Chery on top in Australia's fruit-bowl car market?

08:20, March 04, 2011      

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The Australian car market may not be big, but it's about to be shaken to its foundations by the arrival of something entirely unexpected.

A cheap car that runs like an expensive one. In a country where roads are long and cars are expensive, the Chinese made Chery is about to carve a big question mark in an auto landscape dominated by and divided between traditional local, Japanese and European brands.

Daniel Cotteril of Ateco Automotive told Xinhua that Australian car buyers were notoriously conservative, traditionally seeking big cars with big brands, but that the mindset was changing and the entrance of Chery would add to that change. "Australian car buyers expect to get a lot of a car for not much money. That's partly a product of our very competitive market. We sell a million cars domestically but divided by over almost 60 manufacturers. Because it is a large country with wide-open space, we traditionally like large, powerful cars," Cotteril said.

The Chinese-made Chery hits the Australian market this week and like its South Korean and Japanese predecessors, it is expected to move slowly in the short term, before taking its place as a household name in the Australian market next to Kia, Mazda and Toyota.

Cotteril said that sales would potentially snowball. "We conservatively expect to sell, within the next months, a rate of 100-150 J1's per month and between 200-300 J11s through 45 dealers initially. That number will expand over the coming year and we would expect to see sales rise over time."

The surprise hit of the Australian market last year was the Chinese-made Great Wall, with strong marketing and a growing reputation as providing bang for the strong Australian dollar.

An automotive expert with a string knowledge of the Asian car industry, Cotteril suggested it is the growing strength and reputation of Chinese engineering, which will determine the success of the Chery, in a traditionally inward-looking and conservative auto market.

"The diversity of the Chinese car industry is not yet well understood in this country. If you go to the Beijing Motor Show as I did last year and you see the massive variety of cars they're increasing stylishness, complexity of the technology, the engineering -- you're seeing an engineering powerhouse that the world doesn't quite understand yet."

Chery is one of a growing number of Chinese automakers, including SAIC Motor and Geely Automobile Holdings that hope eventually to be global players.

Chery shipped 91,986 vehicles overseas last year, equivalent to 13.5 percent of its overall sales, mostly to emerging markets in eastern Asia, Latin America and the Middle East.

The Chery J1 goes on sale Thursday for 11,990 Australian dollars (12,195 U.S. dollars), roughly the same amount paid for a new Toyota Corolla in 1986.

The J11 compact SUV, which at 19,990 Australian dollars (20,332 U.S. dollars) is the cheapest soft-roader on the market by a long hop. A price that not only includes all the plush add-ons like leather trim and air-conditioning, but with oil prices on the rise, might change the way Australians count their on-road dollars.

Source: Xinhua
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