Australia's first Chinese vehicles draw closer

ATECO Automotive has signed a letter of intent with a Chinese truck-maker to push ahead with a range of commercial vehicles for Australia. The company is also aiming to have Chinese-sourced passenger cars on Australian roads within two years.

"I’d be hopeful you’ll see us actively in the China car business, if you like, before the end of next year," Ateco Automotive managing director Ric Hull told GoAuto.

Although talks between Ateco and its (unnamed) intended partner were progressing well, Mr Hull said there was "nothing imminent".

"China is a left-hand drive country so they’ve got to come to terms with engineering right-hand drive products and so on," he said.

However, he was buoyed by the response to Ateco’s preferred supplier.

"We do have a letter of intent from our preferred China manufacturer. It is the one we wanted and we’re delighted with that," he said, adding that it would probably be late next year before Ateco-distributed Chinese vehicles were seen on Australian roads.

"It won’t be this year, it will be into next year and I guess we’ve always known that," he said.

Mr Hull said a confidentiality agreement prevented him from revealing which company was involved.

A likely candidate is Yuejin, the light truck unit of Nanjing Automobile that has an existing relationship with Ateco’s main source of vehicles, Fiat.

Overseas reports indicate that Nanjing is currently negotiating with Fiat to merge Yuejin with Fiat’s Iveco truck brand in a 50-50 shareholding arrangement.

Yuejin light trucks are also sold in the United Kingdom, which indicates that right-hand drive vehicles meeting similar design rules to those in Australia are currently in production.

Ateco’s initial strategy of offering a range of passenger vehicles, from a small 1.3-litre car up to a medium-large 4WD and then moving into light commercials, had changed.

Mr Hull said the truck manufacturer Ateco was talking to was forced to put back its right-hand drive program about six months because of emission issues.

"That brings in a double whammy," he said. "If they had have been able to get vehicles into the marketplace before the end of last year they could have persevered with Euro III for another couple of years.

"But by missing that I think that’s delayed them more than the six months they’re telling me." Mr Hull said the company was now pursuing Euro IV compliance and Ateco did not have a timetable for these emission-compliant vehicles.

"So, it may well be that we’ll do passenger cars first," he said.

Mr Hull said Ateco’s business dealings with China, like many foreign companies, was protracted but Ateco was aiming for a long-term partnership.

"I guess I’ve been up there four or five times over the past 12 months," he said. "We’re keeping in touch with a number of parties up there." Asked when he’d like to have Chinese cars in Australia, Mr Hull was emphatic: "Tomorrow," he said.

Since GoAuto published details of Ateco’s impending China deal, dealership interest has been strong.

"You’ve no idea the level of dealer interest," Mr Hull said. "It’s the inevitability of it. Everybody knows that China’s going to be a key vehicle supplier in a short period of time.

"Just about everything else we buy now is made in China. It’s good and cheaper than the commodity it replaced.

"That’s the expectation for cars and I don’t think people will be disappointed.

"Strategically, China is where we should be looking." Mr Hull said Ateco had also cast the vehicle net wider, looking at India as a possible source for vehicles to fill the void created by the loss of the Kia franchise this month.

The company also imports Ferrari, Maserati, Alfa Romeo, Fiat and Citroen but wants a bread-and-butter brand to flesh out its portfolio.

Mr Hull had previously said that a long-term arrangement with a Chinese partner could deliver up to 20,000 vehicles from the country by 2010.

Ateco is also undaunted by the fact that there are almost 20 car marques struggling to achieve more than one per cent of market share in Australia.

A prospective Chinese brand would aim to offer quality, low-cost vehicles and could even undercut some Korean models on price and equipment levels.

Mr Hull has a strong background in vehicle import start-up businesses, having established both the Hyundai and Daewoo brands here.

He is confident that with Ateco’s network of about 180 dealers the case for Chinese vehicles is strong.

Any arrangement to import the vehicles would also be independent of the cross-ownership joint-venture demands of foreign companies setting up in China.

Reborn Rovers for China

NANJING Automobile had its purchase of the collapsed British car-maker MG Rover approved by China’s state development and reform commission this week, paving the way for Nanjing Auto to begin building cars under the MG and Austin brands in China within 12 months.

Overseas media has reported that Nanjing Auto will have the potential to build 200,000 cars (based on the Rover 25, 45 and 75 models), 250,000 engines and 100,000 gearboxes annually based on the fact that the assets it has bought from MG Rover include R&D equipment.

It is still unclear whether any vehicles will be built in England.

Interestingly, Nanjing Auto will compete with an all-new Rover 75 built by rival Chinese car-maker Shanghai Automotive, which lost the bid for MG Rover but managed to purchase the rights and assets to build the 75 and 25 models and related components.