China’s Chery, going hard for growth, seriously undercuts the competition
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THE strength of the Australian dollar is finally paying off in showrooms. So far it’s only one car and one brand, the J1 from Chery, but the Chinese company is confident a $10,990 driveaway sticker will force its rivals to move.
Its dollar-driven deal reduces the retail price of the J1 from $11,990 driveaway. The deal operates either as a straight discount or as a $1000 cash incentive to buyers.
At some stage, competitors are going to have to come and meet us on price,’’ said Daniel Cotterill, the spokesman for Chery Automotive Australia.
That’s a good deal for everybody, whether they buy a Chery or a Great Wall, or something else that’s a competitor. Competition is a happy thing.’’
The new deal is effectively an 8.5 per cent price cut, similar to the improvement in the exchange rate— Australian dollar against the greenback— since Chery began imports to Australia. It’s made easier because Chery originally targeted a $10,990 driveaway starting point but could not make the sums work.
That partly explains why the deal is only on the sticker for the J1 and not the $19,990 driveaway price of the J11 SUV.
We’re in a position, on that car, to make the bottom line better. We worked very hard at launch to get the J11 from $19,990 driveway, and the margins are extremely tight. We don’t have the same flexibility with that car (the J11),’’ Cotterill said.
We expect it to run for as long as the currency sustains its current level. At the moment we’re locked into May 31.
Historically, the Australian dollar goes up in small steps and goes down in an elevator.’’
Chery is working on the shortcomings in the J1 identified in the first Carsguide review, starting with poor gearbox ratios— for economy and performance alike— and the quality of the final finishing.
The J1 final drive ratio has been changed and we’ve been working very hard with our partners at Chery on the items pointed out by Carsguide,’’ Cotterill said. We’ve got guys on the ground checking cars in the factory, and then again before a car is cleared to go on the boat to Australia.’’
He said it was too early to predict sales although the J1 more than doubled its forecast in the first month of sales.
Savings: Chery leads the way with $1000 off its J1 model