Chinese to drive big increase in dealerships

THE arrival of Chinese cars on the Australian market could mean an increase of more than 300 to 400 new-car dealerships to handle the sales and service requirements of the brands.

The launch of the Chery brand in Australia by Ateco Automotive will add around 60 new showrooms by the end of this year. This is in addition to the 60 dealerships that have been added for the recent addition of the Great Wall brand to the Australian market.

With goals for both Chery and Great Wall of between 120 and 150 dealerships each, there is a need for a total of between 240 and 300 dealerships to handle Ateco’s Chinese brands.

Add in the Geely brand which is being set up by John Hughes, a major Perth dealer and pioneer of Hyundai in Australia, and the number of dealerships required could increase to more than 400.

Other Chinese brands are also certain to follow as well.

Ateco managing director Ric Hull told GoAuto the Chery network would be developed along the same lines as Great Wall, which is also imported by Ateco.

At launch, Ateco expects Chery dealer numbers to be a little shy of the 60 dealers in the Great Wall camp, rising to about 120 dealers in the first five years.

Mr Hull said Ateco had a five-year market plan for facilities and systems built around 50,000 units after five years.

“No one says we are going to get to 50,000 but you do your planning on that basis,” he said.

“We are looking at about 150 territories but we would probably not fill them all. The most likely figure will be around 120 which will give us a nice balance between geographical coverage and keeping throughput per dealer at a reasonable level.”There are similar plans for Great Wall.

Ateco was also adamant that it was not keen for dealers to have both Chery and Great Wall.

“We are absolutely discouraging that. It is our strong preference to have totally independent networks,” he told GoAuto.