Sports Village Auto Trade Market， said earlier.
As Yan Jinghui has pointed out：“Independent research and development is more risky， more demanding in investment and yet promises no quick results， but it is unarguably the only right route for China’s domestic auto industry.”
Feeling the squeeze in the market， some domestic brands start to realize the importance of independent research and development. Although some of them haven’t drop the bad habits of imitating and excessive reference， they are certainly trying harder to become less reliant on ohters’ designs or core technologies， including the crucial power- train.
Major domestic carmakers such as Beijing Automotive Industry Holding Corporation （BAIC）， Shanghai Automotive Industry Corporation（SAIC）， Guangzhou Automotive Group Corporation （GAC）， Geely， Great Wall and Hauchen have successfully established their own patterns of positive research and development and become increasingly efficient in branding. Great Wall， Geely and their local rivals Chery and BYD are scaling down ambitious expansion plans and focusing on improving quality. Some hired managers or designers with experience at Mercedes Benz and other foreign producers.
According to industry group， the China Association of Automobile Manufacturers， the whole domestic car industry saw a negative growth in 2014. However， some of the domestic brands managed to gain profits against the current. Not surprisingly， those who have made a break with their past errors and gone through a painful transition period now are tasting the fruits of victory.
During the last Guangzhou Auto Show， as a substantial proof of the growth of China’s domestic brands， self-developed models like Chery’s Ar- rizo3， Arrizo7， GAC’s Chuanqi GA6 and Great Wall’s Hafu H9 successfully grabbed the attention of the crowd. They are challenging industry leaders like General Motors， Volkswagen and Toyota in the fast-growing chinese market. Some of them are making inroads and starting to establish names overseas with an eye toward eventually breaking into big western markets.
“Chery is establishing its own ‘Arrizo standards’ by investing in positive development. We are reforming not only the research and development system， but also the marketing pattern. The revival in sales shows that our reform is taking effect and our efforts start to pan out. The process is slow but steady，”said Huang Huaqiong， assistant general manager of Chery.
As auto analyst Jia Xinguang pointed out， positive development will become a prevailing trend of China’s home-grown automakers. It will not only bring valuable addition to their competitiveness， but also help domestic brands to accumulate word-of-mouth reputations at sales terminals and eventually upgrade their power of brand to another level.