Shanghai Auto Show 2019 Interview: After 60 years, FAW scraps namesake brand, focuses on Bestune for cars

FAW is no more, hail Bestune!

FAW, which stands for First Automotive Works, is China’s oldest vehicle manufacturer, owned at 100% by the Chinese government. Created in 1953, the company started producing trucks in 1956 and passenger cars in 1958 with the Hongqi, which has since been given its own full-fledged brand. 60 years later, the passenger car arm of the FAW Group is struggling mightily with 2018 wholesales down 35.7% to just 122.949, to be compared with an annual volume of 430.904 at the start of the decade in 2010, or when the FAW Tianjin Xiali was the outright best-selling passenger car in China in 2006. Worse: the FAW brand imploded -87.3% last January and -77.1% last March. But the last few months have brought a handful of signals that the FAW Group could actually be on the rebound.

I interviewed Mr. Dong Wanfu, Deputy Car Sales for the FAW Group

Financially first, with an astronomical 1,000 billion-yuan credit line (€133 billion or US$148 billion) given to FAW by the Chinese government. The fact of the matter is that FAW being the property of the Chinese government, it has virtually bottomless pockets. In the joint-venture aisle secondly, with China’s top brand Volkswagen confirming its trust in FAW by launching a new low-cost brand (Jetta) whose models will be produced by the FAW-VW partnership. Finally, and most significantly perhaps in terms of sales future for the FAW Group, the graduation of the 2008 Besturn sub-brand into a new full-fledged brand now called Bestune in October 2018 has been met with surprising initial success in a very difficult environment for Chinese SUVs. With a single model, the T77, Bestune has achieved 25.530 wholesales in its first 5 months in market, whereas the entire, now separate FAW brand sold just 27.002 units in the same period through 11 nameplates. This 5 month-result places Bestune as the 7th most successful brand launch in China in the past decade below Jetour (50.067), WEY (44.618), Lynk & Co (33.783), SWM (32.011), Cowin (31.469) and Jeep (31.229). But if wholesales tend to be inflated at launch, the real measure of success is retail sales and here too Bestune shines with 17.162 deliveries in its first 5 months.

Bestune stand at the 2019 Shanghai Auto Show

Most intriguingly, there was no FAW stand at the Shanghai Auto Show last week (and no FAW Press Conference), only a Bestune stand showcasing multiple examples of the T77 crossover, one autonomous concept car and somewhat confusingly one Besturn X40 crossover with its FAW badge. It’s time to unpack the Bestune mystery thanks to an interview with Mr. Dong Wanfu, Deputy Car Sales for the FAW Group, conducted at the Shanghai Auto Show. But before we start, I am introduced to Mr. Zeng, responsible for FAW’s international Sales, and he confirms he not only knows BSCB but also regularly consults our site for the most extensive data coverage of the world market (his words). So far, so good.

There was no FAW Press Conference at the Shanghai Auto Show, only a Bestune one.

BSCB: I’ve noticed there is no FAW stand this year at the Auto Show, only a Bestune stand. Why?

Mr. Dong Wanfu (Bestune): In October last year we made the decision to launch Bestune as a new brand for our passenger cars. We also decided that the FAW brand and logo would now solely be used for our trucks which is also a big market for us. (BSCB note: FAW is indeed the 2nd largest medium/heavy truck producer in China behind Dongfeng).We separated Bestune from the FAW brand because the quality and design of the new and upcoming Bestune models, including the T77 you can see on the stand, is far superior to the previous models we launched under the FAW brand. A break needed to be made. As such, our 260+ FAW cars dealerships are in the process of being rebranded from FAW to Bestune. (BSCB note: We would witness this change during our annual explorations of regional China later that week, on which I will be reporting shortly).

BSCB: I see. However there is still an X40 crossover on the stand with a FAW badge?

Mr. Dong Wanfu: Yes, because this model is at the end of its life. The next generation of X40 will be a Bestune model and will be called T33. It will launch in market this coming September. We will also launch a third SUV, the T99, at the end of 2019 and a fourth one, the T55, in 2020.

Bestune T99 Concept. The final model should launch this September in China.

BSCB: So will the new Bestune brand be solely dedicated to SUVs, a bit like Haval or Leopaard?

Mr. Dong Wanfu: No, we are also planning to launch a sedan in late 2020, although we haven’t decided on a name for it just yet.

BSCB: We are focused on sales figures here at BSCB and I’m curious to hear your reading on the Bestune T77 sales so far?

Mr. Dong Wanfu: We are very happy with the initial sales of course as the T77 is selling very well so far. Our objective for the Full Year 2019 for Bestune models including the current X40 is 150.000 sales in China. (BSCB note: vs. 20.379 wholesales over the first 3 months of the year).

BSCB: Which Chinese brands do you see as your competitors?  

Mr. Dong Wanfu: That’s easy. Geely, Haval, Changan and Roewe. (BSCB note: these are rather upmarket Chinese brands compared to where FAW stood before the launch of Bestune, confirming the aspirations of the brand to go up in standing.)

Mr. Dong says the Bestune T77 is targeted at young customers in large Chinese cities.

BSCB: What is Bestune’s target market in China?

Mr. Dong Wanfu: With the T77 and T99 we are targeting young customers in large cities such as Beijing, Shanghai and Shenzhen. They are highly educated, they work hard and strive to achieve the best in life. They want a car that matches their ambition. The T33 and T55, smaller and more affordable, will be targeted at the same clientele but in smaller cities. (BSCB note: The first target market seems to me to be either a mismatch or a stretch as the Bestune brand should in priority appeal to customers in Tier 3 and 4 cities).

BSCB: Do you have exports plans for the Bestune brand? 

Mr. Dong Wanfu: We do. In actual fact, we already sell the T77 in the Middle East. We are also currently in talks with dealer groups in Italy, Russia and Mexico.

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There you have it! A pretty momentous shift uncovered in this interview: the scrapping after more than 60 years of the FAW brand and badge for passenger cars, replaced by an all-new brand, Bestune. This is such a giant leap (of faith) that it’s hard to find equivalents in recent Chinese automotive history. The closest that comes to mind is Great Wall almost cutting off its sedan lineup entirely in 2014 and renaming its SUV lineup into a new brand, Haval, with the success we now know. But Great Wall Motors is nowhere near as old as a manufacturer as FAW so this isn’t quite the same. In fact, it’s a bit as if Citroen decided to scrap the Citroen brand and replace it with DS for its passenger cars…

It’s now time to test the Betsune T77 in the flesh in our upcoming section China Test Drives 2019. Stay tuned!