A new report suggests China’s Brilliance Automotive’s run could be over in the European market. The news of Brilliance’s exit from the European market comes just months after the automaker’s European importer – HSO Motors – filed for bankruptcy. Brilliance has been handling its own European distribution since November.
Citing poor sales, a Brilliance executive revealed to AutoWeek that the company will halt all European sales. Brilliance was one of just a handful of Chinese automakers that managed to crack in to the European market.
Brilliance’s presence in the European market seemed doomed from the start, with the company’s first European offering – the BS6 – receiving zero out of five stars in Germany’s ADAC crash test. Brilliance’s pricing scheme didn’t do the company any favors, either.
“They didn’t want to lose any money per car,” former HSO boss Hans-Ulrich Sachs revealed. “We told them that this is the entry fee you have to pay to get established in Europe. They told us that we should make the investment to cover the shortfall; that we would have to subsidize the brand.”
Conflicting reports
Refuting AutoWeek’s report, one Brilliance insider told the Global Times that the Chinese automaker has no plans to exit the European market. “Brilliance will never pull out of Germany and Europe, even though it is confronted with bleak sales and thin profit margins,” the source said.
However, Brilliance’s lineup barely conforms to Europe’s current Euro IV regulations, with the Chinese automaker admittedly struggling to comply with Euro V regs. “They abandoned Europe IV in less than a year and a half, and will put Europe V in place in the second half. We can hardly meet the new standards with domestic auto part suppliers. We have to use overseas ones, which will raise our costs,” the source added.
Even if Brilliance does manage to limp along in the European market in the short-term, its long term future looks bleak. Those within BMW – Brilliance’s China partner – have revealed the automaker has stopped work on meeting the new Euro V standards, with sales well below expectations. Although reports vary, Brilliance has sold no more than 4,000 units since entering the European market in 2006, with some reports as low as 502 units.
References
1. ‘China automaker Brilliance…’ view
1. ‘Brilliance’s future uclear…’ view
Source: Leftlane