December 9, 2022

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China’s Chery aims for Top Five in Australia in five years, first car due this year

5 min read

Seven years after it left Australia in the wake of an asbestos recall, Chinese brand Chery is set to return late this year with a new small SUV – and a bold plan to be a Top Five contender within five years.

Chinese car brand Chery has announced an ambitious plan to be among Australia’s Top Five selling brands – and sell in excess of 70,000 cars per year – within five years, after it returns to showrooms from this November.

Senior executives for the Chinese company outlined their bold prediction during an online briefing with Australian media late this afternoon.

Chery’s first bite at the Australian new-car market came in 2011, with three models including Australia’s cheapest car – but withdrew four years later following a mix of dwindling sales, poor safety ratings, and an asbestos recall.

Seven years on, the Chinese brand is preparing to return to Australia this October or November with a wave of new models, and a bold sales target to deliver in excess of 70,000 cars annually from 2027 – and become a Top Five player in the market.

If Chery reaches its sales target in such a short timeframe, it would be the fastest ramp-up of a new automotive brand in Australia’s automotive history.

A Top Five placing would see Chery competing alongside established automotive companies such as Mazda, Hyundai, Kia, Ford and Mitsubishi.

To date, no Chinese car brand has placed higher than seventh in Australian new-car sales – with MG reporting almost 40,000 cars as sold last year, compared to third-placed Hyundai’s tally of 72,000, second-placed Mazda’s total of 100,000 and market leader Toyota’s figure of 220,000.

Chery’s previous entry in Australia included the country’s cheapest new car – but Chery says this won’t happen again, as it is determined not to be a “Chinese brand that is cheap”.

“Chery is very different from what we used to be – what we were a long time ago,” the boss of Chery’s International export division, Charlie Zhang, told Australian media in an online briefing today.

“The product, the quality, the design, the technology – as you can see from Omoda 5 [Chery’s first new model in Australia] – has been completely changed.

“That is why will not be a labeled as a Chinese brand that [has] cheap pricing. It is not price-driven. We want to be a technology-driven company.

“MG and Great Wall have been selling a great number of cars in Australia. We will definitely catch up, because what they have, we will have – and we will have more, and better,” the executive added.

Chery’s first model in its Australian relaunch will be the Omoda 5, a small SUV which the Chinese car maker says targets rivals it believes to be among the “global benchmarks”, the Mazda CX-30, Toyota C-HR and Hyundai Kona.

Chery claims the Omoda 5 – and its new models that follow – have been engineered for “five-star safety ratings” – a departure from the two- and three-star safety scores applied to its last models in Australia.

The Chinese car maker will primarily sell its vehicles through a mix of traditional franchised dealerships – referred to as “subsidiary companies”, by executives – though Chery says it will also “try” other sales channels, including online sales.

“We will be there with our subsidiary companies [franchised dealerships], just like what MG and Great Wall are doing,” Zhang told media.

“Obviously we will have the conventional distribution channels like dealerships, but on the other hand, we want to be an innovation-driven company. So probably there are going to be some new retail business models, like online sales.

“We would like to try new things, but … at the very beginning, we will depend on the conventional dealerships to sell the cars.”

It is unclear if prices will be negotiable, or a fixed-price sales model will be adopted, similar to Honda and Mercedes-Benz.

Chery claims the Omoda 5 small SUV will be followed by a larger Mazda CX-5-sized Tiggo 7 Pro SUV (further up, in red) in the first half of 2023 – with an even-larger Tiggo 8 Pro (above), as well as a ute, due to follow in the coming years.

“There will be a range of new products for right-hand-drive markets – particularly on our T2x [SUV] product platform, but also the electric cars in the future. So there will be a range of products for the Australian market,” Zhang said.

While the Omoda 5 will launch in Australia with a pair of petrol engines, Chery executives say a battery-electric version will be introduced by the end of next year, claimed to be “much better” than an MG ZS EV.

The company would confirm if the electric Omoda 5 would be Australia’s cheapest electric car – at around $45,000 drive-away – however it said it aims to “offer value to the customers”, and be “competitive”.

Further down the track will be a ute, which internal documents seen by Drive suggests is due in the second half of next year, codenamed ‘J Series’.

“We are also working on the feasibility study of developing the because because the pick-up market in Australia is something very, very important. I believe that in the next years, we will develop a pick-up,” Zhang said.

While Chery’s last stint in Australia lasted only four years, the company claims it is committed to Australia for the long haul.

“We will act to make an impact in Australia, because we want to be significant,” Zhang told Australian media.

“We want to be a significant player in Australia – we are very, very confident about the outlook, given what I explained. We also want to make a difference – we want to be innovation driven, we want to introduce the [latest] technologies, including PHEVs [plug-in hybrids] and electric cars in the future.”

The first examples of the 2023 Chery Omoda 5 are slated to go on sale in late October 2022, or sometime in November – assuming no further delays due to homologating its models for sale, or establishing its dealer network.

While Chery did provide significant detail on its new model roll-out and future sales projections, there were some questions from the media the company did not acknowledge or answer.

Drive was asked to provide an outline of questions ahead of the media briefing. Some of the questions which Chery executives did not address or answer were:

  • Why has Chery chosen now to return to Australia, and not some years ago?
  • Does Chery believe its image was damaged by the asbestos recall in Australia in 2012?
  • Why is Chery selling cars in Australia via a subsidiary, rather than an independent distributor?
  • What is unique about Chery in a market of more than 60 brands?

Alex Misoyannis

Alex Misoyannis has been writing about cars since 2017, when he started his own website, Redline. He contributed for Drive in 2018, before joining CarAdvice in 2019, becoming a regular contributing journalist within the news team in 2020.

Cars have played a central role throughout Alex’s life, from flicking through car magazines as a young age, to growing up around performance vehicles in a car-loving family.

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