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Chery prices could fall below $9990

The importer of Chinese brand Chery says its next generation of small cars could be even cheaper than its current crop – despite the Chery J1 already retailing as the cheapest car on the Australian market.

chery-j1

Ateco Automotive's general manager of new ventures, Dinesh Chinappa, says the local importer is currently discussing the potential for the J1 sub-light hatch's replacement.

“There is a J1 replacement currently being talked about with us,” Chinappa said.

“The first round indicative pricing is … interesting.

“I think it’s possible that just the pure competitive pressure and pursuit of volume in China and coming out of India and other places, you could see a further reduction in pricing."

Chinappa cites being able to “subsidise [profit] share across dry volume” as one of the reasons Chery may be able to reduce its pricing structure for importers like Ateco, but cautions that the next J1 hasn’t yet been signed off for Australia, adding that “I’m not certain the Australian consumer want that 1.0-litre size car”.

In 2012, Chery sold 378 units of J1 hatchback, reducing the price to $9990 driveaway earlier this year.

Meanwhile an automatic transmission and electronic stability control will be offered in the J3 small hatchback later this year, with ESC to follow in a facelifted J11 compact SUV.

A J3 replacement is currently being surveyed, with Chinappa confirming that Ateco is “very interested in that car”.

The addition of stability control will allow Chery to sell their cars in the state of Victoria, which in 2011 banned new cars without ESC from being sold, ahead of the national schedule.

The “new ventures” boss wasn’t afraid of making his position clear on Victorian legislation stepping out of time with federal legislation.

“The ESC issue in Victoria … is a little bit silly.

“They rushed it. The world hadn’t done it [implemented mandatory stability control]. But Victoria decided to go off on a frolick…”

“From a global manufacturing perspective, to have a little market like Victoria jump off a year and a half early [before Australia-wide mandatory stability control is enforced], where’s the logic in that?”

Chinappa refutes the suggestion that a Chinese-developed stability control system may not be to Japanese or European standards, saying that Chery outsources its stability control to other companies, including Bosch in Melbourne.

Ateco will set up a small number of dealerships “only in metro areas” of Victoria when the J3 and J11 are upgraded with stability control. National volume, however, remains modest, with 1500-2000 sales forecast this year – up from 1133 units in 2012.