Yet another year has now passed without any Chinese vehicle manufacturer having had success as an exporter to any of the world’s major markets. That is far more to do with car buyers in China eagerly soaking up all available manufacturing capacity than any lack of ambition for foreign conquest. The majority of industry watchers should, however, avert their gazes from Europe, North America, India and Brazil and look at what is going on in an oft-overlooked rich world market, Australia.
From the viewpoint of many down under, the Australian passenger vehicle market has long been used as a test case by aspirant OEMs. Witness the arrival of the then largely obscure Hyundai brand in the sparsely populated state of Western Australia in the 1980s. After learning from early mistakes, the Korean brand looks as though it has just usurped Mazda to become the third largest player behind Toyota and General Motors Holden. It should be noted that means it is also ahead of Ford, despite the latter having local manufacturing operations.
The Great Wall Wingle pick-up has been re-engineered to take on one of Australia’s best selling vehicles, the Thai-built Toyota Hilux.
What makes Australia particularly appealing for young brands seeking major global growth is a unique set of circumstances. Driving conditions outside the main cities can be extreme, with searing temperatures or flash-floods combined with unsealed roads testing the durability of poorly engineered cars to destruction. Buyers are generally rich, well educated and very demanding – consider the 25% share of the local market now held by Toyota, much of that gained and maintained by the Hilux pick-up, a vehicle with a fearsome reputation for longevity and reliability in a country where breaking down can be fatal.
Chinese vehicle manufacturers’ lack of success outside their home market has been mostly due to poor quality vehicles that perform badly in crash tests, with amateurish marketing campaigns thrown in for good measure. Those days are now gone. Great Wall, the most successful Chinese make in the Australian market, not only re-engineered and renamed several models to make them suitable for the desires of local buyers, but it specifically targeted the Toyota Hilux. The results speak for themselves: the V240 (Wingle) pick-up on its own gave Great Wall a top-ten position in Australia’s LCV market last year.
Great Wall, already the tenth best seller of light commercials, may soon overtake Volkswagen.
This privately owned firm is merely the first such Chinese OEM to have used Australia as an advanced market experiment. Chery, Lifan and JAC are presently setting up shop in this market of 23 million consumers. Each looks likely to copy Great Wall’s package of fair-priced and well equipped products, with equally snappy advertising that highlights the vehicle’s far-off and exotic country of origin as a centre of low-cost yet good quality manufacturing.
‘The Great Ute of China’, as the Australian importer deems it, already has 2% of the Australian light commercial market and is close to overtaking Volkswagen. But as impressive as that sounds, even in a market of around one million annual sales, this is still an isolated situation. Or is it? Australia is as crowded by brands as the US and Europe, yet Great Wall has found a way to succeed. After all, modest ambitions, quiet determination and quick learning were how Toyota, Nissan, Honda and Hyundai-Kia gained their now firm footholds in the world’s rich markets.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
