Chinese off the menu – for now

LIFAN has joined fellow Chinese automotive brands Chery and Great Wall Motors (GWM) in delaying its Australian market introduction as planned this year – unless the value of the Australian dollar and the current wholesale finance situation improve.

Ateco Automotive was reported in the past two weeks to have indefinitely postponed then reinstated plans to launch Chery and GWM here.

However, Ateco managing director Ric Hull told GoAuto that both brands remain on target for a 2009 launch – but only if the Australian currency improves and/or the prices of rival models increase enough to make the new Chinese models competitive.

China Motor Franchise (Australia) chief Shaun Lane was less positive, saying his company would not import the Lifan 520 small car while the currency and financing problems existed.

“I am afraid we are not pushing ahead with Lifan at this juncture,” said Mr Lane. “The exchange rate has played havoc with our pricing and there is too much uncertainty in the vehicle industry at present.

“We are adopting a wait-and-see approach and will make a decision as and when conditions improve. I feel this may take some time and is quite frustrating given all the hard work put into the homologation of the vehicle.

“The exit of two major wholesale financiers has wreaked havoc in the market – especially for new players – so our big concern is the willingness of financiers to extend funds to the market place.

“To launch a Chinese brand in this market you’ve got to have a competitive product and you’ve got to be 20 per cent cheaper than the rest – otherwise why would people bother buying your motor car?”

From top: Chery A5, Tiggo 3 Faira, and GWM Sailor.

As previously reported, Lifan was to have become the first Chinese brand to go on sale in Australia early this year, when the light-sized 520 sedan was due for release.

Like GM Holden’s Cadillac brand relaunch via the CTS sedan, Lifan’s introduction here has been “indefinitely postponed”, but Ateco remains confident the Australian dollar’s value will improve enough for the Great Wall Sailor utility (likely to be known here as the GWM SA230) to be released in the second quarter of 2009, and for Chery’s A1 light hatch, A5 small sedan and Tiggo compact SUV to be released in the third quarter.

Mr Hull said that because the US dollar was closely tied with the Chinese yuan (the currency with which Ateco will buy its vehicles), the Australian dollar would need to be consistently worth at least 70 US cents before either Chinese franchise was viable here – but that he believed that would occur within months.

“It’s all about currency – nothing more, nothing less at the moment. We’re looking at levels back in the 70s (cents) against the US dollar to keep life simple – about 4.8 yuan to the Aussie dollar.

“Today, that’s what I’d need, but we all know that in a few months the market’s going to adjust to the exchange rates that prevail at that time, so pricing will come up or the dollar will come back, one of the two.

“The Aussie dollar’s off against almost everything – the US dollar, the Thai baht – significantly because Thailand is now the second biggest supplier of cars to Australia – the yen is I think 40 per cent up, so it’s a huge change.

“The yuan is about 63 cents against the US dollar, but three weeks ago it was at 73 and if it was at that level today we’d be off,” he said.

Mr Hull said Great Wall had come to the party on a lower price for the SA230 dual-cab, but this had yet to be made official.

“There’s one other factor – we went to Great Wall and asked for some further price assistance, which they’ve told us they can do but they need to confirm that with me.

“So if I have that and I can see the dollar back in the 70s against the US dollar then we’re away immediately. The dollar isn’t that far away.” As previously reported, the SA230 will be a two-wheel-drive dual-cab utility priced “well under $20,000” and powered by a 78kW/190Nm 2.3-litre four-cylinder petrol engine mated exclusively to a five-speed manual transmission.

The same Bosch-developed 2.8-litre turbo-diesel engine that powers Great Wall’s more upmarket Wingle dual-cab ute should also eventually power the SA230.

Mr Hull said a compact SUV based on Great Wall’s Hover would be launched soon after the Sailor.

“As you know, we’re planning to launch with pick-ups primarily with Great Wall, with a small SUV following fairly quickly,” he said.

According to ADR documents obtained by GoAuto, the SA230 ute – originally due to have been launched in November 2008 before being delayed due to production issues – will not be available with either airbags or an anti-lock braking system (ABS).

The four-door five-seater dual-cab received ADR compliance in April last year. It is 5160mm long, 1690mm wide and 1680mm high. It features a 3025mm wheelbase, ground clearance of 195mm, front disc/rear drum brakes and 6.5x15-inch steel wheels with 215/75-section tyres.

Air-conditioning, front foglights and central locking will also be standard.

GoAuto understands Ateco has about 60 dealers ready to sign franchise agreements. While Great Wall said last year it planned to launch no fewer than 12 models over the next two years, Chery said it would launch some 38 in the same period.

However, Mr Hull said ADR compliance remained an issue for Chery, which was to have launched its first Australian vehicles as early as next month, following a local public debut at the Melbourne motor show later this month.

“Chery is still dragging the chain a little bit in terms of getting the documentation completed and complianced,” he said.

“They are now making good progress with their documentation, but we haven’t seen any completed documents submitted to DOTARS yet. No ADR yet.

“Yes, we are totally dependent on currency and/or the market adjusting to whatever the exchange rates are at the time. (But) we’re still hoping for second-quarter launch for Great Wall and, maybe, a third-quarter launch for Chery.” Mr Hull said that, contrary to reports elsewhere, Chery’s Australian model mix would not be altered to include more highly-specified, more expensive or more profitable models. And he poured cold water on any hopes the US-oriented A6 Coupe, which was recently spied during testing, would become an image-leader for the local Chery line-up.

“No, we’re not looking at that. We’re still targeting the light-car end with Chery and that’s looking like being in the third quarter at the moment.

“But I wouldn’t hold out any high hopes for any significant (sales) volume from it (the A6 Coupe). We learned with the Korean brands that we’ve had an involvement with, that no matter how good the product is when you get up into the range a bit they just don’t get the market acceptance that they possibly deserve.” In other Ateco model news, Mr Hull said Citroen’s facelifted C4 hatchback – featuring new grilles, instruments and joint-venture BMW petrol engines – was on target for a launch “soon”, despite the recent discontinuation of the C2 hatch.

However, he said the Australian future of Alfa Romeo’s new MiTo small hatch could not be confirmed before pricing issues were resolved.

As we’ve previously reported, the MiTo would need to be priced in the low $30,000s to prevent sales substitution with the Alfa’s current entry-level model, the 147 (priced from $36,990).

“We’re still finalising pricing issues with MiTo, but I’m certain it will go on sale here,” he said.

Mr Hull said Fiat’s range-topping Punto variant and other Abarth-badged Fiat models would not be sold in Australia if the factory continues to insist on a dedicated retail sales network.

“We’re still talking with the Fiat Group (about Abarth), as to whether they could be made available in a limited range of models,” he said.

“There is no decision whatsoever. We’ll be looking at what’s available in the (Abarth) range but that’s some distance away. We’re only in discussion now with the factory.

“They had requirements that we would need a dedicated Abarth sales network and if that is still a requirement then I don’t think it’s feasible at all,” said Mr Hull.

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