Chery slashes prices

Chinese car maker Chery has announced its entry-level J1 small car will be priced from under $10,000 driveaway, retaining its title of Australia's most affordable car and becoming the first new car to be offered under $10k in more than a decade.

Now priced at $9990 driveaway, the J1 undercuts the Indian-made Suzuki Alto sub-light car by $2000. However the Chery J1 light car (or any Chery vehicle) cannot be sold in Australia's second most populous state, Victoria, because of stringent electronic stability control laws that apply to most new vehicles.

Victorian law states that passenger vehicles can only be sold if they have electronic stability control.

Daniel Cotterill, a representative from Chery’s Australian distributor, Ateco Automotive, said the introduction of stability control on the Corolla-sized J3 small car will happen in 2013.

"We expect to have stability control on the J3 in the second quarter this year," said Mr Cotterill.

The J3 has also had a price cut from $14,990 to $12,990 driveaway, and when the stability control equipped models arrive mid year an automatic J3 will also be on the cards.

"I think you'll see the availability of an automatic transmission and as you know ESC is not a bolt on accessory - it has to be integrated with engine management and whatever transmission you have. So that's been part of the reason for the delay, getting that sorted out."

The arrival of the J3 with stability control will also kick start Chery's Victorian sales push and the J11 ($17,990) compact SUV will be the second vehicle to get stability control.

The entry-level J1 is no certainty for the life-saving technology however.

"I'd be quite certain about J11 [getting stability control]. The J1 I'm not entirely certain about," stated Mr Cotterill.

The local importer is cognisant of sluggish sales for the brand in 2012, which dropped by almost 40 per cent compared to the previous year's sales - 1133 units compared to 1822 in 2011.

Mr Cotterill said the Victorian sales of Chery vehicles will help the company's bottom line: "Not being able to sell the cars down there has clearly been a disadvantage for us so it'll be good to get our Victorian dealer network sorted and open."

"These price cuts we're discussing are best seen as a signal of the determination of both Chery and Ateco that the brand will ultimately gain a successful foothold in this country."

The controversial use of asbestos in gaskets of Chinese-built Chery and Great Wall vehicles sold in Australia - including the J3 - hurt the brand's reputation in 2012, though Mr Cotterill says the issue was exaggerated.

"Look it certainly can't have helped but in the particular case of Chery it involved so few gaskets and so few cars that I honestly don’t think it had any meaningful impact.

"I remind you though, and it's not just us saying this, the officials agree with us -- those gaskets held no health threat to anyone. Mechanics, drivers, passengers, no one."

As Chery attempts to build a permanent foundation in Australia by cutting prices, the company is also planning to add more models in the future, though what these new products will be remains to be seen. An affordable $20,000 electric car was mooted by Ateco for late 2011 but has failed to materialise.

"Our priority for 2013 is to consolidate and improve on what we have and with sales results not as high as we'd have liked, we'd like to fix that and then expand our model range as and when we're able to."

2013 Chery price list:
J1 - $9990
J3 - $12,990
J11 - $17,990 ($19,990 auto)