Tesla: What's In A Chinese Name?
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This week had US electric car maker Tesla (Nasdaq: TSLA) officially driving into China despite its failure to resolve a trademark dispute, meaning it has no official Chinese name as it enters the market.
All of the world’s top car makers now manufacture in China. But that’s a very expensive business, and other companies have been chasing more niche-oriented spaces in the market. Online car information provider Autohome (NYSE: ATHM) is one of those, and successfully sold investors on its growth story with a highly successful IPO in New York last week. (previous post)
Now we’re getting word that another niche player, high-profile US electric car maker Telsa, has formally started selling its popular vehicles in China, even though it’s still involved in a trademark dispute that has left it without a formal Chinese name. (English article) Tesla is hoping to make its own strong debut in China by capitalizing on its sleek designs and generous incentives from Beijing to promote green energy vehicles. Its formal launch had been highly anticipated, and the company has already been taking pre-orders for several months.
The trademark squatter that registered Tesla’s Chinese name reportedly wants $30 million for the rights, quite a large amount for a company of Tesla’s size. Accordingly, the company has decided to go ahead and start selling cars in China simply using its English name without a Chinese translation for now. (English article) The company formally opened a showroom in Beijing this week to start selling its popular Model S sedans and has a website as well, though neither has its Chinese name.
If I were advising the company, I would tell it to simply choose a new Chinese name or perhaps even skip a Chinese name altogether, and leave the squatter with a worthless trademark. After all, Tesla is still new to the China market and there isn’t much consumer awareness of its previous Chinese name, which is pronounced like te-se-la. That would teach those squatters a lesson!Bottom line: Tesla should choose a new Chinese name to avoid dealing with a trademark squatter.
Doug Young has lived and worked in China for 15 years, much of that as a journalist for Reuters writing about Chinese companies. He currently lives in Shanghai where he teaches financial journalism at Fudan University. He writes daily on his blog, Young´s China Business Blog, commenting on the latest developments at Chinese companies listed in the US, China and Hong Kong. He is also author of a new book about the media in China, The Party Line: How The Media Dictates Public Opinion in Modern China.
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