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Ateco pins volume hopes on LDV

Black gold: The diesel-powered LDV G10 launched this week is a major step forward for LDV, and with a new ute and SUV in the pipeline, Ateco is preparing for a significant sales increase.

Local LDV importer Ateco Automotive expects LDV sales to quadruple within two years

31 Oct 2016

ATECO Automotive executive chairman Neville Crichton has pinned the volume aspirations of his import business on Chinese commercial vehicle brand LDV, which he believes is destined to boom in Australia on the back of a burgeoning model range offering competitive quality.

Mr Crichton backed the LDV brand at a media event in Sydney this week, where executives from parent company Shanghai Automotive Industry Corporation (SAIC) were present, and said that by 2018 sales of LDV were expected to almost quadruple from this year’s anticipated 1600-unit tally to beyond 6000 units.

In an exclusive interview with GoAuto, Mr Crichton, whose business is also responsible for Foton, SsangYong, Chery (currently in recess) and, through its European Automotive Imports subsidiary, Maserati, said: “I see it (LDV) as the volume brand. We have other brands as well but as far as volume goes it’s turning LDV into a volume player.

“The big thing is, when we get the ute. If we had the ute from the first quarter the numbers would be very different. We’re hoping to have it available for dealers in August (next year). If it’s as late as that, it’s probably 3000 to 3500 (annual) units (in 2017).

“If we get it earlier, it could quite easily be 4500.”

Mr Crichton said that along with the ute-based SUV rival to the Toyota Fortuner on-board from early 2018, “we would see the brand doing with the utilities in excess of 500 cars per month easily” – or 6000 units that year.

Mr Crichton said he expected LDV sales to reach 1600 units this year, which would make the Chinese commercial vehicle brand Ateco Automotive’s strongest seller ahead of Foton (trending towards 900 units) and Maserati (600 units expected).

 center imageLeft: Ateco Automotive executive chairman Neville Chrichton.

“We will be a major player in the commercial market with LDV,” he said. “I don’t say we’ll knock Toyota off, that’s crazy stuff, but if you’d asked about Hyundai five years ago with a commercial brand, they’ve come in with iLoad and look what they’ve done with it.”

He also emphasised Ateco Automotive’s past success with the Kia franchise, selling the Pregio light van last decade.

“We did it with Pregio a few years ago, from nothing up to about 1000 Pregios per month. We just came in with a van that was under our competitors with Pregio and it was very successful. We’re doing the same thing with LDV.

“I would see … well, by June next year we will outsell Peugeot and they’ve been here 50 years.

“We’re not going to be a little brand. We certainly intend to be a major player with this brand, it’s growing and we know where it’s going.”

While Mr Crichton has considerable experience bringing Chinese brands to market, he confessed the experience with Great Wall – which included major recalls, poor crash-test results and a long dispute with management in China over car pricing and other costs, which effectively paralysed the brand in Australia before the issue was resolved earlier this year – was not a positive one, and reflected unfairly on LDV.

Great Wall is now being sold through a newly established factory operation, which recently launched the new-generation Steed utility.

“I’ve got to say one of our previous brands did a lot of damage to brand by pulling out and not supplying the customers (and) without doubt having asbestos in the vehicles didn’t help anyone,” he said, referring to the 23,000-unit recall of Great Wall (and Chery) vehicles in 2012 over an under-bonnet asbestos issue.

Asked whether he believed LDV models were better products, Mr Crichton replied: “A thousand per cent.

“As far as the product goes if you pulled the badge off an LDV and put a (Hyundai) iLoad beside it with no badging, you wouldn’t know the difference, they’re as good as one another.

“They (LDV) have learned quality-wise from Volkswagen and General Motors.

Anyone that’s buying the product loves it, we know the issues we’ve had with previous brands and these things just aren’t giving us problems at all.

“One company has bought up to 100 cars and we’re getting a good indication now if there are any issues, and there aren’t. The quality is very, very good.”

For that reason, Mr Crichton said he did not believe the current G10 mid-size van and people-mover, the larger V80 van or future products such as the HiLux-sized ute (see separate story) and Fortuner-rivalling SUV would require “bottom of the bucket” pricing.

Asked whether it would be difficult competing with the sales-leading Ford Ranger with a relatively unknown vehicle, however, Mr Crichton replied: “Oh, without doubt it is, and they’re good vehicles and they’re well established, but Ranger by the time you put any gear on it’s over $50,000.”“(We’re targeting) probably $30,000. It will be under that as an entry. We haven’t priced it yet but it’s got to be under $30,000.”

He also predicted that the pick-up would achieve a maximum five-star ANCAP safety rating – the current V80 managed just three stars – and believed that customers would be convinced of LDV’s quality in the long term.

Increased sales would come through “marketing and reputation, and the cars on the road will do that very quickly”.

LDV general manager Dinesh Chinnappa added: “The van market is almost 80 per cent fleet and the key to selling in fleet is referral, repeat, referral, repeat. The V80, the G10, they’re already generating a heap of repeat business.”

Repeat business and the introduction of the pick-up will also be central to brand growth, and will require a doubling of the dealer network.

“We’re putting more dealers on and targeting more volume-based dealers than country dealers,” Mr Crichton said.

“This month I think we’ve signed five dealers. Australia-wide, it’s going to change dramatically by June next year. Currently it’s just gone to 43 this month, and we’ll be at 80. Mainly the ute will encourage the great increase in dealers.”

Despite an initial metro focus, Mr Chinnappa said that “when you add pick-ups you move into a rural environment and you can grow your volume without being predatory of the existing network”.

“The minute you start adding dual-cab utes, and pick-ups and cab-chassis, you’ve got to be in Coffs Harbour, you’ve got to be in Tamworth, you’ve got to be in Longreach, so there will be a natural expansion of the network even months prior to the pick-up’s arrival.”

By the start of 2018, LDV showrooms will then contain an entire pick-up and SUV range, in addition to the existing – and potentially updated – G10 and V80 models.

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