Wandering China

An East/West pulse of China's fourth rise from down under.

[Chery J1] $11,990: New car for the price of a 1986 Corolla [The Age]


Australia | Hot on the heels of Great Wall Motors (whose tagline is ‘The Great Cars of China are Here’) and Geely Motors (the relatively recently minted owners of Volvo), comes Chery attempting to set new standards in affordability by offering $11,990 for a brand new cut-price hatchback. The price? Apparently the price of a 1986 Corolla.

For more on the Chery, check out their international site here. Founded in 1997 by 5 Anhui state owned investment companies, they rolled out their first in 1999. By 2007, they had rolled out their millionth. Quite some milestone indeed.

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$11,990: New car for the price of a 1986 Corolla
Richard Blackburn
Source – The Age, published February 24, 2011

Cherry J1 - Photo - The Age

Chinese car maker Chery is about to turn the clock back 25 years for new car buyers, with a new small car going on sale next week for just $11,990 drive-away.

That price is less than a Toyota Corolla cost in 1986.

The cut-price hatchback, called the J1, will be joined by the J11 compact SUV, which at $19,990 drive-away is the cheapest softroader on the market by a considerable margin. That price includes leather trim and standard airconditioning. A third vehicle, the Corolla-sized J3, will go on sale in the middle of this year.

Chery is just one of a wave of Chinese manufacturers set to rewrite the rules – and price-tags – in the Australian car market.

Great Wall Motors, which launched in 2009, has already made inroads with its range of SUVs and work utes, while Geely Motors, which now owns Volvo, has started selling cars in Western Australia.

Two other markers, JAC and Foton, are expected to hit local showrooms by the end of the year, while a sixth, an as-yet unnamed brand, has advertised for staff and called for expressions of interest in dealership franchises.

The imminent invasion of Chinese brands has already driven down the price of some cars, with Malaysian car maker Proton selling its S16 sedan for $11,990 drive-away and Holden, Suzuki, Kia and Nissan releasing smaller, cut-price cars.

Chery is China’s largest independent vehicle manufacturer, producing 680,000 cars a year. It is also the country’s biggest exporter, accounting for almost half the vehicles sold overseas by Chinese car makers.

Its arrival is bad news for Holden, which will launch its second locally built car, the Cruze small car, next month. The Chinese cars are likely to put pressure on both volumes and profit margins for the Holden.

The influx of Chinese cars is not all good news for consumers, as they’ve traditionally come with poor crash protection standards and questionable quality.

View Geely’s zero star crash test rating video

The cars will not be sold in Victoria until later this year because they do not comply with that state’s mandate that all new cars come with stability control, which can prevent a car from skidding.

But a spokesman for Chery, Daniel Cotterill, said safety fears were unfounded.

“I think the Chinese car industry has moved a long way from those early crash tests,” he said.

“These vehicles comply with all the Australian design rules and they are a decent, reliable vehicle,” he said.

But there’s no denying the two cars have a skinny standard equipment list when it comes to safety. Apart from the lack of stability control, side and side-curtain airbags, which protect occupants from a side-impact crash, are not available on either cars.

The J3 will have six airbags and stability control.

The new brand has a network of 45 dealers in all states except Victoria. It has signed 15 dealers in Victoria but they were put on hold when the Victorian government refused to give Chery an exemption from the stability control mandate.

“That cost 115 jobs and $10 million worth of investment in Victoria,” Cotterill said.

Chery importer Ateco Automotive has modest initial expectations for the brand, with sales expected to total between 150 and 200 a month.

“With only two models and a small number of dealers, we think it will be a fairly steady start,” Cotterill said.

The J1 is a 1.3-litre five-door hatchback, available only as a manual. Standard equipment includes airconditioning, alloy wheels, power windows and an MP3 compatible stereo.

The J11 is powered by a 2.0-litre petrol engine and comes in either manual or automatic guises, with leather seats, airconditioning and alloy wheels.

To allay any customer misgivings about quality, Chery is backing the cars with 24-hour roadside assistance on top of the usual three-year 100,000 kilometre warranty.

The Chinese car industry is expanding at breakneck speed, with sales up by a third last year to 18.06 million units – roughly 18 times the size of the Australian market and more than the US and Japanese markets combined.

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Filed under: Australia, Automotive, Beijing Consensus, Charm Offensive, Chinese Model, Economics, Greater China, Influence, International Relations, Nationalism, Soft Power, Strategy, Technology, The Age, The Chinese Identity, The construction of Chinese and Non-Chinese identities, Transport

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