Exclusive: Chinese giant bound for Oz

CHINA’S biggest automaker, Shanghai Automotive Industry Corporation (SAIC), is finally ready to make its move in Australia, with an announcement due this week at the Australian Truck and Trailer Show in Melbourne.

An import deal with the Sydney-based WMC Group – a company specialising in Chinese commercial vehicles – signals a major escalation in the Chinese invasion of the Australian market.

While SAIC Motor’s first product here will be a little-known van line called Maxus, it almost certainly will be just the first step up the automotive food chain for the company that recently announced the sales debut of its MG line of passenger cars in New Zealand.

State-owned SAIC is the major Chinese partner of the two biggest foreign companies operating in China, General Motors and Volkswagen, with a combined 2011 output of 3.6 million units, making it the world’s eighth-largest motor manufacturer.

In parallel with its joint ventures with GM and VW, SAIC has been building up its own domestic brands, using the knowledge and experience of its western partners to pursue world-class standards.

Maxus, MG and its Chinese domestic luxury brand Roewe (Rover) are all one-time ailing British brands snapped up by SAIC, starting with MG Rover in 2005.

The Maxus brand is derived from the name of a van produced by Britain’s defunct LDV (Leyland DAF Vehicles) that SAIC Group acquired in 2010, shipping all the tooling to China.

GoAuto understands that SAIC executives are flying to Australia this week for the announcement at the show, where a Maxus van will go on display.

Another Chinese brand imported by WMC, JAC, will also be prominent at the show, which opens at the Royal Melbourne Showgrounds on Thursday.

WMC managing director Jason Pecotic is expected to use the event to spell out the details of the SAIC-Maxus import deal, along with the planned vehicle range.

An invitation to the event mentions an unnamed van to be shown at the show. This is most likely the Maxus V80, which is made in a wide variety of styles and is already exported to the UK, South Africa and Chile.

While details of the van and any other potential vehicles are being kept under wraps for now, Mr Pecotic confirmed to GoAuto that his company is now interviewing dealers to handle the new brand across Australia.

WMC already has networks in place to handle Higer buses, JAC trucks and Joylong vans, with some of the outlets controlled by Australia’s biggest dealer groups.

Maxus will become the ninth Chinese brand to announce distribution arrangements for Australia, with MG likely to make it 10.

The best-known brands so far are Ateco Automotive’s Great Wall Motors and Chery, but Higer Bus and Foton trucks have been making inroads in their niches.

Other brands include Chinese Motor Distributors’ Geely – which so far is only sold in Western Australia – and ZX Auto, a ute maker that is planning to offer a Great Wall-style range of basic light trucks.

The Maxus van will become the third van line handled by WMC, with Joylong and JAC also set to debut vans Down Under.

This could spell trouble for existing van champions Toyota and Hyundai as the Chinese models – equipped with western-developed Cummins diesel engines in the case of Joylong and JAC – will almost certainly be more affordable.

The brand that is now Maxus has gone through numerous changes of ownership over the years, and can be traced back more than 100 years to the original Leyland Steam van in 1898.

It later became part of the Morris Group and then – when that company joined with Austin – British Motor Company (BMC), and then British Leyland.

It is unclear when the vans will go on sale, but that will not happen until the dealer network is in place.

SAIC has been slow to develop its export markets, mainly because the Shanghai-based company has been flat-out coping with the explosive growth of the Chinese domestic market.

One of SAIC’s major rivals, Beijing Automotive Industry Holding Corporation (BAIC) – also state-owned – already has a presence in Australia via its Foton truck and light commercial subsidiary.

Foton Aumark trucks and the Foton Tunland utes are being distributed separately in Australia, through independent distributors.

Like SAIC, BAIC/Foton has major joint ventures with western companies, including Daimler and Hyundai.

Both of these companies – and other big operators such as FAW (First Automobile Works) – a partner of both VW and Toyota – and Changan, which is paired with Ford, Mazda and Suzuki, have been building their own brands to tackle both the Chinese and western markets.

The export passenger car flag-carrier for SAIC is the iconic one-time British brand MG, which has been reinvented as a sports sedan and hatch brand.

Once built on old Rover platforms, MG cars are increasingly built on newly developed architectures, such as the Cruze-sized MG6 that recently scored a four-star European crash safety rating ahead of its sales debut in Britain last year.

That vehicle has just been launched in New Zealand, where it will be followed by the upcoming MG3 small car.

When asked if MG vehicles would be sold in Australia, a SAIC spokesperson in China told GoAuto that the company was looking at a number of additional markets, including Australia.