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NEWS
Chery launch ‘premature'
Chinese brand's quality issues have blighted its arrival in Australia, but distributor believes the worst is overChinese brand Chery was launched in Australia prematurely, but the chief of local distributor Ateco Automotive Neville Crichton says he remains fully committed to the brand.
On-sale here since February 2011 following a protracted negotiation and homologation process, the Chery lineup has been blighted by poor ANCAP results, safety recalls and along with fellow Ateco-distributed Chinese brand Great Wall, had an asbestos-related recall.
“In hindsight we launched it too early,” admitted Mr Crichton. “We didn’t actually want to, but it was either do that or we didn’t have the brand.
“Chery was a problem but it has come right. There were quality issues and they have fixed the quality issues.
“We virtually turned the tap off entirely last year until they got the quality issues sorted.”
On top of those quality issues the lack of ESC (electronic stability control) fitment to any model in its three-car lineup – the J1 micro, J3 small car and J11 soft-roader – has kept Chery out of the Victorian market.
That issue will be addressed when both J3 and J11 get ESC and go on-sale in Victoria before the end of 2013, through no more than three metro dealers and two rural dealers. The J3 (pictured) also gains an optional automatic transmission this year.
The J1, currently Australia’s cheapest car at a $9990 drive-away price, will not get ESC and will therefore not be sold in Victoria. It is headed for the national scrapheap by November 2013 when all cars sold here must have ESC standard.
Ateco new ventures general manager Dinesh Chinnappa admitted the company was very much debating whether it would bother bringing in a replacement for the 1.3-litre J1, given the limited demand for mini-cars in Australia and the limited profitability they offer for distributors.
Instead, he admitted, a replacement for the J3 was being considered, and could be here as soon as late 2014, while a larger sedan was also on the radar.
However, Chery appears set to watch on as its Great Wall stablemate rolls out three passenger cars and a soft-roader before it launches other new vehicles.
GWM is targeting 20,000 sales per annum in 2014 and has already sold 30,000 vehicles here. Chery has managed to sell 3000.
“We always knew it would be [a challenge],” Mr Chinnappa said. “We are under no illusions. You’ve got to think what we are trying to do. We are trying to convince Australian consumers to part with large sums of money – 10, 15, $20,000 on big ticket items for new brands they have not heard of from a new country of origin.”
Mr Chinnappa also argued Chery’s slower roll-out of new products was actually a good sign.
“They have looked internally and come to the realisation they need to be more controlled in the way they develop their product and their product platforms,” he explained. “So what they have done is gone through that explosive growth cycle, they have had that explosion of product developments. Now there is a real over-riding commercial responsibility coming through the organisation. There is a lot more rigour and a lot more structure in the way they do things.
“The product plan is a lot more considered, a lot more strategic, a lot better thought out, it is a lot more planned. But there is a consequence for that and that is it slows things up a bit.”
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Written byBruce Newton
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