Second Chinese vehicle brand confirmed for Oz via Ateco – six months ahead of Chery
By JOHN MELLOR and MARTON PETTENDY 17 June 2008
AUSTRALIA’S first Chinese vehicle brand will be launched earlier than expected in October, beating Chery on sale here by almost six months.
GoAuto can exclusively confirm the surprise news that Great Wall Motors, likely to be known in Australia as GWM, will go on sale via a separate dealer network to Chery, which will also be imported and distributed by Ateco Automotive.
GWM’s first model will be Australia’s most affordable dual-cab utility, based on Great Wall’s Sailor, powered by a 2.3-litre petrol engine and priced “well under $20,000”, and will be followed by a full range of commercial and passenger vehicles.
Like Chery - which as previously reported will be introduced here by March next year, via the light-sized A1 hatch, the small A5 sedan and the compact Tiggo SUV - the GWM models will swap their Chinese-market names for alpha-numeric nameplates that are yet to be revealed.
The Great Wall initiative will give Ateco two Chinese franchises, which will be sold by two separate national distribution and dealer networks.
Ateco Automotive managing director Ric Hull told GoAuto: “We have been talking to Great Wall probably for as long as we have been talking to Chery.
Top to bottom: Australian-spec GWM "Sailor", Chinese Peri and Hover.
“We met with many auto-makers but really liked dealing with Great Wall. They have excellent facilities and are really excellent people to deal with. So we chose to develop that relationship with them.”
He said while the agreement was not quite signed “both sides are comfortable to the point where we are prepared to go public”.
The first vehicle through the approvals process will be a highly-specified two-wheel drive four-door pick-up, powered by a 78kW/190Nm 2.3-litre four-cylinder petrol engine.
Mr Hull said the Sailor will make ute ownership more affordable for trades people in the same way the Pregio achieved significant penetration of the van market for Kia.
He said that Ateco saw how successful the Pregio was for Kia “and we would like to think the pick-up can emulate some of that.
“Great Wall does not have a van in the line-up today but I would be very surprised if they don’t develop one.”
He added that the crew-cab, at under $20,000, would prove attractive to first-time buyers because it was a genuine five-seater.
GWM’s first model will significantly undercut SsangYong’s newest version of its Sports Dual Cab utility, the entry-level “Tradie” workhorse, which is available only in white, priced at $24,990 in 2WD guise.
On sale from earlier this month, the 2.0-litre turbo-diesel Tradie replaced Mahindra’s 2.3-litre turbo-diesel Pik-Up (priced from $25,990) as Australia’s cheapest twin-cab ute, matching or bettering many Japanese diesel single-cab and four-cylinder petrol twin-cab models.
The bargain-basement GWM ute will be followed “quickly” by a single-cab version, shortly before a 73kW/225Nm 2.8-litre turbo-diesel engine choice comes on line.
It’s believed the latter will come in the form of a heavily facelifted version of the Sailor, called the Wingle in China, which could be sold alongside the Sailor.
The GWM pick-ups will be followed in the first quarter of 2009 by a light-sized five-door hatch known in China as the Peri, which will come with a 65kW/115Nm 1.3-litre 16-valve four-cylinder petrol engine mated to both five-speed manual and four-speed automatic transmissions.
Interestingly, at 3548mm long, 1581mm high and 1580mm wide, and riding on a 2299mm wheelbase, the 1015kg Peri should compete directly with the Chery A1, due to emerge here around the same time.
Soon after that, also in the first quarter, there will be a small five-door SUV called the Hover in China, where it is available in both two and four-wheel drive configurations.
Powered by a Mitsubishi-sourced 16-valve 2.4-litre engine coupled to both five-speed manual and four-speed automatic transmissions, the compact GWM crossover will sell in the same segment as Chery’s Tiggo SUV.
Mr Hull said the Great Wall range included mid-sized cars and people-movers and that Ateco would like so see a full range of vehicles from its new partner.
He said that Ateco would most likely sell the cars under the brand GWM (standing for Great Wall Motors) instead of Great Wall.
“In China the pick-up sells under the name of sailor, but we are not bound in any way to use the Chinese names nor will we. We will probably use alpha-numeric names.
“It has been on sale in South Africa for a while, where it is known as the GWM Pick-up, but there are replacement pick-ups coming so we will have to think our way through that and most likely go to alpha-numeric nomenclature.”
Mr Hull said that the styling was contemporary and that versions being driven around in Australia we being accepted by the public as conventional vehicles. It is being seen “as just a regular pick-up.”
Asked if he saw any potential for cars under $10,000 in Australia, Mr Hull said: “As I have said all along I don’t expect to be super-cheap. I don’t think there will be any $9990 cars on our horizon but I think they will be very well priced.”
But Mr Hull said that he thought Chinese cars would provide a price-to-equipment advantage over other car-makers in Australia, which would continue for some time. “We will be pricing pretty much on the Koreans but better specced,” he said.
He said that while it was true that Chinese workers in the east were starting to attract higher wages, car-makers were moving to open new car plants further west, where wage pressures were at a minimum as workers were being recruited “off the land”.
“So labour will be plentiful and not extravagant in the foreseeable future.
“The investment levels are just amazing. There seems to be no shortage of capital to buy the latest equipment and this is certainly a very pronounced feature of the producers that we have talked to in China.
“They have magnificent plants. We went to the opening of a new Great Wall plant in October that will make 200,000 cars a year and it was absolutely breathtaking.”
Wanted: Instant dealer network
ATECO Automotive has embarked on an ambitious plan to create a new national dealer network for Great Wall Motors (to be known here as GWM) by October and a second separately administered network with different dealers for Chery by early 2009.
Both brands are going to need about 60 dealers each at launch, with plans for each network to grow to 120 dealers.
On current projections the company is looking to get sales for each brand into “the 20,000s within three to four years.”
Ateco managing director Ric Hull said that while both Chery and GWM were comfortable that Ateco was dealing with both companies, both brands will be sold out of separate showrooms.
“We will have a policy that no one dealer will have both brands,” he said, adding that finding dealers to set up two separate networks nationally will not be a problem.
“We are holding 200 applications which have been flowing in once dealers knew we were looking at Chinese brands. They are very good quality dealers in the main and some of the big groups have expressed interest. Applications are still flowing in at about one a day.
Mr Hull said the short lead time to set up a Great Wall network by October was something he had done before.
“When we first set up Daewoo we had less time and not as much of a head start, so we are confident we can do it. We will be on the road very shortly, visiting everyone who has expressed an interest.”
There will be a need for regional management in each state and Ateco is now gearing up to create new regional offices in each state, separate from existing Ateco regional offices.
Ateco will also be recruiting state management for Chery in the lead-up to next year’s launch as Chery will have to become separate as well.
Vehicle distribution will be put out to a logistics company.
“We (Ateco) already put any of the competitive elements of our business in the hands of dedicated people, but we will have to go even further where we have brands competing here that compete with each other in their home market. That is very important.”
Mr Hull said the model ranges would be kept “extremely simple”.
“We learned with the Korean brands that it is better that there is only one version of each model that comes reasonably well equipped. Dealers prefer it as well. It just makes life 10 times more sensible.
“Having GLs and GLXs and all of that stuff is a complexity you can well do without. I don’t think it sells any more cars and it just makes the running of the business that much more costly.
“You wind up with stock you don’t necessarily want in the place you don’t want it.
“If you are drop shipping at seven ports around the country, every time you make your range more complex you increase exponentially the chance of getting it wrong.
“And then you have to spend money to solve it by transferring to someone who wants it or bonusing a dealer to take something he doesn’t want.”