Dubai show: China’s GAC eyes Australia

THE Chinese manufacturing partner of Toyota, Honda, Mitsubishi and Fiat Chrysler in the world’s biggest vehicle market is shaping as the next big Chinese company to try its hand with its own home-grown products in Australia.

GAC Motor – Guangzhou Automobile Group Motor Company – says it is already studying the Australian market with a view to launching here, perhaps within three years, with a self-developed line-up that currently includes 10 models sold in China under the Trumpchi and GoNow brands.

Meanwhile, another Chinese motor vehicle brand, Kenbo – developed by a joint-venture company controlled by the giant Beijing-based BAIC (Beijing Automobile Industry Holding Company) and using Saab technology – also admits Australia is on its radar.

GAC and Kenbo are among seven Chinese car-makers displaying their wares at the Dubai motor show this week, and virtually all of them have come armed with glossy brochures aimed at potential distributors in export markets.

The biggest Chinese car manufacturer, SAIC Motor, is in Dubai to launch its MG range in the Middle East, joining Maxus Vans (known as LDV in Australia) there.

Despite the trials and tribulations of Chinese companies such as Great Wall, Chery, Geely and JAC in the competitive and demanding Australian market, others such as Haval, MG, LDV and Foton are giving it a go, with more where they came from.

Like Australia, the Middle East is being targeted by these Chinese companies as a beachhead to big western markets.

A GAC staffer at the Dubai show told GoAuto that Australia was being studied as a potential export market “in two or three years”.

While GAC and BAIC are smaller than SAIC, which produced more than five million vehicles last year, mainly in partnership with General Motors and Volkswagen, they are major auto industry players.

State-owned GAC is China’s sixth biggest motor manufacturer, last year turning out 1.17 million vehicles, including the Chinese-market Toyota Camry and Yaris, and Honda City and Fit (Jazz) from its base in Guangzhou (formerly Canton) in south east China, near Hong Kong.

While co-operation with the big overseas brands has given GAC its head start in China’s crowded motor marketplace, it is already building its own-brand lines via its Trumpchi and GoNow badges.

It says it has a target of one million sales a year for these home brands as it strives to become China’s number one motor manufacturer. This year, it expects those sales to reach 180,000.

GAC’s progress has been somewhat blunted in the past few years by China’s conflict with Japan over territorial claims – a wrangle that impacted sales of Japanese-branded vehicles among patriotic Chinese buyers.

But it has learned plenty from the likes of Toyota and Honda on production systems, continuous-improvement quality control and cost savings.

Last year, it was ranked number one among Chinese manufacturers in J.D. Power’s initial quality survey.

In its own words, it says: “We pool global wisdom and world-class quality. We stand on the shoulders of giants for a more solid foundation for our ‘China dream’.”

GAC Motor general manager Wu Song said at the Dubai show that GAC’s products have China’s “most reliable quality and highest performance”.

GAC started its export push at the Dubai motor show last year. It is promoting is line-up under the GAC banner, rather than via its Chinese domestic brands.

Among three models on display this year in Dubai is the mid-sized GA6 sedan that GoAuto was told rides on a superseded Hyundai Sonata platform.

Curiously, Hyundai’s manufacturing partner in China is rival BAIC, which also has a major alliance with Mercedes-Benz.

BAIC already has a presence in Australia via its Foton Ute and Foton Truck operations, but according to representatives of the company on the show floor in Dubai, the Kenbo car line might be next.

Manufactured in south-west China by a joint venture company, BaicYinxiang Automobile Company, the Kenbo line-up in the Middle East comprises six lines of SUVs and people-movers.

Saab technology – acquired in a deal between BAIC and the now-defunct Saab Automobile in 2009 – is said to figure prominently in Kenbo vehicles.

Kenbo vehicles are made the huge industry city of Chongqing in south-west China, where yet another prospect for an Australian entry, Changan Automobile Group, is based.

Changan is the Chinese partner for Ford, Mazda and Suzuki. Its home brands are claimed to be the top sellers among the Chinese brands.