Chery hits new low
BY MARTON PETTENDY | 28th Apr 2011
That sort of retail price - let alone one that includes all statutory and on-road costs – has not been seen in Australia since 1991, on Hyundai’s industry-changing Excel hatch, or more than two decades ago, on Suzuki’s 1990 Swift.
Factor in two decades of inflation and the Chery J1 could well be the most affordable new car ever sold in Australia.
The new J1 pricetag not only undercuts Proton’s $11,990 drive-away S16 sedan – previously Australia’s equal-cheapest new car alongside the J1 – by $1000, but is significantly lower than the rock-bottom stickers on city cars like Suzuki’s Indian-built Alto (from $11,790 plus on-road costs or $12,490 drive-away) and Holden’s Korean-made Barina Spark (from $12,490 plus ORCs or $13,990 drive-away).
At the same time, traditional Korean price leaders like Kia and Hyundai, whose $15,490-plus (or from $15,990 drive-away) i20 will become the brand’s lowest-priced model when the long-running Getz (from $12,990 drive-away) is retired this year, have both flagged their intention to move upmarket with all-new light-cars later this year - the redesigned Rio sedan and hatch and Accent sedan respectively.
Chery became Australia’s third Chinese passenger vehicle brand in March, when it released the pint-size J1 hatch and Australia’s cheapest SUV – the J11 - following the launch of two Great Wall utes in July 2009 and, so far only in West Australia, the Geely MK light-car in January.
Now Chery distributor Ateco Automotive says it is passing on its savings from the surging Aussie dollar by offering a $1000 cash-back offer on the J1, effectively reducing its smallest model’s drive-away price from an already bargain-basement $11,990 to just $10,990.
“The Australian dollar is running at levels not seen since 1983, the year Australia won the America’s Cup,” said Chery Automotive Australia general manager Dinesh Chinnappa. “We have decided to pass on the benefit of the strong Australian dollar to the Australian car buying public.”To take advantage of the nation’s best new-car deal, which sees the 1.3-litre five-door J1 priced about the same as a five-year-old Holden Commodore Executive, customers must fill out a form and pay the discounted price of $10,990 or pay the full retail price of $11,990 and receive $1000 in cash.
Spokesman Daniel Cotterill said Ateco chose the cash-back arrangement rather than reducing the list price of the manual-only J1, which was officially released on February 24, because it was not a permanent offer.
“Because of the fact the currency goes up the stairs and down the elevator as a rule, the sensible thing to do was a cash-back offer,” he said.
Officially, the J1 cash-back offer ends on May 31, but Ateco said it would continue as long as the Australian currency remains strong. On the day of the J1 price cut, the Aussie dollar reached a 29-year high of $US1.0947 and some analysts predict it will soon hit $US1.15.
“At this stage the offer stands until May 31 because the law requires an end-date, but as long as the exchange rate persists that offer will stay,” said Mr Cotterill.
“For importers it’s a case of make hay while the sun shines because you know that for every day like this there is going to be another that it’s not.”The J1 cash-back offer, promoted on commercial television networks from today, does not apply to the front-drive 2.0-litre J11 crossover, which continues to be available in manual and automatic form priced from $19,990 drive-away.
“We were able to buy it (the J11) at a certain currency and there wasn’t anything left in that, if you know what I mean,” said Mr Cotterill. “With J1 we had a little room to move, so we did.”
On the safety front, the J1 offers twin front airbags as standard (matching the S16 and Getz but falling four short of the Spark and Alto), plus ABS brakes with EBD and front seatbelt pre-tensioners. The base Getz does not come with ABS or electronic stability control (ESC), which come standard in the Spark and Alto.
Ateco says it remains on target to fit ESC, the potentially life-saving safety technology that this year became mandatory on all new cars registered in Victoria (preventing both the J1 and J11 from being sold there), to both models before November, when similar ESC legislation will apply nationally.
“When we were trying to get an exemption in Victoria we had an undertaking from Chery that they would produce an ESC vehicle in time for that deadline,” said Mr Cotterill.
“We understand they are hard at work on that and we would like to be on sale in Victoria as soon as we can be.”Mr Cotterill said the J1 in particular had undergone a number of running changes during its short lifespan in Australia, aimed at improving interior quality and performance via a shorter final drive ratio.
“On J1 we went back to the factory about gearing,” he said. “We asked them for a slightly more responsive gear set that better suits our environment.
“We also had a first batch of J1 cars that wasn’t quite where would have liked it to be in terms of fit and finish. We’ve had, shall we say, a couple of robust conversations about that and we’re now pleased that the cars are much, much better.
“It’s something Ateco has worked at with the co-operation of Chery.”Mr Cotterill would not comment on reports the J1, which like all Chery cars comes with a three-year/100,000km warranty with 24/7 roadside assist, will soon receive an average three-star crash rating from local independent safety body ANCAP.
But he confirmed Ateco was on target to achieve Chery’s initial annualised sales target of 5000 sales.
Ateco sold 53 J1s and 166 J11s via 45 dealers outside Victoria in March, Chery's first month on sale, but hopes to increase that to 100-130 J1s and 250-350 J11s per month when all 60 of its retail outlets are operational by the end of this year.
Before then in the third quarter of 2011 the J1 and J11 will be joined by the Toyota Corolla-sized J3 hatchback, powered by a 1.6-litre petrol engine that will initially only be available with a manual transmission. Automatic and sedan versions of the J3 will follow.
“Sales are in line with expectations but still building slowly as we put the finishing touches to the dealer network in the first few months,” said Mr Cotterill.
“That’s just about there now and so it’s a matter of steady progression, which is what we saw before with Great Wall.”Just as the J3 is expected to undercut the traditional circa-$20,000 price point of its mainstream small-car rivals, Ateco says other “more enticingly priced Chinese cars are guaranteed to follow the likes of the J1 and J11”, including from its first Chinese brand, Great Wall Motors.
“The massive recent expansion of the Chinese auto industry will have increasing benefits for Australian consumers in coming years via a greater variety of vehicles on sale with low prices and high levels of standard equipment that represent unbeatable value for money,” said Mr Chinnappa.
With an 18-month head-start, Great Wall has already sold 10,000 vehicles in Australia through 60-odd dealers nationwide and expects to shift another 10,000 this year.
Aiding the cause will be diesel versions of the V240 ute and X240 compact SUV in the third quarter, followed by the introduction of Great Wall’s first Australian passenger car in the final quarter of 2011 – the C10 city-car.
Unlike the J1, Alto and Spark, GWM’s five-door C10 hatch will be as big as traditional light-cars like the Toyota Yaris, Ford Fiesta and Mazda2 at 3.8 metres long. In China, it will be available with 1.3 and 1.5-litre engines matched with manual and CVT gearboxes.
Also joining the bottom end of Australia’s light-car fray from China by year’s end is a nation-wide replacement for Geely’s MK city-car - which also carries an $11,990 sticker price in WA - the five-door CE hatch.
Ateco says it has no current plans to import Chery’s forthcoming J2 large-light hatch and sedan, or larger new Chery sedans revealed at last week’s Shanghai motor show - where Chery celebrated its 500,000th export vehicle - including the B16, E5 or Cowin 5.
China’s seventh-largest auto-maker also used Shanghai to reveal its first self-developed CVT gearbox and redisplay its range of all-electric and plug-in hybrid concept cars.
However, it no longer appears likely Ateco will deliver the first Chinese electric vehicle - or third Chinese brand - it promised to launch in Australia this year.
