Chery to conquer rivals

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 the successors to Chairman Mao Zedong's impoverished 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 the 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 to be built built in co-operation 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 home-made 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 four-cylinder 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 looks like a cross between an Alfa Romeo and Volkswagen Golf, have garnered favourable reviews, based on styling alone.

In an interview with the US-based Car Body Design group at last year's Shanghai show, Andrea Pininfarina said that when designing a vehicle for a Chinese client, the Italian styling house adopted the same approach it used for other carmakers.

He also believed it would take five years before Chinese cars gained a proper footing in Europe and North America.

Would you  consider purchasing a car that is 'made in China' valued at $21,000 simply because it's affordable despite its safety rating?

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