Geely News

The three companies with Australia in their sights - Great Wall, Chery and Geely - are all expected to unveil new value-driven compacts and SUVs at the country's biggest annual motoring event.  Great Wall is the only brand with vehicles already in local showrooms, a dual-cab ute and SUV, but Chery and Geely will both hit the road down under before the end of 2010.BYD, a technology leader for China, is also planning to reveal its first plug-in electric cars in Beijing although it currently has no plans to sell overseas.  All 47 of China's manufacturers are expected to have something new at the show, with a move away from the copycat designs of the past - everything from the Rolls-Royce Phantom to the BMW X5 was either parodied or duplicated - to unique Chinese designs."They will all show their new export cars," says Ric Hull, the Ateco Automotive executive responsible for the Great Wall and Chery brands.  Hull says the Chinese car industry is advancing so rapidly it is hard to keep tabs on the new-model action."I think everything has to be seen in the context of the market. The Chinese made and sold about 13.6 million vehicles last year, and the US was 10.4 million," he says.  "They have not only eclipsed the US, they have gone way beyond them. In good years the US is 17 million, but the Chinese are there already."In the first quarter of this year, they have sold 4.6 million vehicles. So you're now talking 18 or 20 million a year. It's just gone bezerk.  "The thing that fascinates me most is how anyone can lift production to those levels. I don't believe the Japanese could do it, or even the Koreans."Hull says Ateco is already on track with additions to the Great Wall range including a single-cab ute, with Chery to hit first with a compact SUV.  "We'll launch Chery in August. It has just been an agonizing process to get the compliance issues in place, but it will be fine."I'm hoping to launch a RAV4-kind of vehicle at a really good price.  "Great Wall are talking about a 1.5-litre car that we'll introduce before the end of the year. They are getting there and getting there awfully, awfully quickly."Hull says he is expecting rapid improvement in Chinese vehicles, with quality and safety as top priorities.  Great Wall is just about to face its second ANCAP crash-test barrier in Australia and, following the miserable two-star result for the ute, Hull is hoping for a four-star rating for the brand's SUV."We took a hammering from NCAP on the utes but Great Wall reacted and they have made a lot of changes," Hull says.  Car sales in China are so important that all the world's major makers will be displaying in Beijing.Even though many skipped last year's Tokyo Motor Show, previously the world's equal number one with Frankfurt every two years, no-one can afford to miss the biggest motoring event in China.  There were more than a dozen world previews at the last Beijing show and a lot of the action is at the upmarket end of the business in 2010.Ferrari is unveiling its new go-faster flagship, the 599 GTO, and Mercedes-Benz will reveal an update of the $1.5 million Maybach ultra- luxury limousine.

Chinese carmaker Geely today has sealed a $1.98 billion deal to buy Volvo Cars from Ford.  However Ford spokesperson Sinead McAlary says the Blue Oval will still be getting engines, safety technology and other assets from Volvo for a while.“Volvo will continue to supply us with engines, stampings and other components for a period of time,” McAlary says, although she declined to predict how long that ‘period of time’ would be.  After today’s signing, Zhejiang Geely Holding chairman Li Shufu said he saw huge untapped potential for Volvo in international markets and especially in China, which has not only the biggest but also one of the fastest-growing car markets in the world."I see Volvo as a tiger. (The) tiger belongs to a forest, it can't be found in a zoo ... We need to liberate this tiger,'' he told a press conference after the deal was inked at Volvo Cars headquarters in Gothenburg, southern Sweden."The tiger has a heart and it lies in Sweden, (and) in Belgium but it's power should be projected all over the world.  I see China as one of the markets where Volvo can show it has the opportunity to liberate itself,'' he said.In the face of concerns that the Chinese group would slash jobs in Sweden, Geely said it would keep Volvo Cars plants in Sweden and Belgium and was considering opening factories in China for the local market.Geely said it had not only secured financing for the $US1.8 billion it was paying Ford Motor Company for Volvo, but was also eager to keep the loss-making Swedish carmaker in operation.  It also said the deal, which Ford initially agreed to in December, included agreements on intellectual property rights as well as supply and research and development arrangements between Volvo Cars, Geely and Ford.The deal will bring to an end Ford's decade-long association with the premium Swedish brand, known for its sturdy, family-friendly cars.  For Geely, which started as a refrigerator parts maker, the deal marks a new chapter in its international expansion after two of its Chinese rivals failed to take over Western brands, Hummer of the US and Saab of Sweden.The deal had initially caused consternation among unions at Volvo Cars, which employs about 22,000 people worldwide, including 16,000 in Sweden.   Unions had voiced opposition to the deal on grounds that it was vague on expansion plans and possible layoffs.Three Volvo unions this week pressed for details "on the capital that will finance Volvo's daily activities, investment on future projects and the production target of 600,000 vehicles by 2015''.  On Saturday they pronounced themselves satisfied.In addition to preserving Volvo Cars' factories in Sweden and Belgium, Geely said the Swedish company would be run as a separate company with its headquarters in Gothenburg.  With a workforce of 12,000 people, including 1600 engineers, the Geely group has grown into one of China's largest private carmakers since it launched its auto manufacturing business in 1997.It operates six car assembly and power-train manufacturing plants across China with a combined production capacity of 300,000 cars per year. The firm also owns nearly 500 dealerships and 600 service stations in the country.Geely has an overseas sales and service network of nearly 300 outlets and runs plants in foreign countries including Ukraine, Russia and Indonesia. Overseas sales have totalled less than 200,000 units.

In welcoming the $2 billion takeover of Volvo Cars Corp by the Geely automotive group, Desselss said it would be business as usual in Australia.  "Now that it's done I think we can move forward with a lot more certainty and conviction," he said.Desselss welcomed yesterday's announcement that the Geely car company will pay Ford $2 billion for Volvo Cars Corp.  The price includes a $200 million note and the remainder to be paid in cash. Ford bought Volvo for $6.5 billion in 1999."It's a bargain for Geely," Desselss said. "I don't think too many Western companies have that sort of money."  Desselss said Geely understands where Volvo should be heading."They want Volvo to continue to grow and they're prepared to invest in it," he said.  Desselss says the biggest opportunity for Volvo was in the Chinese premium market."The Chinese premium segment is scheduled to grow quite significantly over the next five to 10 years.  It is expected to grow from 40,000 cars to 600,000 cars by 2019."There are massive growth opportunities for any manufacturer in China.  Clearly, as a Chinese-owned company now obviously that's got to improve quite dramatically."Geely is one of the fastest growing Chinese brands, with a range of competent small cars.  Last year it sold more than 325,000 vehicles there, slightly less than Volvo's figure of 334,000 cars globally.The Swedish brand already has a small presence in China, selling 15,000 locally built S40 and S80s there last year.  However, Geely executives believe Volvo can sell upwards of 200,000 cars a year in China alone.Under the deal Ford will continue to provide Zhejian Geely Holding Group Co Ltd with powertrains, stampings and other vehicle components.  It will also provide engineering and IT support and access to component tooling for a set transition period.Geely chairman Li Shufu said Volvo would retain its identity and strategic independence.  The Ford sale comes on the back of General Motor's decision to offload Saab to the Dutch sportscar maker Spkyer and Hummer to the Chinese.Geely roughly translates to "I am lucky".  It's Volvo who could be the luckiest.

The current benchmark is the Proton S16, which will be priced from $10,990 in June, but the first Chinese imports are more likely to be priced against the Hyundai Getz in the $13,990 zone.Baby cars from Great Wall and Chery are expected first from China, followed by Geely, and the man leading the push says he is more worried about value than a rock-bottom price.  "We're not even trying to get to $10,990. Absolutely not. We don't see Proton as a big deal, to be honest," says Neville Crichton, boss of the Great Wall and Chery importer, Ateco."We'd like to stay, probably, dollar-for-dollar, where Hyundai is. But with better specced cars."  Crichton plans to have a 1.4-litre Great Wall car in showrooms in July, alongside a RAV4-size SUV, with the first Chery just a month later, and he is pushing value ahead of a rock-bottom price."We'll have better value in the cars. We will launch with a small SUV, the same size as a RAV4, which we will put in the market under $20,000, drive-away. It will be very competitive.  "I think it's just good-value motor cars. That's exactly what we're selling - good, reliable, economic transport."Great Wall is already underway with an SUV and ute and, despite a poor two-star ANCAP safety rating and a recall for the ute, Crichton predicts sales of around 8000 vehicles through 2010.  But he has much bigger plans when Chery and Great Wall get into gear."We certainly see that within three years we'll be selling in excess of 20,000 Chinese vehicles, between the two brands."  Ateco has huge experience as an independent importer, currently holding franchises from Ferrari to Citroen and Fiat, but its biggest volume success was with Kia. It took the brand to a major presence in Australia before Kia decided to buy the business back and Crichton says there is no reason he cannot do it again."We had a huge success with Kia, taking it to 26,000. They've had three years and they still haven't got back to that."  Crichton knows the safety concerns surrounding the Chinese cars but says his brands are moving rapidly away from their copycat roots, tweaking existing designs from western brands, and are capable of doing better than the two-star score for the Great Wall pickup."We would like a minimum of three stars. I think thtat's a good start.    With two airbags," he says.

The total for Great Wall alone, with Chery and Geely to join the action around the middle of this year, will hit 8000 vehicles by the end of 2010.  So says star importer Neville Crichton, whose company Ateco has a long list of successes including a 26,000-year with Kia before the Korean company bought the farm back in Australia."In five years we'll see the Chinese with a major, major share of the Australian market," says Crichton.  "I see no reason why we can't do the same (as Kia) with the Chinese brands. We certainly see that within three years we'll be selling in excess of 20,000 Chinese vehicles, between our two brands, Great Wall and Chery."There is already a Great Wall pickup and SUV in Australia, with Chery about to open with a RAV4-sized SUV at $19,990 drive-away and a 1.4-litre car as the price leader. But Crichton says there will not be a sub-$10,000 car in the Chery family."We'd like to stay, probably, dollar-for-dollar, where Hyundai is. But with better specced cars," he says.  He also sees a surprising twist, as the Chinese brands target Japan ahead of Korea.  "I don't see the Japanese disappearing, but I think the Chinese cars will affect them more than the Koreans. Strictly on price,” Crichton says."If you walked into one of their factories, blindfolded, you would think it was Volkswagen or Audi factory. They are getting very good, very quickly.  "We've got a lot of faith in our Chinese partners."While Ateco has Great Wall and Chery - at least a first - the Geely brand will be imported by John Hughes of Perth. He plans to have three WA dealers operating around midyear, with a progressive national rollout.

This week's high-level Federal Government visit to China is already yielding positive results for not only the car component sector but the local industry as a whole. Industry Minister, Senator Kim Carr, says several large Chinese brands, including Chery, JAC, Geely and Dongfeng, are seeking new markets like Australia for technology and investment, particularly in the depressed components sector.Trade Minister, Simon Crean, joined Senator Carr on his lightning visit to the country's leading manufacturers. Carr says that apart from direct investment, there is room for reciprocal agreements between the local supply industry and China. "We've seen with Geely in terms of Drivetrain Systems International transmissions but there are other investments," he says."I'm expecting that there will be increased interest in the components section of the automotive industry," Carr says. "That's likely to be quite an attractive area for future investment from the Chinese motor producers." Some of that investment is already bearing fruit.In March, Chinese carmaker Geely threw a lifeline to the Albury-based DSI transmission company, paying $52 million for the company to secure its future and boost its research and development.Carr says the Chinese are looking for high-quality developed technologies and partnership arrangements. "And they know, I believe there is increasing awareness, that Australia provides the capacity to produce good results in those areas," he says. "Now there are 11 companies operating here at the moment that have come out from Australia."Carr says research organisations like the CSIRO and even Geelong-based Deakin University, are working on technologies that will be very attractive to the Chinese car industry. "In terms of light metals, in terms of composite materials, in terms of fuel systems, there are huge opportunities opening up," he says.Australia's reputation as a mature, respected market is helping too. "We have a mature industry that might well be small in volume but is high in reputation," Carr says.Ultimately, he says the diversification of the local component and car sector will help "strengthen our industry's capacity to ensure its sustainability". The issue of intellectual property rights, a controversial problem between some foreign carmakers and some Chinese brands, was also discussed.

New cars as cheap as $10,990 are about to zoom into the Australian market.Chinese models will be leading the way and are expected to shake up the local motoring scene, the way Korean cars did in the 1990s and Japanese makes in the 1970s.Budget-priced vehicles are also coming from India, Italy, Slovakia and the Czech Republic.China has hundreds of car makers with names such as Chery, Geely, Great Wall Motors, Nanjing, Hafei, Zhongxing, Zhonghua, Brilliance China and Shanghai Automotive.However, some of the Chinese models have fared poorly in European crash testing.The Brilliance BS6 sedan got only one star out of a possible five when tested last month, while an SUV Landwind made by Jiangling Motors scored a zero.It was the worst result in 20 years of testing.Details of what Chinese makes will be released here are being kept secret by executives of the companies which will join the invasion.The smaller Chinese cars are expected to start at $10,990.Industry observers agree and expect the Chinese strategy will be for cars to be priced under their Korean equivalents, which have recently been as low as $12,990 in order to get a footing in the crowded market.The arrival of the first Chinese-brand cars is being handled by Ateco Automotive, an independent importer which already brings in Alfa Romeo, Fiat, Citroen, Ferrari and Maserati.The deal is being masterminded by Ric Hull, the executive involved in establishing all the major Korean brands including Hyundai, Daewoo and Kia in Australia.Ateco spokesman Edward Rowe said Chinese cars could reach Australian showrooms by mid-2008. “We're still working on it. We're talking to specific companies but there is a confidentiality agreement in place,” he said.Rowe says the plan was to start Chinese imports with small cars, then increase the range. “Ultimately there will be a full range of cars and commercial vehicles,” he said.Chrysler has made a deal with Chery for a Chinese-made small car to be exported to the US and Canada.An Indian brand Mahindra went on sale in NSW last month and plans to open a Queensland dealer network by September.A spokeswoman said: “Talks are under way with a number of dealers. Queensland will be the next market for Mahindra, it's imminent.”The brand is starting with the Pik-Up utility, diesel-engined “one-tonners” from $23,990 but the spokeswoman said they were 'exploring their options' to sell more models.“There are other opportunities there, but we're concentrating on getting launched first.”Czech-made Skoda cars last sold here 25 years ago and will return in October, with a five-seat mini-people-mover called the Roomster, and the Octavia lift-back.Skoda head Matthew Wiesner said prices would be set against their Japanese equivalents, rather than at traditional European levels.

Ateco Automotive, which already imports Ferrari, Maserati, Alfa Romeo, Citroen and Fiat is deep in negotiations with a leading Chinese carmaker.The importer says it aims to show the first model at the next year's Sydney Motor Show in October, before the brand is officially launched a few months later.Ateco is not providing details, but admits it is working hard on a deal.Ateco won't comment on which Chinese brand — or brands —— it is negotiating with, but points out it needs a deal with a company that can offer a full suite of light commercial vehicles, an all-wheel-drive wagon and passenger cars.Chery Automobile is one of the brands most likely to be on its way to Australia. It has a full range of appropriate models and is keen on exports, though it is not the only contender.Geely Automobile also builds cars and vans, along with Hafei, which could also be in contention.The brand given the green light for Australia will come with bargain prices to offset concerns about sub-standard design and build.Ateco is keen to have another budget brand after importing Kia cars from South Korea from 2000 to the end of last year, when Kia Motors took over Australian distribution.

The striking little yellow Dongfeng D120 was a star at this week's Beijing motor show, the largest auto show in the massive Chinese market.The D120 was one of 15 cars at the show from Dongfeng, a major Chinese manufacturer. It has joint ventures with Citroen, Nissan and Honda.The show opened last Sunday amid rocketing sales with few signs that growing traffic congestion, pollution and rising oil prices were clouding the future of the industry.While international producers unveiled their latest products, the Chinese were displaying more than 180 domestic-made vehicles. Many of them are hoping that their inexpensive cars may one day find their way into global markets.Australian importer Ateco is looking at bringing Chinese-made cars Down Under within the next two years.Cars like the Geely, Great Wall, Chery and Red Flag are enjoying an almost 25 per cent market share in China, according to Xinhua news agency reports this week.After years of growth, China is the world's second largest car market after the US.In the first 10 months of 2006, 5.89 million cars were produced and 5.77 million cars sold in China, figures up 27 per cent and 26 per cent respectively from January-October 2005, according to the China Association of Automobile Manufacturers.If this trend does continue, China will have 100 million cars on its roads by 2020, up from43 million in 2005, a phenomenon that will cause severe pollution unless stricter emission controls are implemented, Xinhua says.More than 500,000 potential car buyers are expected to attend the 10-day show, many of them first-time buyers.International prestige brands are at the show keen to sell to the country's wealthy who are proud, and keen to flaunt their riches.It is this fast-growing generation of mainly under 35-year-old, self-made tycoons that the world's top luxury carmakers have now firmly set their sights on."We have more than 300,000 millionaires in China, so I think it's a good number for us to go into the market," Stephan Winkelmann, president and CEO of Lamborghini, says.Rolls Royce sales are up 50 per cent from last year and China has become its third largest market after the US and Britain, says Ian Robertson, chairman and chief executive."It is growing dramatically. There is a fast growing number of very rich people in this country," Robertson says.And sales in China, including Hong Kong, at 65 vehicles out of its global total of about 800, represented "nearly 10 per cent of our business," Robertson says.Porsche, which entered China in 2001, sold 857 cars in China last year and says it expects that figure to double this year.However, the show also comes as a new report shows there are problems with local production. Defects have been found in 77 per cent of domestically made cars, largely due to a price war forcing manufacturers to cut corners, according to an industry survey which was released this week.The range of defects, found within six months of the car being bought, involved tyres, airconditioning, brakes, locks and steering wheels, the China Daily newspaper reported, citing as its source the 2006 China Automobile Customer Satisfaction Index."The defects are a result of car makers constantly reducing prices and sacrificing quality," the paper quoted Fan Tianshun, director of the China Quality Association, which conducted the poll, as saying.For every 100 new cars, there were an average of 338 defects, much higher than last year's figure of 246.On average, China's car prices have dropped about 10,000 yuan ($A1250) per car each year over "the past few years" as manufacturers try to compete in the the booming market, the paper writes.Defects were more prevalent in cheaper cars in the 30,000 yuan ($A5000) to the 50,000 yuan ($A8240) range, such as China's Geely, Chery QQ and the Changan Alto.But fewer defects in more expensive cars helped result in customer satisfaction for China's domestically-built automobiles growing by 0.1 per cent so far this year over the figures reported in 2005. The index was based on a poll of 4648 participants in 36 cities this year, the paper reported.AFP