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Roewe: Government sales solution to sharp competition

From China DailyMarch 08, 2013

China Daily – Roewe plans to focus on government procurement following the establishment of a separate marketing network earlier this month, said Chen Zhixin, general manager of SAIC Passenger Vehicle Co.

The Shanghai-headquartered company, whose parent has joint ventures with GM and Volkswagen, has struggled with sales of its wholly owned Roewe and MG brands. SAIC acquired rights to the iconic British sports car following its liquidation in 2005.

SAIC announced on Feb 7 that the company will establish new marketing departments for the two brands from March 1.

Following the separation, Roewe and MG will have their own dealership networks and branding teams, said the company.

Roewe will focus on making executive cars tailored for business and government clients, while MG will further stress its British lineage, the announcement said.

Despite floundering sales of the Roewe 750 executive car priced starting at 162,800 yuan ($26,100), the carmaker has ambitious plans for its 950 that went on sale last April with sticker prices of up to 319,900 yuan.

It is now looking to government procurement where it could provide minister-level sedans to a market long dominated by Audi.

Some leaders of the Shanghai municipal government have already replaced their foreign-brand sedans with Roewe 950s.

Crucial segment

Industry insiders say government procurement is crucial for Roewe to elevate its brand image and help its sales in the country's highly competitive passenger vehicle market.

SAIC Passenger Vehicle Co delivered just 200,000 of the 13.2 million cars sold in China last year, 128,000 of them the Roewe brand and the rest carrying the MG badge.

Audi's rise in China was largely the result of its early dominance as the car used by high-ranking government officials.

In 2011, the central government issued a new regulation on government car procurement that said cars used by officials lower than deputy minister level should cost less than 180,000 yuan and have engines smaller than 1.8 liters. Higher officials are allowed cars costing up to 450,000 yuan.

Last year the Ministry of Industry and Information Technology released a catalog of permitted new government cars, with all 400 models listed from domestic brands.

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