Haval seeks dealer network boom, quadruple sales

HAVAL Motors Australia has targeted a dramatic sales increase by early 2018, with chief marketing officer Tim Smith forecasting up to 2700 annual sales for the Chinese SUV brand from what will become a 25-strong network by late 2017.

According to VFACTS June 2017 results, the four-model Haval line-up has accumulated just 339 year-to-date sales – which on current trends would equate to just one-quarter of the brand’s latest annual sales forecast.

Speaking with GoAuto a media event in Darwin, Northern Territory, this week, Mr Smith said that the addition of 10 dealers to the current 15-strong network would complement a major marketing push in the second half of the year.

“Our target is 25 dealers (by end of 2017) and we want to achieve that target,” he started.

“We want to achieve that target because it gives us greater opportunity to invest. Our marketing investments are important to this brand. We need to get the brand out there. (Our) story hasn’t been told yet but we want to tell that story.

“(But) we won’t chase volume by just throwing dealers onto the network. We’re doing it in a very staged approach. Our point is return of investment for the existing dealers, return on investment for new prospective dealers, having nice, strong, profitable, large PMAs (prime market areas) designed to give dealers a large chance to penetrate their whole PMA.”

Asked what the sales target would be for each dealer once the expansion has continued by the end of the year, Mr Smith said: “I’d like to see Haval dealers, Haval metro dealers selling really comfortable double digits, between 12 and 15 units per month.”“That’s where I’d love to see Haval finish (by end of 2017). Dealers are starting to do that now, (they) are starting to sell in the high-single, double-digits now. I’d love to see metro dealers finish the year selling 10, 15, 20 units a month.

“With that, it becomes a viable exercise.”

Haval shifted 80 units in June alone, including 41 units of the Haval H6 medium SUV, 28 sales of the Haval H2 small SUV, nine examples of the Haval H9 upper-large SUV and two models of the Haval H8 large five seater – leaving each current dealer having shifted just 5.3 vehicles per month on average.

However, in its next expansion steps Haval has planned to target the Melbourne metropolitan market, and growth corridors in Sydney and Brisbane.

Currently the Chinese SUV brand has five outlets in New South Wales – in south-west Sydney, Tamworth, Wagga Wagga, the Central Coast and outer Newcastle – and three in Queensland including north of Brisbane, Cairns and Bundaberg.

However in Victoria it is only represented by four outlets away from the Melbourne CBD, including Berwick and Seaford in the south-east, Hoppers Crossing in the west and Geelong. Western Australia and South Australia contribute just one dealer to the tally.

“In terms of areas, we have 25 key market areas that we want to get to,” Mr Smith explained.

“We’re just about to close Melbourne metro as our first closed market (while) Sydney and Brisbane is our next target. We would like to see Sydney and Brisbane closed out by this time next year.

“(But) metro is a loose term. (In New South Wales) metro starts at Bondi Beach and finishes at Katoomba. We’d like to be where our customers are. Being in some of the growth corridors in Sydney and Brisbane and in Melbourne is important, and that’s where we need to be.”

As the brand heads towards a target of 50 dealers by 2020, Mr Smith described “reasonable-sized PMAs” as “between 30 and 45-minute drive times as a bare minimum” for buyers to travel between each dealer.

In some areas Haval needs to be near other brands in dealerships, he argued, while in newer and developing areas the brand could stand alone.

“Without going into detail about what analysis we’ve done, our PMAs will be generous, much more generous than our competitors are,” he continued.

“Being next to or being within range of a group of brands that people know that they’re there is important to us. That’s one of the absolute prerequisites when we go an engage with a dealer.

“(But) we’ve (also) made decisions in the past to not be right next to a group of dealers because the area’s growing and it’s a new development and there’s future in the area. Growth corridors, new housing developments, we need to be there.”

Mr Smith stressed that Haval would not open dealerships without consulting with current outlets. However he also said that current proprietors were keen to see the network expand in order to give buyers more confidence in the brand.

“We won’t grow the network contrary to anything we do with our current dealers, so any dealer expansion will be in consultation with the existing dealers,” he said.

“What you're finding is existing dealers in both Sydney and Brisbane are actually saying, ‘Well it’s actually hurting me, we don’t have a lot of dealer points in the location’ because … one of the problems is that ‘I’ve got to get my car serviced’.

“So I want to try and provide some convenience for customers who, perhaps, live in north of Sydney or just south of Brisbane.”

Haval has openly expressed its disappointment with rival brands that it alleges are blocking its moves to recruit dealers (see separate story), but despite this it has committed to the 10-outlet expansion of the network by the start of 2018.