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Haval stalls as Chinese car sales evaporate in Australia

Third time unlucky: Haval had ambitions for the H8 SUV.
Joshua Dowling
CarsGuide

31 Jul 2015 • 3 min read

The Chinese brand that boldly claimed it was going to conquer the automotive world and become Australia's biggest seller of SUVs has stalled on the starting line.

Great Wall Motors' sister brand "Haval" was supposed to be up and running in Australia in June.

But as yet there are no cars on sale. The Haval Australia website says: "Our sales network is currently under construction."

However, Haval Australia chief marketing officer Tim Smith says four dealers have signed and a network of 10 dealers should be ready to open in the final three months of this year.

In April Haval CEO Wang Fengying told Australian journalists at the Shanghai motor show: "Haval is the No. 1 SUV brand in China, and we have the confidence that, over time, it can grow up to be the No. 1 SUV brand (in Australia)."

Big call. Seven Chinese auto brands on sale in Australia so far have failed to win local buyers in significant numbers.

We believe the volume will build and we can have a sales star in the market

In the peak year, 2012, more than 12,000 Chinese cars were sold locally. Sales have been in free-fall since — of 1.1 million new vehicles sold in Australia last year, just 4200 were from China and year-to-date the tally is just 1161.

The reputation of Chinese cars was damaged after Haval's sister brand, Great Wall Motors, recalled more than 21,000 vehicles in Australia in 2012 because some internal engine components contained asbestos, a banned substance which can cause lung cancer.

Earlier examples of Great Wall Motors vehicles also earned poor safety scores in Australia.

"We know the customer will have some doubt (about) our product, but after they experience our product, we believe the volume will build and we can have a sales star in the market," said Madam Wang.

Haval had planned to introduce three different SUV models in June, priced from about $20,000 for a city-sized soft-roader (about $5000 less than rivals) to about $45,000 for a heavy-duty seven-seat four-wheel-drive, about $15,000 less than a Toyota Prado.

Among the brand's numerous hurdles, dealers are yet to find out how much each car will cost.

Several dealers have told CarsGuide they are reluctant to take on the new brand after the Great Wall Motors experience.

Dealers say the last shipment of Great Wall vehicles arrived in October and no more have been imported despite requests for fresh stock. About 20 per cent of Great Wall dealers have handed back the franchises because they have no cars to sell.

Industry analysts question Haval's ambitious plans in Australia. "History suggests their expectations are far too high," economist Richard Johns has told CarsGuide.

"Australia is a very competitive market, most of the world's brands are here. The Chinese will have to be very patient if they want to be a significant player in this market. No car company from anywhere in the world can walk into the Australian market and think they are going to be an instant success."

One of the Havals due here, the H8, a Toyota Kluger-sized SUV, was controversially withdrawn from sale by Haval in China — twice — soon after its launch in late 2013.

The company says the necessary improvements have been made and the vehicle is now export quality.

However, a report in China this week said that the renewed Haval H8 had failed to win sales even on its third attempt.

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