Borgward, the Bremen car brand revived by a state-owned Chinese bus maker after going bust in 1961, has surprised many including its own CEO by racking up more than 30,000 units in sales for its first model over eight months. The winning formula: touting its German heritage while saying as little as possible about its Chinese backers.
At the Shanghai Motor Show later this month, Bogward group AG will showcase the electric version of its BX7 SUV that’s slated to be available later this year alongside the BX5 compact SUV that went on sale last month. At a starting price of 149,800 yuan ($21,700), the BX5 will compete with similarly priced compact SUVs from Chinese carmakers SAIC Motor Corp., Changan Automobile Group Co. and Guangzhou Automobile Group Co. The smaller BX5 will complement the BX7 SUV that made its debut last year.
According to Bloomberg’s report Borgward traces its roots to 1924, when Carl F.W. Borgward, an engineer, designed and built a motorized carrier cycle called Blitzkarren. By the 1950s it was the third-largest car maker in Germany and accounted for 60 percent of the country’s auto exports. As part of its marketing, the company shipped vintage Isabella coupes to China while inviting Chinese customers on tours to its birthplace in Germany. No mention is made of the role of Beigi Forton Motor co. the state-owned truck maker that paid 5 million euros ($5.3 million) to buy the Borgward nameplate from the founder’s grandson in 2014.
“You do not smell the money behind the product,” Borgward Chief Executive Officer Ulrich Walker, 65, said in an interview in Beijing. Chinese consumers are getting more attuned to quality and safety in their automobiles, he said, and “want to show their success with a foreign brand, and if that’s a German brand representing German engineering, even better.”
There’s good reason why the new Borgward isn’t mentioning its Chinese parentage. Domestic brands are still perceived to trail overseas peers in quality, according to annual surveys compiled by industry researcher J.D. Power. More than half of the cars sold in China bear foreign nameplates and one in five are German marques.
At a recent media event in Beijing in March, the indoor arena filled up quickly with stinging exhaust as the company paraded 13 vintage Borgwards with a collective age approaching 1,000 years. Against dance performances and stage settings inspired by Oscar-winning movie La La Land, Walker recounted to the gathered press and guests the Borgward story, starting from the workshop in Bremen a century ago.
“The brand’s been dead for 50 years, what bloodline are you talking about?” said Tian Yongqiu, an independent auto industry analyst who monitors Chinese carmaker acquisitions. “Besides the nameplate, everything is Foton. It may be a German brand but Chinese manufacturing know-how. Quite a lot of consumers don’t know, and believe their story.”