Rana Foroohar points to the devaluation of the Tesla brand in many parts of the world due to Elon Musk’s political antics (Opinion, March 3). Such antics may not have the same import in China — Tesla’s second-largest market after the US — where President Xi Jinping has been mounting his own version of defenestration of party and government officials for over a decade now, without any discernible shift in sentiment towards him on the part of Chinese citizens.
Rather, the increasingly rapid ascent of local companies into premium brand producers is undermining the positioning of western premium brands such as Tesla in China as the sole embodiment of high performance, prestige and luxury. That local groups are doing so at lower retail price points compared to their western counterparts further erodes the competitive advantage of the established brands.
The growing brand producers in China are spreading their wings to markets beyond China and even into the home markets of the long-established premium brand producers. Thus, the latter face the real risk of incurring the same “China shock” that lower value producers in western markets have long struggled against and which, in many cases, they failed to withstand.
Professor Louis Brennan
Trinity Business School
Trinity College Dublin, Ireland
