Nissan looks to no-frills China brand for revival

Encouraging news for Nissan Motor Co as the brand looks to China to drive its global turnaround.

(Photo: AP)

His Chinese sedan was a disappointment. So when truck driver Xie Yanzhen needed to replace it, he turned to Venucia, a 2-year-old no-frills brand launched by Nissan and a Chinese partner.

The Chinese-brand Chang’an “doesn’t work well,” said Xie, who was back at a Venucia dealership in this southern city with a friend. At about 80,000 yuan ($13,000), his Venucia D50 compact sedan cost a little more, but “the engine is pretty good.”

That is encouraging news for Nissan Motor Co., which wants Venucia and Chinese buyers like Xie to help drive its global turnaround.

Venucia is a leader in the latest twist in the world’s biggest auto market: Chinese brands created by global automakers with local partners to sell foreign cachet at lower prices.

The trend started with government pressure on global automakers to help create Chinese brands. But some are trying to turn that into a commercial advantage.

Most ambitious are Nissan and General Motors Co. Their local brands have rolled out ultra-low-cost models to make deeper inroads into China, especially in the countryside, home to 700 million people.

GM created Baojun in 2010 with two local partners. Mercedes Benz parent Daimler AG is launching a joint-venture electric car brand. Volkswagen AG and France’s PSA Peugeot Citroen have said they are looking at creating local brands. Honda Motor Co. and a local partner launched the first joint-venture brand, Linian, in 2007.

Venucia is especially important to Nissan. China is a centerpiece of the struggling Japanese automaker’s plan to emphasize faster-growing developing markets. It announced an $8 billion expansion plan for China in 2011 with a local partner, state-owned Dongfeng Group.

Nissan wants to build its share of China’s crowded auto market from 6 percent to 10 percent.