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Australia bound: The Chery A1 light car might yet be the first Chinese-made passenger on Australian roads this year.

Chinese importers ramp up model plans - including an electric vehicle by 2011

2 Feb 2010

THE on-again-off-again race to release the first Chinese-branded passenger car in Australia has resumed in earnest after confirmation that Chery, China’s biggest automotive exporter and largest independent brand, will be launched here in July.

Senior executives from Sydney-based Ateco Automotive, which launched Australia’s first Chinese vehicle brand last year in the form of two dual-cab utilities from Great Wall Motors, are now in China finalising pricing and specifications for two compact Chery models.

They are expected to comprise sedan and hatchback versions of the A1 light-car and a two-wheel-drive compact SUV codenamed T11 and known in China as the Tiggo3.

“We will launch Chery totally independent of Great Wall in July,” said Ateco governing director Neville Crichton at the opening of his $32 million Ferrari Maserati Sydney dealership on Tuesday.

Single uniform type inspection (SUTI) examples of both Chery models have been in Sydney since before Christmas for ADR testing purposes and should be formally approved for Australian roads by May or June.

62 center image Left: Chery Tiggo. Below: Great Wall Peri.

Also announced this week is news that Ateco will launch Great Wall’s first passenger car in Australia – a light-sized hatchback based on the Chinese market’s Peri – by June or July. It will join the X240 compact SUV launched here in November.

Perhaps even more significantly, Mr Crichton said an all-electric vehicle from China would be released in Australia in 2011.

“We will have electric cars here in 2011,” he said. “We’ve been working closely with governments over the past 18 months ... issues like infrastructure and charging stations.” Mr Crichton did not specify which Chinese brand would release an EV here first, but confirmed it will be a full electric vehicle rather than a hybrid – and that the vehicle would be profitable for Ateco.

“We’ll make money on EVs – I don’t think the EVs that come will be twice the price of petrol cars. I guess it (their success) comes down to fuel prices.

“I can see it coming quite quickly, at least in the cities. I think they’d be fantastic for Sydney or Melbourne. We’ve all got to look to the future.” Great Wall is understood to have tested a lithium-ion battery-powered electric version of the Peri in China, but GoAuto understands GWM’s first EV will be an all-new model that could appear alongside a new three-door city-car at the Beijing motor show in April.

The local arrival of Ateco’s first Chinese cars should co-incide with first imports of Geely’s 1.5-litre MK light-car via West Australia-based Chinese Automotive Distributors.

Originally due on sale in Australia in January but now expected to be launched here around May, the Geely MK is due to receive official Australian Design Rule certification within weeks.

As we’ve reported previously, it should be joined later this year by the 1.8-litre Emgrand EC7 small-car and, possibly, the 1.0-litre Panda (or LC-1) micro-car (which will also go by a different name here).

Chery first signed an agreement to import vehicles to Australia with Ateco in November 2005 before declining exchange rates forced the postponement of an early 2009 local launch.

Similarly, Chinese car-maker Lifan was due to be launched here by Sydney importer China Motor Franchise last year before the global financial crisis and a weaker Aussie dollar delayed its arrival.

However, CEO Shaun Lane says CMF remains committed to releasing Lifan’s small 520 sedan and hatch in Australia in 2010, while the smaller new 320 could follow it.

Mr Crichton said Chery’s Tiggo-based small crossover, which will receive a different name for Australia, will come with a driveaway price of less than $20,000.

The 2.0-litre petrol-powered SUV will therefore be positioned below Great Wall’s larger Toyota 4Runner-based X240 ($23,990), which falls 10mm short of being classified as a medium SUV.

GWM’s first passenger car was expected to be based on China’s Florid model, which was ruled out because of model cycle issues and the Victorian government’s earlier than expected 2011 mandating of electronic stability control.

Little information is available about the Peri, but specifications should be close to that of the five-door Florid hatch, which is powered by a 77kW/138Nm 1.5-litre engine, measures 3900mm long, weighs just 1117kg and is claimed to return average fuel consumption of 5.9L/100km.

“The Chery (A1) will compete with (Hyundai’s) Getz,” said Mr Crichton. “But it will have four doors and it will be better specced.” Expect the cheapest Chery to be priced around the same as the Getz (from $13,990), and fitted as standard with at least two airbags, ABS brakes with electronic brake-force distribution, a CD player and, perhaps, both manual and continuously variable transmissions.

“The next Great Wall vehicle will be an actual car, unlike the X240 which is an SUV but not a passenger vehicle as we’d call it,” said Ateco spokesman Daniel Cotterill.

Like the Lifan and Geely distributors, however, Ateco says neither the Chery A1 or Great Wall Peri – both of which are expected to follow the lead of the Great Wall utes by adopting alpha-numeric model names here – are likely to undercut the cheapest cars currently available in Australia.

“We will be ultra-competitive,” said Mr Crichton. “But we’re looking at value for money, rather than being the cheapest car.” Malaysia’s Proton will set a new price benchmark in Australia in April, when it releases a 1.3-litre ‘G’ version of its new light-sized S16 sedan priced at just $10,990 plus on-road costs.

Revealed soon after in January was a lower $11,790 (plus ORCs) pricetag for Suzuki’s Indian-built sub-light Alto hatch, following the federal government’s five per cent import duty reduction in 2010.

“I’d be surprised if we went down the path of competing solely on price,” said Mr Cotterill. “If there are others out there that want to do sub-$11,000 cars then I’m not sure where that leaves you in terms of a business case. We’ll be competitive in terms of value for money.

“As you see with Great Wall price is certainly a component and our pricing is extremely competitive – especially in the small car market – but it’s not the only thing,” he said.

Ateco managing director Ric Hull and special projects manager Dinesh Chinnappa are negotiating final pricing and specifications for Chery’s A1 and Tiggo, as well as firming up plans for other future Chery models.

They include a larger 2.0-litre passenger car that Mr Crichton confirmed for release in Australia in the first quarter of 2011, and another unnamed model.

“Chery will launch four models in its first eight months,” he said.

Revealed at the 2009 Shanghai show, where Chery revealed no fewer than 30 new vehicles, GWM’s Mercedes-Benz CLS-style CHCO 11 concept was a large sedan powered by a 3.0-litre petrol V6 coupled to a six-speed automatic transmission.

Great Wall also has a people-mover dubbed the Cowry which could sell here from under $30,000, while a Chery van could fill a market space vacated by the Kia Preggio.

“With Great Wall we had two utes and now the X240 has given some depth, but it (the brand) is not by any means complete yet,” Mr Cotterill said.

He also confirmed the ADR homologation process was now under way for the first Chery vehicles in Australia, following delays by the Chinese maker in providing the necessary documentation to the federal transport department.

He said Ateco was keen to avoid a repeat of the situation that forced it recall the Great Wall V240 ute to fix front seatbelt retracting mechanisms on 115 vehicles, after the V240 attracted a lowly two-star crash test rating from the Australasian New Car Assessment program (ANCAP).

Ateco will soon release a facelifted iteration of the V240 featuring a number of structural improvements to improve its crashworthiness, along with new single-cab and cab/chassis ute derivatives, while a diesel engine for the both the X240 and ute is expected to double sales.

“We’ve learned a lot from this and so have they (Great Wall),” said Mr Cotterill.

“There are a range of issues to get right so things get better as you go. I think what you’ll see with Chery when it comes to (ADR) is that the cars will tick all the boxes.

“We’ve had SUTI cars here for some time and I won’t say it’s a formality, but we’ll be very, very well prepared when we go into that process.” Mr Crichton said Chery vehicles would be sold through a separate dealer network to Great Wall, which launched with 45 dealers nationally, now has 51 and is expected to have 80 retail outlets by July, with more metropolitan Great Wall dealers to be announced soon.

“We’re starting again with Chery,” he said. “Nobody that’s got Great Wall will have Chery.” Great Wall sold a total of 1907 vehicles in Australia in the second half of 2009 following the launch of the SA220 and V240 utes in July. The X240 accounted for 264 of them, with 168 sold in December.

“There are lots of people talking about what they’re going to do, but we’re up to our elbows actually doing it,” said Mr Cotterill.

“The things are marching out the doors. The X240 is selling its doors off and we’ve really only actually started marketing it.” Mr Crichton said he expected the imminent influx of Chinese vehicle to Australia to have a greater impact on sales of Japanese models than Korean models.

“Hyundai has a big slice of the market,” he said. “We’re not trying to take it off them – we just want some of it “I have no doubt that in five years the Chinese will have a major, major share of the (Australian) market. They’re the biggest manufacturer in the world. It’s no different to what the Japanese and then the Koreans did.

“I don’t see the Koreans disappearing. In fact, the Chinese will affect Japanese imports more than the Koreans because of their price competitiveness. We see a very big future (for Chinese vehicles in Australia).” Mr Crichton said he was not interested in gaining the Australian distribution rights for Saab, which GM will soon sell to Spyker, but did not rule out adding other Chinese brands to his portfolio, which included Kia until the Korean maker assumed direct control.

“We’re looking all the time,” he said. “But there are no contracts yet.” Owned by five provincial governments, Chery is China’s largest vehicle exporter. Privately owned GWM, which produces 200,000 vehicles a year and exports to 100 countries, is actively pursuing new export markets.

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