When in 2008, Chinese state-owned car giant Chery made its first attempt to grow its brands in the South African market, it did not succeed.
It had previously been forced to exit the market in 2018 when customers complained about the quality of the cars and poor after-sales support.
Chery appears to have learned from its mistakes and in November last year re-entered the South African automotive industry, starting with its smallest SUV, the Tiggo Pro 4, with further models following. An effort was also put into ensuring Chery service centres receive the support from the OEM that is needed to serve Chery drivers better.
By July, when it started providing monthly sales figures to the National Automobile Association of Manufacturers South Africa (Naamsa), Chery cars outsold more established brands such as Mercedes-Benz, BMW, and Stellantis, which comprises the Alfa Romeo, Citroën, Fiat, Jeep, Opel and Peugeot brands.
Haval, owned by China’s Great Wall Motors, is another Chinese brand selling a growing number of units.
Observers said the Chinese vehicles were now of improved quality and came at slightly lower prices than similar car ranges made by Western car manufacturers.
This stands in contrast to Chery’s previous experience, when it was forced to exit the market after 10 years due to dwindling sales, with many customers complaining that the cars were wearing out easily and they could not get places for parts and servicing.
Chery’s smallest SUV is their bestselling vehicle, with 689 models sold in July; the Tiggo 7 Pro with 372; and the flagship 8 Pro with 201 units.
In contrast, Mercedes-Benz sold 679 passenger cars in July and it was a similar picture last month with Chery selling 1,320 new vehicles in total, making it one of the best-selling car brands in South Africa, compared with 999 for Mercedes-Benz.
However, Mercedes-Benz exports most of its vehicles to other global markets as it concentrates on premium marques that might be out of reach for many South Africans.
Unlike 2008 when it entered South Africa for the first time, and models were distributed by a dealer group. Chery says it is backing the dealers in terms of Chery service and maintenance with a large parts warehouse, a strong mechanical warranty and service plan, and a 24-hour roadside assistance service.
“This means that the total sales figure is a perfect representation of Chery’s acceptance by South African motorists,” said Jay Botes, national sales manager of Chery South Africa.
“We realise that South Africans are under significant economic pressure and that they need the best possible value for money when buying a vehicle.”
Chery says it has 60 dealers and service centres and plans to add more, including expanding to neighbouring countries in Africa.
For its re-entry, Chery poached employees from rival Chinese company Haval, including executive deputy general manager Tony Liu.
Last year, as it re-entered the market, Liu said there had been dramatic improvements in the quality of the cars as the company had “reinvented itself as a technology and design leader and the benchmark for customer service”.
Meanwhile, Haval is selling a growing number of units for its H model range and the more popular Jolion compact SUV.
In July, Haval sold 858 new vehicles, which included 229 H6s, six high-end H9 cars and 622 Jolions. In August, the Chinese carmaker sold 1,219 new models, 477 H6 models, four H9 units and 738 Jolion vehicles to customers in South Africa.
In contrast, BMW sold 1,064 units in August, which was a drop from 1,512 units in July. Stellantis brands together sold 730 units in August, a drop from 904 units in July.
But the Chinese brands still have a long way to catch up with mid-range offerings from other major manufacturers such as Toyota, which sold more than 11,100 units in August.
Ernest Page, retired stunt driver and motoring analyst, told the CapeTalk radio station: “The big reason for this [booming sales] is that South Africans are strapped for cash … What the Chinese have done … is offer incredible value.
“Most of them are becoming very, very safe – as safe as some of the entry-level European cars.”
He said Chery had a 1 million-kilometre guarantee that assured buyers the car was going to last.
Walt Madeira, the principal analyst for Europe, the Middle East and Africa at S&P Global Automotive, said: “I believe that the key to this success has been launching high-quality SUVs with a very competitive pricing strategy at the best time.”
He said South Africans had always required robust vehicles such as pickups and off-road SUVs to tackle the demanding landscape.
Madeira said many consumers were choosing to drive compact SUVs and some carmakers had been quicker than others to identify this trend. The sweet spot for these compact SUVs was in the range of R275,000 to R400,000 – a range that suited the Chinese firms perfectly.
For example, the Chery Tiggo 4 starts at R299,900 and Haval’s Jolion starts at R342,950, less than the domestically built Toyota Corolla Cross at R360,400. “These two vehicles are top sellers and provide great value for money,” Madeira said.
Further, Madeira said many Western carmakers had slimmed their vehicle line-ups in South Africa, leaving space for newcomer Chinese car brands to fill.
“The success of Chery and Haval will allow for other Chinese carmakers to enter South Africa with confidence,” Madeira said. Other Chinese carmakers in South Africa include BAIC, JAC Motors and JMC.
Meanwhile, the premium car makers Mercedes and BMW, “have decided to focus on the high-income buyer and company fleets”.
“The entry-level vehicle at Mercedes is the A-Class at R635,500, so it would not be fair to compare this automaker with others that have products at a lower pricing point,” Madeira said.
He said Chinese carmakers had partnered with big vehicle showroom groups in many African countries such as Nigeria, Angola and Kenya and had been gaining market share and improving their branding on the continent.
“I expect this sales trend to continue in the future,” Madeira added.
.
.
.
.
Article sourced from https://www.scmp.com/news/china/
Comments
Post a Comment