New cars for under $5000
Australians could be buying Chinese or Indian cars for the price of personal computers by the end of the decade, as the first Chinese Volkswagens make their way to Australia.
The Volkswagen Polo Classic sedan will cost Australian consumers $23,990, in what is thought to be the first test for Chinese cars in any Western market. While the German company said it had focused on quality and brand maintenance for this first batch from China, a Chinese car costing $US4200 ($5456) and an Indian car for about half that price may not be far behind.Paul Blokland, director of Segment Y Automotive Intelligence, an automotive consultancy in Mumbai, said Chinese cars would be common in the Australian market within a decade. "It took the Japanese 30 years to establish themselves in Western markets. The Koreans did that in about 15. The Chinese will probably achieve it in seven or eight, or less."
A Chinese joint-venture company has just dropped local prices for its Daihatsu Charade to $US4200, after a huge increase in Chinese production last year outstripped demand.
The Tata Group, India's largest manufacturing company, is months away from releasing the prototype for the $US2200 "people's car". The company has fired robots and hired low-wage labourers to turn modern production processes on their head, and wants the mini-priced vehicle to be an export model for the developing world.
Volkswagen, which made 660,000 of more than 4 million Chinese cars last year, is monitoring Australia's response to the Polo Classic so it can adjust specifications and prices in later orders. "There's a few dozen in the country now but we will freight a darn sight more than that," said Matthew Wiesner, its dealer development manager in Australia. "It gives the Chinese an opportunity to say they can produce and deliver for a Western market."
A spokesman for China's embassy in Canberra said it was seen as the first time that Chinese cars had entered a Western market.
Two recent deals by American companies should soon see hundreds of thousands of cheaper Chinese cars on American roads.
New York company Visionary Vehicles LLC has signed a deal with Chery Automobile Co, which it says will lead to 250,000 cars being sold in the US by the end of 2007. The company's founder, Malcolm Bricklin, who introduced Subaru to American buyers in 1968, said the Chery cars should sell for 30 per cent less than equivalent models in the market.
American company China Motor has signed agreements with three Chinese car makers and plans to sell compact sedans and utes from $US9000. Detroit-based companies are fighting the move, saying some of the Chinese companies have stolen their designs and ripped off their brands.