No price war with China cars: Mitsubishi
BY BYRON MATHIOUDAKIS | 7th May 2008
Speaking to GoAuto in Adelaide last week, Mr McEniry said he believed it would be the used-car market – not new-car sales – that will be affected initially, since the expected price of the Chinese-branded models will probably undercut Australia’s cheapest car, the South Korean-built $13,690 Holden TK Barina.
“We’ve seen cars of that ilk come into Australia in the past,” Mr McEniry said. “And they have come in with a successful run primarily as a used-car replacement vehicle initially.”As GoAuto reported last week, Chery will lead the Chinese vanguard in Australia via importer Ateco Automotive with three distinct models, kicking off with a 1.3-litre four-cylinder hatch model known as the A1.
Mr McEniry added that increasingly stringent vehicle safety, along with tougher emissions and fuel economy requirements, would create a more level playing field for all importers and manufacturers, including the Chinese, in the not-too-distant future.
He said meeting these and other proposed laws and regulations that come under Australian Design Rules (ADR) contribute significantly to the development and retail price of vehicles, no matter where they are sourced.
“No, I don’t think we will (drop prices to match the Chinese importers),” Mr McEniry said in response to question on pricing of its Colt or Lancer models.
“The requirements for ADR and what will clearly become obvious (to meet environmental regulations) in the coming years will change the price point on those (Chinese) cars anyway,” he said.
“So the expectation that they are going to be super cheap – I’m not confident that will be the point when you look at safety, environment, CO2 levels, etc.
“They may not be as cheap as first anticipated by the Chinese entrants.”Ateco Automotive managing director Ric Hull revealed to GoAuto last week that the A1 would not be a sub-$10,000 proposition.
“I’m not expecting to wildly undercut the market – I’m not expecting a $9990 car from China,” said Mr Hull, adding that, like all Chery models, the A1 would carry a “similar” price to its rivals but offer a superior level of standard specification.
Mr McEniry was unconcerned about the perceived Chinese challenge, arguing that Australian new-car consumers now see beyond low entry-level pricing, taking into consideration whole-of-life factors when buying a car, such as residual values.
He said this was particularly important with an unknown or new brand.
“I think the buyer is still looking for total value in a car, so they’ll take into account used car values and the whole thing,” he said.
“And that’s going to take a while to wash out with Chinese cars when they first come out anyway.
“It’s fine to buy a $12,000 car, but when you get $1.50 for it when you go to sell it then there’s not much value.”