Great Wall News

Cars from China were poised to be the Next Big Thing but sales have tanked. It may go down in automotive history as the Great Fall of China. Despite promising to challenge the big brands when they arrived five years ago, sales of Chinese cars have plummeted as the cost of mainstream cars have limboed to new lows, squeezing out the cut-price competition. Deliveries of Chinese cars have been in freefall for more than 18 months, and the situation is so dire the distributor of Great Wall Motors and Chery vehicles stopped importing cars for at least two months. The Australian distributor says it was "renegotiating" prices with the Chinese car makers but dealers say they haven’t been able to order cars for up to six months. Sales of all Chinese cars have halved so far this year alone; Great Wall Motors sales are down by 54 per cent while Chery deliveries are down by 40 per cent, according to figures supplied by the Federal Chamber of Automotive Industries. Just 1782 cars from China have been sold in the first five months of this year, down from 3565 for the same period last year. At their peak in 2012, more than 12,100 Chinese cars were sold locally. There are now at least seven Chinese car brands on sale in Australia but Great Wall and Chery are the largest; the others are yet to publish sales figures. A spokesman for Ateco, the distributor of Great Wall Motors, Chery and Foton vehicles from China said there "a range of factors" for the sharp sales slowdown. "Primarily it is to do with currency," said Ateco spokesman Daniel Cotterill. "The massive devaluation of the Japanese Yen in early 2013 has meant that well established Japanese vehicle brands are able to be much more competitively priced in the Australian market than was the case when Great Wall launched here in mid 2009." He said new brands traditionally compete on price, but that price advantage had all but evaporated. "Where once a Great Wall ute might have had six or seven thousand dollars of price advantage over an established Japanese brand, that is not the case at the moment in many instances," said Cotterill. "Currency fluctuations are cyclical and we remain optimistic that our competitive price position will return. In the meantime it is business as usual." The sales downturn comes as Great Wall Motors has a management reshuffle in China after its all-new SUV had to be withdrawn from sales twice because of quality concerns. The Bloomberg news agency reported that the reshuffle comes after the company posted sales declines in five of the past six months. The company also has twice delayed the introduction of its key new model, the Haval H8 SUV. Last month, Great Wall said it will hold off on sales of the vehicle until it is able to make the H8 of a "premium standard." In May Bloomberg reported that Great Wall suspended sales of the H8 after customers reported hearing "knocking noises" in the transmission system. The Haval H8 was supposed to mark a turning point for Great Wall Motors and promised to meet European crash safety standards. A slightly smaller SUV, the Haval H6, was due to be sold in Australia this year but the distributor says its arrival has been delayed by negotiations over currency - not because of any safety concerns. The reputation of Great Wall Motors and Chery vehicles took a hit in Australia in late 2012 when 21,000 Great Wall utes and SUVs and 2250 Chery passenger cars were recalled for having parts containing asbestos. Sales of both brands have been in freefall ever since.

Great Wall's Australian distributors Ateco Automotive have issued a recall notice for the brand's V200 utes, in which the position of a bracket in the engine bay means the wiring harness can rub against the bottom of the radiator, wearing through the wiring insulation. The defect can prevent the vehicle from properly earthing, which can cause the alternator dash light to activate, the battery to go flat, and the wiring to melt.The problem affects 9134 of the Great Wall V200 2.0-litre turbodiesel utes, which have been something of a price leader in the segment, starting at $22,990. The recall affects both both rear-wheel and 4WD versions. However the defect does not affect the largely mechanically identical X200 SUV, as while it uses the same drivetrain it has a different wiring harness bracket.The safety recall affects all model years of the Great Wall V200s sold since they first arrived in 2011. According to official VFACTS figures, Great Wall sold 2667 of the V200 in 2013, 4793 in 2012, and 1170 when it first appeared in 2011, for a total of 8630 to the end of 2013. The remaining 533 have either been sold during the first weeks of January or are still sitting in dealers' stock.Ateco is sending a letter to all affected customers, advising them to contact their nearest authorised dealer and have their ute inspected and the problem rectified.Great Wall spokesman Daniel Cotterill says the fix is a fairly minor job in most cases, and will not take up much of the owners' time."For most of the affected cars, what they have to do is inspect the bracket and if necessary adjust it to give extra clearance to the harness and components around it. On most of them it won't have even been rubbing, but the inspection and adjustment will take about 20 minutes," Cotterill says."On some of the vehicles, they will need to repair the wiring harness because it will have been rubbing, and that will take a total of 30 minutes for inspection and repair. On a very small minority -- we believe only about 30 vehicles of the 9134 recalled -- they might  find the wire has been exposed and the insulation can't been repaired, and under those cirsumctances they need to replace the harness, which will take about two hours."Cotterill says there have been no accidents associated with the defect. "The worst reported is some melted insulation, warning lights coming on, batteries not charging -- that sort of thing.

The bargain basement end of the compact soft-roader market is likely to get a shake-up in the new year with a fresh arrival from China’s Great Wall Motors. The new generation Toyota RAV4 rival -- called the Great Wall H6 -- has been caught on camera in Australia ahead of a showroom debut early next year.The top-sellers in the compact SUV class start at close to $30,000 but Great Wall is understood to be targeting a sub-$25,000 price point for the H6. The Great Wall’s sharp price will likely force the established brands to discount, giving all buyers a better deal no matter which SUV they buy.Unlike the current Great Wall SUV -- which has a body mounted on a ute “ladder frame” chassis -- the new H6 model has a modern monocoque car-like construction. Chinese cars are yet to set any new safety benchmarks in Australia but the new model is expected to be the best from that country to date in crash tests.Apart from being an all-new design it will come standard with six airbags and stability control. The current Great Wall SUV earns a four-star rating and it is understood that the company was aiming for a five-star ANCAP result. However, Great Wall would not indicate the results from internal crash tests, instead preferring to wait for the independent umpire to test and rate the new model.The new H6 will be a petrol-only SUV to begin with, powered by an all-new super-efficient 1.5-litre turbo four-cylinder paired with a six-speed automatic transmission. Carsguide understands that Great Wall will continue to sell the X200 diesel SUV alongside the H6 for at least another year, until a diesel becomes available in the new model.After a strong start in the first two years sale, official figures for the first nine months of the year show Great Wall Motors deliveries are down by 40 per cent compared with the same period the previous year -- in a record market that is up by 3.3 per cent. Other Chinese brands such as Foton have also had a stalled start. After announcing big plans two years ago Foton has sold fewer than 300 pick-ups in that time.Budget brand Geely has still restricted its sales to Western Australia and Chery’s small cars have been stymied by newer competition from established brands. Chery sales are down by 20 per cent year-to-date. The Chery J1 hatchback was the cheapest car in Australia in almost two decades when it went on sale with a $9990 drive-away price in 2011. But it too has failed to rock the sales charts.This reporter is on Twitter: @JoshuaDowling 

Hong Kong-listed Great Wall Motor has the fattest margins in the auto world, according to Sanford Bernstein's Max Warburton. It posted an operating profit margin of 18.4 per cent in the first half of 2013. That tops even Ferrari, which was at 14.9 per cent in the same period.Great Wall's secret sauce is that sport utility vehicles, which typically yield higher profits, account for half of the autos it sells. In contrast, SUVs on average make about a third of a carmaker's volumes in North America, according to research firm LMC Automotive. That sector is about a fifth in China.Great Wall also runs a lean operation by spending little on research and development or marketing. It has become one of a handful of Chinese companies to build a domestic brand, rather than rely on foreign partners such as General Motors.China's insatiable demand for SUVs has helped Great Wall. Despite the economic slowdown, sales of these vehicles are projected to grow 22 per cent this year, compared with 13 per cent for passenger cars overall, says LMC Automotive. Consumers want these larger cars either as trophies or to navigate the country's rough roads.Great Wall's SUV sales soared 78 per cent, year on year, in the first half, mostly by catering to the lower end of the market with vehicles priced below $US30,000 ($33,500). It leads China's SUV market along with Volkswagen and Honda, according to Nomura.The next test for the company: can it move up the product ladder? It plans to launch a bigger and more expensive SUV next year. But Great Wall's low research and development budget, at just 2.2 per cent of sales, may prove a stumbling block.Toyota spends almost double that on R&D. And at the higher end of the market, Great Wall will also encounter stiffer foreign competition.Quality is another concern. There are already complaints Great Wall's engine is underpowered. To address these problems and further automate its production, Great Wall may have to increase costs, sacrificing some of its margin.Great Wall's Hong Kong-listed shares are up 64 per cent this year, while the Hang Seng index is down 3 per cent. 

The Townsville dealership of China's Great Wall Motors is to have a new showroom. The Motoco Group, operated by Jason Collins and Alan Baxter, has confirmed its purchase of the former BP service station site at the corner of Bowen Rd and Balls Lane, Mundingburra, for $1 million.The firm will spend about another $500,000 converting the property into a showroom and car yard for the dealership, which it has operated for about four years. It will also sell Foton light trucks. Motoco dealer Jason Collins said the Great Wall team, which had traded almost opposite on Bowen Rd alongside its used car business, had earned its new location.“They should have their own stand-alone facility,” Mr Collins said. “We are consistently in the top 10 in Australia with Great Wall.” There are about 80 Great Wall dealerships around the country and the number is growing. It is one of the largest manufacturers in China, where the auto industry has exploded in recent years to become the world's largest vehicle maker.Work to fit out the new Townsville showroom has just began. “It will be gutted and turned into a showroom with a new glass facade and a modern awning,” Mr Collins said. He said they were confident about the prospects for business in Townsville despite a difficult market recently.“Townsville has been very good to this business,” Mr Collins said. “Talking to the Gold Coast dealers, they are still doing it tough and there's a general feeling that we have it far better in this area.” Peter Wheeler of Colliers International Townsville, who negotiated the sale of the 2233sq m property, said the purchase opposite Motoco's Audi Townsville Centre was a logical extension of their business.But with interest rates at their lowest levels for some 50 years, it was also a well-timed move. “Now really is the time to be buying. It's a good time to be getting into the market,” Mr Wheeler said. The Motoco Group which also operates in Cairns was formerly Honeycombes Cars. It has dealerships in Audi, Alfa Romeo, Citroen, Fiat, Great Wall, Peugeot, Winnebago and Millard. It is also involved in Rising Sun Marine and Townsville Suzuki Marine dealerships.tony.raggatt@news.com.au 

Chinese cars were tipped to dominate the budget-car class and challenge established brands in half the time it took Japanese and South Korean companies - but the bubble has burst before it's properly inflated. After some early success since becoming the first Chinese brand to go on sale in Australia, Great Wall Motors has hit reverse and its Chinese peers are struggling to get into first gear.Official figures for the first five months of the year show Great Wall Motors deliveries are down by 35 per cent compared with the same period the previous year in a record market that is up by 4.5 per cent.Other Chinese brands such as Foton have also had a stalled start. After announcing big plans two years ago Foton has sold fewer than 300 pick-ups in that time.Budget brand Geely has still restricted its sales to Western Australia and Chery's small cars have been stymied by newer competition from established brands. Chery sales are also down by 35 per cent.The Chery J1 hatchback was the cheapest car in Australia in almost two decades when it went on sale with a $9990 drive-away price in 2011, and is now available with a "pay half now, half later'' deal.But it too has failed to rock the sales charts. ''Sales have slowed for now but they will recover,'' says Daniel Cotterill, the spokesman for Ateco, distributor of Great Wall Motors and Chery passenger cars and the Foton truck range.''It's been frustrating for us and the dealers to not have more new models available to us as quickly as we would like."'The other challenge for Chinese car brands is that mainstream marques such as Suzuki, Nissan and Volkswagen have all responded with quality cut-price contenders priced from $11,990 to $13,990 drive-away. "In some ways we are a victim of our initial success,'' said Cotterill. "Other mainstream brands have had to come down in price to compete with us.''Other hurdles: more than 20,000 Great Wall Motors and Chery vehicles were recalled in August 2012 for having asbestos components in their engines. Chinese cars tend to earn poor to scores in crash tests (between two and four stars when the modern industry norm is five stars).But the companies hope to have a reversal of fortunes with a number of new generation Chinese vehicles made to international standards due in local showrooms in the next two years.''There are new models in the pipeline,'' said Cotterill.''We are confident in the ability of the Chinese to respond the Australian car market and boost sales.''This reporter is on Twitter: @JoshuaDowling 

-- Next Great Wall SUV engineered for top safety score-- New models will go up in price but still cost less than $25,000-- Great Wall Motors to establish research division in Melbourne-- New Thailand factory will help keep up with global demandThey won’t be quite as affordable as before. The first-ever Chinese car expected to be awarded five stars for safety is due on sale in Australia by the end of the year – at least three years earlier than industry pundits had predicted.The next generation Great Wall Motors compact SUV -- similar in size to a Subaru Forester – is expected to come fully equipped with six airbags, stability control and a greatly improved body structure that has been designed to meet Australian ANCAP crash safety standards, among the most stringent in the world.The boss of Great Wall Motors, Madam Wang, told News Limited at last weekend’s Shanghai motor show that the next two all-new SUVs -- one due on sale this year, the other in 2014 -- were engineered to earn a five-star safety score.“We must wait for ANCAP to test the cars our internal testing has shown we have made the necessary improvements to earn a five-star rating,” she said, speaking through an interpreter. Chinese cars have long had a cloud over their quality, safety and reliability since the first one went on sale locally in 2009.The first Chinese-made vehicles crash-tested in Australia scored just two stars out of five for safety. Last year, more than 23,000 Chinese vehicles were recalled because their engines were assembled with gaskets which contained the banned substance asbestos.The company says it has learned from its harsh lessons and future models will be built to global standards. However prices are likely to rise, which will diminish some of the appeal to cost-conscious car buyers in Australia.The current Great Wall SUV range starts at $21,990 and tops out at $28,990, but the new model will creep up in price. “In the past we have sold old models with a low price. In the future we will have more new models. The quality will be better and accordingly the price will be a bit higher. But the competitiveness will be maintained,” Madam Wang said.The Great Wall Motors boss acknowledged that Australia is an important test market for the company and, as a result, will establish by the end of this year a marketing and research division in Melbourne, with about 12 staff. This is in addition to the operations of the independent distributor, Ateco Automotive, which handles Great Wall Motors in Australia.“The Australian market has provided us a lot of experience,” Madam Wang said. “There have been many problems we hope in the future, when we enter mature markets, we won’t have problems such as the asbestos.”Great Wall Motors is the biggest Chinese-branded car maker globally, ranking eighth among all international car manufacturers in its domestic market. It sold 620,000 cars in China and abroad last year. In Australia, the company sold about 11,000 vehicles, ranking it ahead of established brands such as Land Rover, Lexus, Peugeot, Volvo and ute maker Isuzu.Meanwhile, Great Wall Motors is expected to be one of the first Chinese car makers to join its Japanese rivals with a car factory in Thailand. It will produce two new vehicles designed for export, including to Australia.The Great Wall factory in Thailand is expected to be operational in 2015. The company is yet to announce which vehicles it will build there, but a small car and a pick-up are the most likely candidates given they are among two of the three most popular vehicle types in the region. 

You might have seen the TV ad for a budget brand ute, the one in which the dopey looking bloke goes “d'oh” because he bought a far more expensive brand.Sure, he's down a few thousand bucks but he, his loved ones and possibly even his employer won't be so quick to self-admonishment should he survive a big prang.The chances of this happy outcome remains lower in Chinese-made working vehicles than in any from the Japanese brands, Ford, Holden or Volkswagen. Much lower in most instances.In the past month, the Australian New Car Assessment Program -- the line-filling moniker for the local agency that crashes cars into walls and rates how they hold up -- crunched the body of and the numbers on the latest such conveyance from Cathay.Foton's Tunland 4WD light-commercial dual-cab was awarded three stars from five. That's almost but not quite as poor as it gets these days, but a possibly generous assessment given the absence of electronic equipment mandatory for the full five stars.Nor is the Tunland especially cheap at $34,500. Hard to grasp why that sum shouldn't include stability control, a fixture standard elsewhere and arguably even more important for vehicles with a high centre of gravity.“There really is no excuse for a new vehicle coming into the market today to be without stability control, which is now mandatory for passenger cars,” ANCAP's Lauchlan McIntosh says.ANCAP is irksomely apt to claim credit for pushing major safety advances that originate with car makers and are compelled by market forces. Yet it has also admitted to being two years behind Euro NCAP in its methodology.There’s no quibbling on this point, however, certainly not when two such old stagers as Toyota's LandCruiser and Mitsubishi's Pajero have both been upgraded to five stars after equipment improvements.The Chinese brands fare not so well. The Chery J1 gets three stars, and the Chery J11 gets two stars. The Great Wall V240 gets two stars and X240 gets four stars. Carsguide does not recommend a vehicle of any sort that has less than four stars. Indeed, we’ve directed our team to not so much as test them. We say you shouldn’t so why should we. Some of us have families. None of us are suicidal. 

... with a facelift and more gear for the X240 and a facelift plus price slice for the V240 ute. And importers Ateco promise there's more to come with diesel engines and automatic transmission options on the way.For now the X240 wagon scores new front panels and grille, Bluetooth, steering wheel controls, DVD player, reversing camera, follow-me-home headlights, rain sensitive wipers and a touch-screen for the audio system. The on-road price remains at $23,990.The Great Wall V240 dual cab also gets new front panels and grille plus the steering wheel controls but here the on-road price has been cut $1000 to $22,990 for the two-wheel drive; the four-wheel drive is a $3000 option.Ateco spokesman Daniel Cotterill says the facelift and equipment changes are part of a refresh across the range."The V240 ute's price has dropped for a couple of reasons, the currency's quite good at the moment and, with China being a left-hand drive market, it cost them money to develop and homologate right-hand drive vehicles," Cotterill said. "They're now starting to recoup some of those costs (Australia's already sold 10,000 Great Walls) and we can pass on these savings to the customer."And Ateco's push to broaden the range is paying dividends."The main things we've been chasing are diesel engines and automatic transmissions, we'd dearly love to be operating in those segments," he said. "And we should see those (diesel and auto options) later in the year, most likely in the third quarter, starting with manual diesel utes first."The first diesel option is likely to be Great Wall's 2 litre, 110kW turbocharged engine and the automatic transmission, for the wagon at least, should be a five-speed. For now Ateco managing director Ric Hull is upbeat about this month's upgraded machines following Great Wall's promising start on the Australian market with 10,000 sold in the 18 months since launch. "These upgrades and the extra value they add, along with the price decrease on the utility, will help us sell another 10,000 Great Wall vehicles in 2011," according to Hull.

She wants to know which of the car brands will improve over the next five years.  It sounds like a quick-and-easy question but there are booby traps on a couple of fronts.For a start, what does she mean by 'improve'? Is it just sales, the big measure for brands like Toyota, or is it secondhand vaues - so critical to Audi - or the technology coming to companies like Hyundai and Kia, or any number of other subjective and objective measurements?Looking back over the past five years, Audi has made huge sales gains by improving its showroom impact, Mazda has improved on all fronts and is now almost challenging Ford's sales in Australia, and Subaru has reinvented itself as one of the safest and most-dependable brands - almost the Volvo of the 21st century.They are clear improvers.  But things will change in the next decade for many of the 50-plus car brands now sold in Australia.For a start, expect big things from Great Wall, Geely and Chery of China. Probably not on the safety or quality front, but they will do some big numbers once they get cheap-and-cheerful passenger cars into local showrooms.The Korea brands - Hyundai and Kia - are also set for big improvements. Both want to be top-five sellers in Australia before 2020, each has plans for significant local tweaking of their cars, and believe they can out-Toyota the world's biggest car brand at its own game.  What's that? Building sensible transport devices that suit the majority of drivers and doing it at a sensible price.Audi will also continue to improve. It has monster plans for new models, as well as a burning desire to trump BMW on the sales charts.  BMW? It's looking hit-and-miss at the moment, based on cars as good as the new 5 Series in the same showroom as the underwhelming X1 and GT, but it knows its strengths and has a huge following.Benz should also continue to power, Volvo is making big gains on styling that finally matches its safety but has a question over Chinese owners, and Mazda will continue to go forward.  On the local front, Toyota desperately needs something special in its showrooms. And the Camry hybrid is doing nothing to boost the competitiveness of its locally-made cars.Ford? If it can convince Australians to buy a four-cylinder Falcon it will be a winner. But that is a big, big job and recent history shows little sign of the marketing muscle needed for the job.Which brings us to Holden, which gambles next year with a local manufacturing commitment to the compact Cruze. It's a game changing move and one with the potential to make the red lion brand one of the biggest improvers of the next five and 10 years.Follow Paul Gover on Twitter!