Chery is among the domestic carmakers that have hired internationally renowned designers from the West. Yan Daming / For China Daily

Independents squeezed by rising industry competition

The recent sale of the country's first and largest independent auto design and engineering company has left industry insiders wondering if the sun is setting on smaller firms in the field.

TJ Innova Engineering and Technology Co will sell about 88 percent of its stock to Sichuan Chengfei Integration Technology Corp for 545 million yuan ($87.6 million), according to a statement on the Chengfei website late last month.

Analysts said the sale to aircraft component and automotive molds maker Chengfei could be a signal TJ Innova is shifting its focus away from auto design.

Information on TJ Innova's homepage said the company was established in 1999 and now has 3,000 engineers.

Its experience in vehicle design and engineering stretches back to its forebear, an automotive research center at the Harbin Institute of Technology, which worked for FAW a decade before TJ Innova was founded.

The news surprised industry insiders who voiced concerns about the future of small independent auto design companies in China.

Their golden age began a decade ago when they had a steady stream of orders from domestic automakers in their early stages of development.

Today, design firms face intense pressure from competition, said Chen Qunyi, chief designer at IAT Automobile Technology Co, which was founded by returning overseas experts in 2001.

Competition in the overall automotive industry has become increasingly fierce as market growth slows.

Smaller unprofitable automakers have been gradually absorbed by larger companies, leaving a dwindling number of clients for small designers.

Major domestic automakers also now have their own design teams that are maturing as domestic car companies fight for market share both at home and abroad.

Many companies are also dissatisfied with domestic designs, with experts considering many current models either odd or mediocre. Many are copied from Western or Japanese designs.

Foreigners preferred

So more Chinese automakers are searching for their own distinctive designs by poaching Western professionals in the field.

Early last year, Qoros Auto Co Ltd - the joint venture between Chery Automobile Co and Israel's largest holding company - invited former Mini chief designer Gert Hildebrand to lead their team.

Chery then appointed former GM senior designer James Hope as corporate director for design. He will lead 90 professionals at the company's design center in Wuhu, Anhui province.

Another domestic automaker, Zhejiang Geely Holding Group, grabbed former Volvo design director Peter Horbury, making him senior vice-president for design.

Last April, BMW's Chinese partner Brilliance Auto hired famed Pininfarina designer Dimitri Vicedomini as their senior design director. Vicedomini has more than 15 years experience working at the Italian auto design house.

BAIC joined the fray the same month when it made Leonardo Fioravanti its chief designer.

In 2010, Great Wall Motor employed Andreas Deufel, former designer of Mercedes-Benz, to design vehicles that are more original.

Domestic design firms lack that level of experience and talent, say experts.

But they note even globalized Chinese automakers still need local characteristics in their auto designs, which might provide hope for independent design firms.

In fact famed Italian automotive designer Giorgetto Giugiaro once said that "China's automotive design lacks Chinese elements."

He said only when Chinese cultural characteristics are incorporated will the country can have its own distinctive auto brands.

xuxiao@chinadaily.com.cn