Neville Crichton: China is on the march

Chinese cars are headed for serious showroom success in Australia despite a slow start and stumbles and fumbles by brands including Great Wall, Geely and Chery.

As LDV picks up pace with its large SUVs, utes and vans, and MG gets going with small SUVs, Ateco Group founder Neville Crichton is bullish about the future of his company as the country’s biggest Chinese vehicle importer.

“They will be a force. Absolutely. The product is certainly good enough,” Crichton says, speaking exclusively to motoring.com.au.

“But timing is another story.”

Crichton has hitched his business to LDV, part of the state-owned Shanghai Automotive Industry Corporation (SAIC) that is China’s largest automotive conglomerate, after a falling out with Great Wall.

Sales are already topping 500 vehicles a month, but he has much bigger plans and is aiming for at least 1000 in the medium term.

Crichton is also working on an idea to combine the forces of LDV and MG (which is also one of the SAIC brands) although he has yet to win support from MG in Australia.

“SAIC is firmly committed to its strategy in Australia, with both MG Motor and LDV performing well as independent brands,” says general manager of MG Motor Australia, Peter Cao.

Even so, Crichton is bullish about the upside for Chinese cars.

“I think if the cars are a good product then people will accept it. I think we have to convince them. We won’t bring in a car if it’s less than five-star safety.”

But he also knows it is not going to be easy.

“Chinese cars are no longer cheap. So, they have got to build to the same quality as the others. I don’t think the price disparity or the difference between vehicles built in Japan or Thailand or China is that great.”

Ateco is Australia’s most successful independent importer with a history that includes start-ups from Japan and Korea, as well as mainstream makers from Europe.

It was an early mover with Mazda and Suzuki, brought Kia to prominence, flopped with Chery and has flagged everything from Audi and Citroen to Ferrari and Maserati.

Its latest project is the RAM pick-up business that was established as a joint-venture with Walkinshaw Australia, although Ateco is now the sole owner of American Special Vehicles and the right-hand drive re-manufacturing business that is about to launch the slightly-less-huge 1500 range.

But Crichton and Ateco are about volume and that is what has taken him to China.

The story actually starts with the collapse of his relationship with Kia, which in turn had its roots in the time when he was the Suzuki importer for NSW, with the best market share in Australia.

“I started negotiating with Kia about the year 2000. I turned Daewoo down because I didn’t think it had a future. I think I was wrong,” he says.

“We acquired the franchise and I was so convinced that Kia was going to be a success that I sold Suzuki back to them.”

But it wasn’t easy.

“I think we lost $20 million before we made a cracker. But I was convinced it was a goer.

“We had that for five years. The business was flying, we got it up to over 2000 units a month and we were closing the gap on Hyundai very quickly.”

Ateco had to steer Kia through the disastrous engine failures in the Carnival people-mover, something which would later play out in a same-but-different asbestos scenario with Great Wall.

“It was a disaster,” Crichton says bluntly.

“In some of the Carnivals we replaced the engines three times. We had container loads of engines going back. At one stage I had 400 loan cars to keep everyone happy.”

And then it ended, something that still makes Crichton angry.

“We were the biggest non-factory importer in the world. We got a fax through the general office fax machine to say they were not renewing. Not even a phone call, not even a visit.

“It came as a massive shock to us. We did our best to try and retain the franchise, but it was impossible.

“Interestingly, after they took over they halved the business. I think they lost just on $100 million over three years, running the business themselves.”

But the Kia collapse led to China.

“The day we lost that we knew we had to get the only volume franchise available out of China. Funny enough, one of the first we visited was SAIC [which has LDV] but they weren’t ready for right-hand drive. We felt they were the logical one to get into bed with.

“We ended up acquiring Great Wall and built that up to over 12,000 units a year.

“The currency went against them a little bit, and then of course the discovery of asbestos in their cars — which Great Wall went to great length to deny. If they’d had their way they would have let us hang out to dry. That was the beginning of the end to dealing with them.

“They gave us good support to fix the problem, but it was massively expensive. I think the relationship soured over that, from both sides.

“They have now been going six years on their own, spent a fortune and failed. I hate to think what it’s cost.”

But, as always, Crichton had a fall-back plan for Ateco.

“We’d been speaking still to LDV and BYD … several [other] companies in China. LDV were planning their right-hand drive attack and we ended up doing business with them. Their product is fantastic.”

Crichton says the key is the T60 ute and the company’s vans, with future plans that include a small SUV, a car-based van and a small ute.

And he is looking at the possibility of bringing MG, also part of the SAIC stable, under the Ateco umbrella.

“We don’t want to have just a small Chinese car by itself. There is absolutely zero profit in them. It’s got to be an add-on to what we’re doing now,” Crichton says.

“It’s a matter of getting the dealer network confident in the Chinese product. I think what we’ve done with LDV has put confidence back in the company.”

Anyone who knows Crichton knows he does what he says: from re-energising Maserati; to establishing a foothold in South Africa; continuing his retail operations in his New Zealand homeland; then upgrading his European-based superyacht and moving into a new home where his neighbour (“Yes, truly, right next door”) is prime minister Malcolm Turnbull.

Crichton is now 73, has plenty of money and lots of toys, but he still gets the biggest buzz from business. He often hints about retirement but is poor on the follow-up.

“I am going to retire. I just didn’t tell you when. The day before I die,” he snaps, with a hint of a smile.

“I’d like to be up doing volume vehicles and we’re getting that way with LDV.

“While I’m in business I’ve got to keep going. You’ve either got to keep going forward, or else go backwards and die.

“I’m not looking for a buyer for the business, but I’m not looking for a buyer for my shoes, either. But if someone offers me enough money then I’ll go home barefoot,” Crichton quips.