Manufacturing News

Big automakers set to sell same car to game Beijing rules

Automakers typically want their cars to stand out. But China’s push for greener vehicles is prompting Toyota, Fiat Chrysler Automobiles, Honda and Mitsubishi to resort to an unusual move: They’re set to sell the same vehicle.

The four carmakers all plan to sell an electrified crossover developed by Guangzhou Automobile Group Co., the Chinese manufacturing partner they share. Each brand will have its own name emblazoned at the rear of the vehicle, but the look will be the same. The approach -- atypical in an industry in which distinct design is key to gaining an edge -- will help them meet China’s new, stricter emissions standards more quickly, giving them time to keep working on their own unique electric models.

Carmakers are trying various tactics to avoid being placed at a disadvantage by the new regulations in the world’s largest auto market. Designed to make China’s roads greener, the rules favor electric-car makers while presenting a threat to the profit margins of the vast majority of auto manufacturers that still rely on gas guzzlers for most of their revenue.

Toyota Motor Corp. is selling a full-electric version of the Guangzhou Auto crossover, called GS4, while Mitsubishi Motors Corp. offers EV and plug-in hybrid variants. FCA and Honda Motor Co. are planning gasoline-hybrid versions of the vehicle, according to research firm IHS Markit.

Cap and trade
The variants will all carry Guangzhou Auto’s Trumpchi badge in the front, and the name of the foreign maker’s local joint venture on the back. Prices vary by specifications offered by each carmaker. An EV model sold by Mitsubishi, named Eupheme, costs about $20,000, while Toyota’s version named ix4 starts from about $23,600.

Under China’s so-called cap-and-trade policy, automakers must obtain a new-energy vehicle score -- which is linked to the production of various types of zero- and low-emission vehicles -- starting in January 2019. Those who fail to comply must buy credits.

Guangzhou Auto started sales of the gasoline-powered Trumpchi GS4 in 2015 and it quickly became its best-selling model. It added a plug-in hybrid version in June 2017 and sold 6,707 units of that variant this year through September, making it one of the top-selling gasoline-electric models.

“It’s a model with proven sales track record,” said Wang Shan, an auto analyst with IHS Markit. “Even if it may not be a money-making business, it’s still better for the carmakers to sell this model than to buy credits.”

Toyota said it expects the new model to be counted as a plus credit for its venture with Guangzhou Auto, and that it is developing its own battery electric vehicle toward 2020. Honda and FCA declined to comment on future model production.

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