CHERY, China’s leading car exporter for the past seven years, and leading Australian car importer, Ateco, will concentrate on importing only one version of each of the three cars it offers to sell australia wide later this current year.
The approach is to import the highest specification of the three specification levels available in Chery vehicles sold in China to generate a strong value proposition while pitching prices against the lowest-price entries of competitors Down Under.
The businesses also want to maintain the model line-up simple for customer understanding of the value of the company and for simplicity in dealer operations.
The Australian line-up will start will three cars from Chery’s range of 28 different cars and commercials that are being churned out from factories soon to be effective at making 1 million vehicles a year – a 100 % increase on 2009 Chery production.
The general manager for first time ventures at Ateco Automotive, Dinesh Chinnappa, told journalists at Chery headquarters at Wuhu, near Shanghai, the task for Chery in Australia would not be picking the most suitable commercials and cars for Australia from Chery’s smorgasbord of 28 model lines ofvans and cars, people-movers, light trucks and pick-ups.
Chery2011 J1 center image From top: Chery A1 (J1), Chery A3 (J3), Chery Tiggo (J11).
Priorities in selecting these models will probably be customer safety and value and, from a dealer’s point of view, setting up a dollar and being viable.
Ateco’s business priority will be the volume potential of each model.
Mr Chinnappa said Ateco had already rejected certain vehicles in the Chery range because they were not viewed as suitable for Australia.
He said Chery “over a really short period of time will expand rapidly in Australia offering a full breadth of product including vans, pick-ups, SUVs and compact SUVs”.
“Product will not be a difficulty,” he stated. “Selecting the correct product would be the issue.”
Mr Chinnappa said he expected Chery to be bigger than Great Wall in Australia due to the breadth in the Chery range of products.
The first of the cars to be on sale australia wide in the third quarter would be the Chery J1 – a small five-door hatch with a 1.3-litre four-cylinder engine and five-speed manual gearbox. No automatic can be obtained, which will limit the sales appeal in the J1.
Chery does not build automatic J1s for its home market, although automatic transmissions represent about 52 percent of the light segment.
Among the standard options that come with this Getz-like Chinese challenger are ABS, two airbags, power windows front and back, alloy wheels, central locking, adjustable steering and USB port.
The J11 SUV spec, which has been locked in during the past day or two by Ateco people seeing the Wuhu head office, may have a 2.-litre engine with both a five-speed manual and four-speed automatic transmission.
It is front-wheel drive as well as two-wheel drive only. It will have twinairbags and ABS, electronic brake distribution, air conditioning, remote locking and alloy wheels. Electronic stability control to the J11 is under development.
Mr Chinnappa said that initially the partners thought the J11 would target the Kia Sportage and the Hyundai Tucson in the compact SUV segment but the two models “have moved away” from where the J11 will likely be positioned.
“Tuscon has moved upstream and gone on the Sportage and ix35 will soon follow. So, there is no mass market product which I am familiar with that occupies that space,” he was quoted saying.
“It is a big segment and, of the two vehicles J11 and J1, we really view a decent volume opportunity with J11 due to healthy measurements of the segment. So, of the two, it will enjoy the strongest volume proposition.?, the J11 will be the biggest volume opportunity of the two because?
The J3, a Corolla-like Chinese car, is a recent iteration for Chery and was designed with all the European market in mind, meaning getting it past the Australian Design Rule (ADR) homologations process will probably be much faster plus a simpler process for Ateco.
Mr Chinnappa said: “Chery has done almost all their development work and all their testing around the J3 to ECE standards so 85 per cent of the work is performed to migrate from ECE to ADR.”
A manual J3 will likely be launched into the small-car segment three to four months after the J11 and J1.
Continuously variable automatic transmission developed in-house by Chery will appear about 2-3 months in to the program, while the J3 initially will have a five-speed manual. The engine will be Chery’s 1.6 litre petrol unit.
Chery started life as an engine manufacturer instead of a car-maker, and engines are made to Chery designs and made in Wuhu.
The J3 will come with four airbags as standard – two front and two side bags in the seats (not curtain). Electronic stability control will be standard from the first day.
It will be fully specced with power windows, power mirrors, remote ABS, alloy and locking wheels. Final spec will be decided closer to launch.
Mr Chinnappa reiterated that, as far as possible, would be no cross-over with Great Wall dealers having the Chery franchise as well.
“There will be 40-50 dealers from launch using a metropolitan bias because the Chery models are passenger vehicles.” Great Wall carries a rural bias because of the pinpoint the pick-up.
“The going-in position is that if you are a Great Wall dealer you cannot have Chery about the same site. In certain small rural markets that can be impossible because there will simply not enough dealers to represent the franchises,” he was quoted saying.
“We are doing that for all the obvious reasons: maximize penetration, minimalise cannibalisation that will create the greatest degree of separation within the brand,” Mr Chinnappa said.
Most of the selection process for Chery dealers was done at the time Ateco was selecting dealers for Great Wall.
Equally, Ateco is running two separate distribution and marketing management teams and organisations for Chery and Great Wall.
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