Guangqi-Honda executives and local leaders with the first Everus S1 to roll off the production line. [Photo / Provided to China Daily]

First brand by joint venture designed and made specifically for China market

GUANGZHOU - The first entirely new brand of car designed and mass produced for Chinese customers by a Sino-foreign joint venture rolled off the production line at Guangqi Honda Automobile Co on March 26.

The first Everus model, a subcompact called the S1, will go on sale in April targeting entry-level consumers, mostly in medium and small-sized cities, according to Guangqi Honda.

The joint venture between Guangzhou Automobile Group Co and Honda Motor Co - or Guangqi Honda - came up with the idea for a new local brand in 2007 and then established an R&D company to design it.

The S1 is built on Honda's economy car platform and equipped with engines and transmissions from the Japanese company. It is assembled on the same production line that makes Honda-brand cars at the joint venture.

Honda's advanced technology and quality could help the S1 stand out among its domestic competitors in the segment, analysts said.

The company did not disclose the precise price of the S1, saying only that it will be "competitive" since it has a high content of locally made components that help cut costs.

Beside the product itself, Guangqi Honda more values the R&D system established and enhanced throughout the process of developing the Everus S1, said Yao Yiming, executive vice-president of Guangqi Honda.

He noted that the birth of S1 is a milestone that marks Guangqi Honda's transformation from just a manufacturing company to a complete automotive enterprise including R&D, manufacturing and sales.

Yao said the company has learned greatly in the development of the S1, knowledge that will be used on future Everus models

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The S1 is complementary to the joint venture's current lineup that includes the Honda Accord, City, Fit, Odyssey and Crosstour, Yao said.

Due to strong economic growth in China's inland areas, the S1 has huge market prospects, he added.

The model will be sold at Guangqi Honda's existing 470 dealerships, which also sell Honda-brand models, said Yu Jun, vice-president of Guangqi Honda.

Yu added that the joint venture aims to produce and sell about 442,000 cars this year with the sales goal for Everus about 30,000 to 50,000 units.

Other foreign carmakers are also making similar moves by launching new brands with their Chinese partners.

Nissan Motor Co, in cooperation with China's Dongfeng Motor Corp, unveiled a new brand, the Venucia, in September last year. It plans to have production models on the market in the first half of 2012.

GM's joint venture SAIC-GM-Wuling will start to sell its Baojun-brand cars this year, reportedly at the Shanghai Auto Show next month.

Volkswagen AG is also eyeing the option of developing a new brand at its local joint venture to further tap the potential of the world's largest auto market.

Similar plans also are on the agenda at Ford and Kia's joint ventures, according to media reports.

The trend echoes the government's call for more domestic brand cars and a stronger Chinese auto industry, analysts said.