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Chinese car sales hit the wall

Great Wall V200

China's automotive invasion appears to have faltered after a strong start. Last year the number of Chinese made vehicles sold in Australia dropped dramatically.

In the case of Great Wall, the largest and perhaps best known of the brands, sales plummeted 43 per cent.

To put the figures in perspective the Australian new car market as a whole dropped just 2 per cent in 2014. Meanwhile Great Wall sold 2637 cars here, down from 6105 in 2013 and a high of 11,006 in 2012.

The number of Chery vehicles sold here also dropped markedly, from 903 to 592 vehicles last year — down from a high of 1822 when the brand was launched in 2011. Foton and LDV brands, which arrived here for the first time last year sold just 800 vehicles between them.

Since imports began the dollar has fallen from parity to just 82 cents in the dollar in the past few months...

Sydney-based Ateco Automotive, the importer of Chery, Great Wall, Foton and LDV, says the strength of the US dollar in relation to the Australian dollar has hurt all the brands.
Spokesman Daniel Cotterill says the company bought its vehicles from China in US dollars.

Since imports began the dollar has fallen from parity to just 82 cents in the dollar in the past few months, making the vehicles more expensive to buy in relative terms.

In stark contrast the fall of the Yen has allowed Japanese car makers to sharpen their pencils, adding extra equipment and reducing prices to narrow the value gap to Chinese products.

With the gap narrowing to only $1000 in some cases, buyers were opting to pay the extra freight for the better quality Japanese cars. Poor resale, recalls and average crash test results haven't helped the Chinese cause either.

Great Wall's X240 SUV is the best performer of the bunch in terms of safety, with a rating of four out of five from Australia's New Car Assessment Program (ANCAP). ANCAP recommends against buying anything with less than a four-star rating.

Mr Cotterill says the importer hasn't been able to respond to the Japanese price cuts. "The devaluation of the Japanese Yen has enabled some established brands to cut their prices, while the decrease in the Aus/US dollar exchange rate has eroded our ability to further lower prices to try and maintain a gap.

"Also, particularly with Great Wall, we haven't been able to refresh the model line-up and that is hurting us too," he said.

In Western Australia Geely cars are imported by the John Hughes Group. Last year the Geely MK achieved the distinction of becoming Australia's cheapest new car, with a drive-away price of just $8999.

But stock has been cleared and sales have now ceased, at least for the time being. Although he still owns the rights, Hughes has put the Geely brand on the back burner until it offers an automatic and at least a four-star crash safety rating.