News - Great Wall
Great Wall product gap widens
H6 compact SUV delayed again as Great Wall’s Australian sales continue to slide
27 Jun 2014
GREAT Wall distributor Ateco Automotive is confident it can turn around the Chinese brand’s fortunes in Australia despite dwindling sales due to aggressive competition and a lack of new product on the horizon.
The Chinese car-maker has struggled to match the strong early sales it achieved in Australia, which reached as high as 11,000 units in 2012 – more than a variety of European and Japanese brands with SUVs and light commercial vehicles in their stable.
However, Great Wall sales last year plummeted 44.5 per cent to just 6105 units, and to the end of May this year its sales were down a further 54.1 per cent, with just 1429 new registrations recorded.
May’s return of just 235 units was the brand’s lowest monthly total since August 2009, a month after launching in Australia.
Part of the downturn can be attributed to the discontinuation of the X240 SUV, which fell victim to laws requiring electronic stability control (ESC) on all new passenger vehicles, while Ateco is still negotiating with Great Wall over a replacement model, the H6.
The H6 was originally scheduled to be launched in Australia in the first half of this year.
In China, overseas reports also indicate that sluggish sales in Great Wall’s home market and quality issues plaguing its new H8 large SUV had led to the replacement of several senior executives, although the company described the moves as a normal rotation of management.
Ateco Automotive’s Asian brands spokesman Daniel Cotterill told GoAuto that he hoped the change in management at Great Wall headquarters will make “some sort of difference” to the company’s prospects, particularly in relation to how vehicles are priced.
“The devaluation of Japanese yen has taken away a lot of price advantage that Great Wall once enjoyed,” he said. “It is no secret that we have been negotiating very hard with Great Wall to try and restore some of that advantage, but without too much luck so far.” Mr Cotterill said there were a number of factors for the brand’s sales slide in Australia, but the devaluing of the Japanese yen by about 25 per cent early last year had a major impact on Great Wall’s perceived price advantage.
“The car business is as much a ‘currency business’ so it fundamentally alters the way you are able to function,” he said.
“As a relatively new brand, you are competing largely on price (but) then (if) any number of very well established Japanese brands can compete with you and your price gap is now nonexistent, or it’s now $1000 instead of $5000 or $6000, it really throws your business model into doubt.”
Another factor in the sales downturn is Great Wall’s ageing product line-up, with the V-series utility dating back to 2006 and the X-series SUV debuting in 2009.
This has been exacerbated by the lack of new product arriving from China, most notably the H6 compact SUV.
Mr Cotterill said Ateco was “still negotiating” with Great Wall over the model’s release in Australia.
“It is something we would like to sell here, but as I have mentioned, given the competitive nature of the market here it is not viable for us to do so unless we can get the price that we need to go along with the specification of the vehicle and the certain level of quality and so on,” he said.
Great Wall launched its new Haval H8 flagship SUV at the Beijing motor show in April this year, but the company subsequently halted domestic sales following the discovery of several quality issues.
This followed a series of unfavourable media reviews for the new high-end SUV that forced the company to delay the vehicle’s on-sale date in China.
Mr Cotterill said it was “too early” to discuss whether the H8 would be a fit for its local line-up once these issues were resolved, but added that the recent management changes could have a positive effect on the situation.
“I guess the H8 (situation) is unfortunate for the company, but clearly they have recognised that they need a more detailed or systematic approach, and perhaps those management changes are their first steps in changing that,” he said.
“The management at Ateco has seen it from Japan in the past and from Korea and now from China, so whether it was the H8 from Great Wall or some as yet unspecified product from another manufacturer, the more modern and better developed the vehicle, the more interested we are likely to be in it providing we can get it to market at a competitive price.
“And that holds good for any of them.”
Mr Cotterill added that Ateco remained optimistic that market conditions would eventually turn around and favour the Chinese brands in its stable, which also include Foton and Chery.
“It is clearly cyclical,” he said. “These things with currencies are up and down. It’s nothing people who have been in the industry a while haven’t seen before.
“We remain optimistic that that cycle will play itself out and we will be able to restore some of our competitive advantage and move on.”
4th of April 2014
Great Wall sales slide againKeen pricing from rivals and ageing model line-up keep Great Wall on the back foot
19th of September 2013
Turbo power for Great Wall’s all-new SUVChina’s top-selling SUV to get turbo engine when Great Wall H6 lobs here in 2014
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