SHANGHAI -- General Motors said on Monday that its piracy lawsuit against fledgling Chinese carmaker Chery had been shifted to Beijing from Shanghai, but analysts were divided over the impact it might have on the case.
One analyst said GM might wield more clout in the nation's capital because of Beijing's stated intention of cracking down on intellectual piracy, but another industry observer said the change of venue could provide a more level playing field for the Chinese automaker.
Shanghai is GM's base in China. The Detroit giant's strategic partner is Shanghai Automotive Industry Corp., a major corporation in the country's commercial capital.
GM's South Korean unit, GM Daewoo Auto & Technology Co. Ltd., filed suit in December 2004 in Shanghai, accusing Chery Automobile Co. Ltd. of copying its Matiz mini car, which is sold in China as the Spark.
Chery, which harbors ambitions of exporting its low-cost vehicles as far afield as the United States, has repeatedly declined to comment on the charge.
"The move might be intended to demonstrate the government's intention of cracking down on intellectual property rights violations, an issue that has been raised repeatedly by trading partners," said Song Binsheng, an analyst with Huaxia Securities.
But Haitong Securities' auto analyst Gu Qing said: "Transferring the case to Beijing might be fairer for Chery because GM's Chinese partner is very influential in Shanghai."
GM spokesman Rob Leggat said GM Daewoo had received a notice from Beijing First Intermediate People's Court confirming that it had assumed responsibility over the case.
"We have no reason to believe the decision favors one party over the other, and we're pursuing the case as planned," he said in a statement.
Illegal copying is rampant in China, costing billions of dollars a year for owners of intellectual property. Multinationals from Microsoft Corp. to entertainment group Time Warner Inc. complain of a lack of enforcement.
A Beijing court official told Reuters the capital's courts had taken up the case in April, but she declined to estimate a date for a hearing, citing the complexity of court procedures.
Chery's alleged copy is called the QQ.
GM has estimated that the QQ is selling at a rate of 2,500 to 3,000 units a month, compared with the Spark's 700 to 1,000 a month. The QQ is about 15,000 yuan ($1,812) cheaper than the Spark.
Malcolm Bricklin, CEO of Visionary Vehicles, wants to help Chery begin selling in the United States by 2007. The man known for importing the cheap Yugo hatchback into the United States in the 1980s wants to sell 250,000 Chery cars in the first year.
Other Chinese carmakers also have been embroiled in intellectual property disputes with much stronger foreign rivals.
Volkswagen AG has said parts produced by the German company had been used illegally in one of Chery's cars. Chery countered that it had used technology bought legally from Volkswagen.
Top Japanese automaker Toyota Motor Corp. is demanding 14 million yuan ($1.7 million) in compensation from China's Geely Group for using a logo similar to Toyota's in its Meiri sedan line -- a charge Geely has denied.