Now that it's already set a dubious standard for high-fashion knockoffs, China is busy extending its sincerest form of flattery to cars.
Depending on where they live in the world, consumers can get a clone of a BMW X5 for about $38,000, to perfectly complement, say, a nicely counterfeited Rolex and a faux Armani suit. The entire ensemble of watch, suit and vehicle would cost under $40,000, compared to $52,000 for the real items, including about $46,000 for the Beemer.
In the Orient, sports car lovers can snag a Chinese "Ferrari" for about $10,000 to $30,000, not the normal $120,000 to $150,000, presuming they aren't too finicky about its provenance.
Chinese car knock-offs haven't really made inroads in the United States yet, although the U.S. industry has lost billions due to counterfeit car parts in North America and globally. But vehicle look-alikes are invading Europe.
Some clones are already for sale, and plans are underway to introduce more of them by spring. Two vehicles alleged to be shameless copies touched a raw nerve at the Frankfurt Motor Show in September.
The UFO from Jonway Automobiles seems to have the RAV4's unmistakably muscular lines. Powered by a Mitsubishi engine and packed with amenities, the UFO costs $22,600, instead of the RAV4's $37,000 price tag in Europe.
In a jarring improvisation, Shuanghuan Auto's CEO SUV mimics the front of a Mercedes SUV and the sides and rear of a BMW X5, according to some observers. At the low end of the market, the Bubble, also from Shuanghuan, and the Peri city car from Great Wall Motor have allegedly plagiarized Daimler's Smart Fortwo and Fiat's Panda.
Fiat charges that the Peri copied the Panda's overall look as well as the design of its doors and tailgate. But Great Wall said it did its own development work, spending hundreds of millions of dollars on the Peri. Meanwhile, the Bubble (formerly called the Noble) looks almost identical to the Smart Fortwo.
The complaints turned the Frankfurt Motor Show last September into a game of cat and mouse, with the Europeans trying to block the alleged copies from the event and the Chinese making excuses that sometimes seemed a good deal more creative than their clones.
One argument was that the Chinese were just taking "inspiration" from the allegedly copied vehicles. That wasn't persuasive enough to keep BMW, Daimler and Fiat from going to court to try to keep the cars at bay.
At its root, the penchant for cloning seems to be an offshoot of a lucrative business model based on counterfeiting. According to a report from consulting firm AT Kearney and statistics from the U.S. government, counterfeiting represents about 8 percent of China's $10 trillion economy.
Automotive cloning can involve anything from filching stylistic elements to duplicating vehicle engineering. At the top of their game, some Chinese firms can manufacture products almost indistinguishable from the original, as anyone fitting a Chevrolet Spark door onto a Chery QQ quickly learns.
In the case of the Landwind and the UFO, Chinese automakers Jiangling and Shuanghuan at least had the good manners to draw their "inspiration" from somewhat outdated vehicles, the phased-out Opel Frontera and a relatively old Toyota RAV4 respectively.
At times, the passion for cloning runs to the comical. For example, there are facsimiles of the BMW or Audi badges (but with only two rings on the Audi) on vehicles called the BYD and the Laibao SRV. Not afraid to mix and match, Shuanghuan put the Audi-style rings on a clone of the Honda CR-V.
The BYD badge has the same color scheme as the BMW original, but with the central hub divided into two blue or white sections, not four.
In his book, China, Inc, author Ted C. Fishman describes how Chinese automaker Geely appropriated the Toyota logo for one of its vehicles. When Toyota challenged it, one Chinese court allowed the company to keep using the trademark, arguing that it didn't legally recognize the design as Toyota's, Fishman wrote.
In a sign that the industry's ambitions may one day know no bounds, manufacturer Hongqi unveiled HQD, a near double of the $320,000 Rolls-Royce Phantom, as a concept car at the Shanghai Motor Show in 2005.
The copying has thrived in a China's frontier-style legal environment. "In intellectual property rights, you are unfortunately stuck with whatever protection a country has," said Marjory Basile, an attorney specializing in intellectual property at the Miller Canfield law firm in Detroit.
"If I were in the shoes of one of the automobile companies, and somebody wanted to make a knock-off of my car in China, I would leave it to the public there to decide what they wanted to buy," Basile said. "It would be cheaper in the long run."
The Chinese copying goes beyond just badges and metal skins. Firms are saving massive sums in development costs for each model they copy, according to some estimates, suggesting that next clone coming out of China might aptly be called the "Windfall."
According to Franklin, Mich.-based Intellectual Capital Group (ICG), the copycats sometimes obtain vehicle computer-aided design (CAD) data from joint venture partners or use three-dimensional scanning to reproduce its CAD dimensions.
Three years after its debut, the Chery QQ is still the poster child for no-holds-barred technological plagiarism. According to a GM release, it was an exact copy of the Chevrolet Spark and the Daewoo Matiz.
In 2004, GM said it turned to the courts after fruitless efforts to mediate its dispute with Chery. GM's Daewoo subsidiary sued the company for allegedly using stolen designs. An attorney for GM Daewoo then said the Spark designs represented an investment of "hundreds of millions of dollars and thousands of man-hours." After the dust settled, though, the QQ was still on sale in Asia.
The knock-offs may be more vulnerable to high-speed impacts than legal challenges, as a crash study of the Jiangling Landwind showed.
ADAC, the Germany's largest auto club, crash-tested the SUV in 2005 and then issued a withering assessment of its performance. It cited a "badly deformed passenger compartment," among other serious problems.
At some point, the question of workmanship becomes the crucial factor, Basile said. "Say you buy a fake Gucci purse on the streets of New York. It might fall apart sooner, but it's just a purse. If I am driving around in a car that might fall apart, that's an entirely different story."
There is also a risk to the U.S. economy, and it's not mostly a matter of logos and styling. As the Chinese industry matures, it will learn from the vehicle technologies it is copying and then develop its own high-quality competing products, according to the AT Kearney study. ICG argues that China will "harvest" Western intellectual property and use it to leapfrog to better products.
At the same time, some of the Chinese "identity theft" may subside. According to Michael Bernacchi, a professor of marketing at University of Detroit-Mercy, China's fascination with competitors' brands will decrease as its middle- and upper classes demand authentic products.
When he taught some visiting Chinese business students recently, he found that they wanted to see truly authentic Chinese brands. "The issue was, could they possibly develop an automotive brand name that would be respectable worldwide and within China?" Bernacchi said.
That's a recognition that "if consumers have the money, they will not put up with knock-offs."
To see comparisons of cars and their possible Chinese clones, visit the blog at http://gemssty.com.
