MAO TO WO OW
First it was the Japanese, then the South Koreans. Now the Chinese are preparing an onslaught of budget cars with wide appeal, writes NEIL McDONALD
TO SOME it is becoming the China syndrome, to others the emerging economic strength of this communist powerhouse is an opportunity.
With China expanding at a phenomenal rate on the back of increasing capitalist-style ventures and greater market freedom, demand for its goods and services is growing in foreign markets.
First it was televisions, motorbikes, computers and mobile phones.
Now motorcycles have made way for cars.
Chinese carmakers are experiencing unprecedented demand in their home market as Chairman Mao’s original peasant workers become more affluent and consumer conscious.
But they are also thinking globally — and Australia is on their radar.
The announcement last week that Sydney-based Ateco Automotive will distribute Chinese-built Chery cars in 12 months will send shivers through some other marginal players in our market, particularly Proton, SsangYong and recently launched Mahindra, which are struggling to build a beachhead here.
Adding to their concerns, and those of other small players, is that Ateco has said the three-model Chery range will probably undercut the South Koreans on price and equipment.
Chery already sells its vehicles in more than 25 countries, including Russia and Iran, where it also has manufacturing plants.
The next big market it is targeting is lucrative North America, which it hopes to enter soon with a range of small cars built in cooperation with Chrysler.
Last year, Chery, one of China’s largest carmakers, sold 381,000 vehicles.
Its burgeoning export business would make local Holden and Toyota executives green with envy.
Exports have more than doubled, from 51,600 in 2006 to 119,800 last year, and such growth is expected to continue.
Australian importers and distributors are not the only ones worried by Chery.
Former Ford Australia chief Tom Gorman acknowledged that China was an awakening giant.
Before he left the company this year, he said China would have its hands full servicing its own market before venturing on to the world stage.
But that has not stopped Chery, and Shuanghuan, Geely, LandWind and Brilliance, from exhibiting at the Frankfurt motor show in previous years.
Chery has also targeted smaller markets such as Pakistan, Nigeria and Uruguay.
By Gorman’s reckoning, it will be five years or more before Chinese-built vehicles are on a par with those from the West.
As one senior automotive analyst pointed out, it took Japan 20 years to have its cars accepted in the West and South Korea about 10.
‘‘But China should be able to crack Western respectability in less than five years,’’ the analyst said.
To help achieve this rapid-fire respectability, Chery hauled in Italian styling house Pininfarina to design some of the stylish concept cars shown at recent motor shows.
Pininfarina did the Chery M14 convertible for the 2005 Shanghai show, the company’s first homemade coupe with distinctly European overtones.
The car had a retractable hardtop, sophisticated drivetrain and a project price of about $21,000.
Then, at last year’s Shanghai show, Chery showed how much it had learned about design by displaying the A6 coupe, which is scheduled for production this year.
The stylish front-wheel-drive two-door will have a choice of fourcylinder or 2.4-litre and 3.0-litre V6 engines mated to a six-speed manual or four-speed automatic.
The Chery A3 hatch and sedan, which look like a cross between an Alfa Romeo and Volkswagen Golf, have garnered favourable reviews, based on styling alone.
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Back in Australia, Ateco already has runs on the board with start-up marques. It pioneered Kia into this country and was behind Hyundai and Daewoo.
It also has executive Ric Hull on board, who is something of an expert at launching and building new brands.
Ateco’s hopes for Chery are modest in the short term.
It plans a three-model range — a light car, small hatch and a compact off-roader.
The A1 micro car will be launched in China this month and with a projected price of about $10,000, it could cause some big ripples if Ateco brings it here.
The Italian-designed model has a 1.3-litre four-cylinder engine that develops 61kW at 6000 revs and 114Nm at 3800 revs.
The 1.3-litre is mated to a fivespeed manual.
At 3700mm long, 1578mm wide and 1527mm high, the car is about the same size as the popular Toyota Yaris.
Ateco may also be able to snare the A3 sedan and hatch or A5.
Other Cherys are available too, including a seven-seat people mover called the V5 and large and medium sedans curiously called the Eastar and Cowin.
Chery has an annual production capacity of 400,000 vehicles, 400,000 engines and 300,000 transmissions at its Wuhu factory on the Yangtze River.
It is aiming for an annual output of one million vehicles by 2010.
There is no doubt Chery is causing ripples in the global automotive scene.
Soon it could be a tsunami.
A5 — $20,000
A1 — SUB-$12,000
A6 — $28,000