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Chery concepts set success agenda for Australia

Hire power: Former Porsche designer Hakan Saracoglu representing his new employer Chery at the Beijing motor show beside the Beta SUV concept.

Early setbacks no barrier to bright future as Ateco stays committed to Chery success

24 Apr 2014

CHERY'S shaky start in Australia has not diminished the optimism of importer Ateco Automotive, which is keeping a firm eye on a bright future for one of this country's pioneering Chinese car brands.

Two concepts unveiled at this week's Beijing motor show – particularly the sleek Alpha sedan – demonstrate the gathering pace of Chery's design-led product revolution that is aimed at increasing its appeal in western markets.

The brand is already China's largest car exporter and Ateco's Asian brand PR consultant Daniel Cotterill told GoAuto this deep-set international focus is the main driver of confidence that Chery will eventually deliver success in Australia.

“We keep a very close eye on the Chinese automotive industry and there is all sorts of potential there – but to the best of our knowledge of the major domestic players, Chery has got the best chance (of Australian success) given they are focussed on export sales,” he said.

“Chery have been at the forefront of China's automotive exports from the start so they have that view of the world that they would like to succeed.” The idea of quitting – as General Motors' European brand Opel did here after just a year – never crossed the minds of either Ateco or Chery.

“That determination (on Ateco's part) comes from the top. Neville Crichton (chairman) and Ric Hull (MD) have both been around a long time, imported cars from all over the world and there is nothing happening here that is new to them,” said Mr Cotterill.

“They (Chery) have stuck at it and as we have seen, with each new product the quality gets better, the designs are getting better and we think that ultimately given their size and their drive, that has to translate into success,” said Mr Cotterill.

“It is fair to say (Chery) has some way to go we have seen that (in Australia) where they have achieved a level of success but not quite what we – or Chery – would have liked. But they haven't quit.” The Alpha sedan and striking Beta SUV concepts shown at Beijing have further strengthened Ateco's resolve.

“What were drawing from (the Beijing concepts) and the Arizzo 7 (of which left-hand drive models are being evaluated in Australia), Chery are really focussing on spending their energy, talents and money on the right areas and that underpins our optimism in their eventual success,” said Mr Cotterill.

“When you see that kind of design come along, improvements in the quality of existing models let alone future ones on much newer platforms, that is why the industry hard-heads in Ateco start to say 'we think these guys are going to make it'.” As reported in February, Chery has attracted former Porsche designer Hakan Saracoglu to work alongside former General Motors designer James Hope (pictured below) to help develop a strong style that is both distinctive and appealing to global markets.

The Alpha concept points closely to the forthcoming Arizzo 5 sedan, while the more outlandish Beta will eventually morph into a production SUV expected to launch in 2016.

“What you are seeing is a maturity in the company where they start to understand why they have been successful and by the same token, what they need to do to achieve that success again,” said Mr Cotterill.

He would not be drawn on specific future model plans for Australia, but confirmed Chery will stick to small cars and SUVs.

“It has to make sense for Chery in their model development line-up, it has to make sense for us and it has to make sense for dealers. There is no point in us bringing out larger cars … it is more about picking segments well and then concentrating on what Chery is able to do best.” In the meantime, Chery is finally launching in Victoria with 10 dealerships now the facelifted J11 has arrived with ESC, meaning Ateco might be able to turn around the brand's sagging sales, which reflect a wider downturn in Chinese vehicle volumes in Australia.

Regardless, in Ateco's opinion the only way is up for Chery and its global ambitions.

“There are some very large manufacturers in China who do equally or even more clever things than Chery but simply haven't turned their attention to Western markets yet,” said Mr Cotterill “They will have a steep learning curve that Chery and other manufacturers like Great Wall have invested a lot of time and money in learning.” Mr Cotterill said Ateco's hard-won experience will also come to the fore in helping Chery achieve its aims here.

“Although we are very positive we are also conservative, so it is a case of applying lessons we have learnt the hard way as diligently and consistently as we can with Chery and our dealers – and we will get there.” Chery's well-documented Australian battle started before its March 2011 launch due to the Victorian state government making electronic stability control mandatory a year before the rest of the country, quashing Ateco's ability establish the brand in the nation's second most populous state.

Later that year the J1 light car scored a disappointing three stars in ANCAP crash tests and the J11 SUV took the dubious honour of being Australia's only two-star car, while Ateco's prediction that a recall to upgrade the J1's front seats would enable the vehicle to achieve four stars was met with a frosty response from ANCAP.

Then in 2012, more than 500 J3 light cars and 1700 J11s were affected by an asbestos scare as Australian Customs discovered the banned and potentially deadly substance in their engine and exhaust gaskets.

“When we launched, timing and other things out of our control conspired to make it not run quite as well as we would like,” confessed Mr Cotterill.

“People take a very hard-nosed business view with launching a new brand. Was (the series of setbacks) apparent then? Not completely. Was it a possibility that it would go like this, yes. Did we hope it would be more along the lines of what we were achieving with Great Wall at the time? Certainly.

“Nobody expected when we launched that Victoria would go 12 months early with ESC legislation and that undoubtedly hurt us, not being able to sell cars in the second most populous state in Australia for over a year and I don't think anyone anticipated that.” Mr Cotterill said there was a wider knock-on effect caused by media coverage of Chery in relation to Victorian ESC rules.

“The effect of ESC was more profound than not being to put cars on sale in Victoria. From that time onwards, in the media Chery was put in the context of being banned from sale in Victoria.

“Even when the legislation changed at the end of last year and a whole raft of cars could no longer be sold on the Australian market, the Chery was still reported in the context of 'banned' so that really was not helpful for us.”

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