Acquisitions Of Several Western Luxury Brands Reflects Desire To Shift From Low-Cost Manufacturing To High-End Goods
2009 has been a pivotal year for many Chinese companies hoping to take advantage of the global economic crisis and snap up distressed western brands, both to capitalize on the existing market presence and distribution networks these brands already have in place and upgrade technology and gain global industry know-how. From carmaker Geely’s presumed takeover of Volvo to the acquisition of Hummer by the previously unknown Sichuan Tengzhong, the last few months have been particularly eventful.
Other examples of luxury acquisitions have shown that Chinese companies are keen to use distressed brands as a shortcut into foreign markets as well as a way to capitalize on the popularity of foreign brand names in the domestic Chinese market. As an article in the Chinese newspaper People’s Daily notes, “China’s home-grown enterprises are on the way to own[ing] world-famous luxury brands. If they cannot build up a brand within a short period, purchasing other brands is perhaps not a bad choice.”
The article goes on to list some of the more important — if not as high-profile as Hummer and Volvo — acquisitions made by Chinese companies in the last year:
Pierre Cardin: Pierre Cardin, one of the first foreign brands to enter the Chinese market (in 1978), was sold this summer to a private enterprise, although the company has been embroiled in lawsuits in recent weeks.
Dalla Pieta: This Italian yacht maker was purchased for $111 million US by a Zhejiang province-based company, the Wantong Group.
Todd & Duncan: Ningxia Zhongyin’s purchase of Scottish cashmere producer Todd & Duncan earlier this year was the first-ever takeover of a UK cashmere company by a Chinese company.
Saab: GM sold the tooling for the current Saab 9-5, some powertrain technology and tooling, and certain rights to the 9-3 model to Beijing Auto (BAIC) earlier this month.