First Australia then the world

Look out Land Rover, Jeep and Toyota; Chinese brand Haval is set on global SUV domination

DAMION SMY

CHINA’S most popular SUV brand, Haval, hits Australia in June with a lofty ambition: it wants to be number one in SUVs. In Australia, and globally.

Australia, along with SUVdominated markets Russia and Chile, have been confirmed as Haval’s first export destinations.

And it’s not coming Down Under just to make up the numbers.

“We’ve studied the Australian market, and we know it’s a one million unit business and SUVs make up 300,000 per year,” Great Wall CEO Wang Fengying told Australian media at the Shanghai motor show. “That makes it a very good SUV market for us.”

To reach the top in Australia Haval will not only have to knock off established SUV brands like Mazda, Nissan, Ford and Holden, it will have to outsell current champion, Toyota, whose fivestrong SUV lineup attracted 56,660 sales in 2014.

That volume alone would have been good enough for eighth on the 2014 new vehicle sales chart, ahead of VW, Subaru and Honda.

In Australia last year SUV sales rose 5.6 percent in a overall market that fell two percent.

SUVs accounted for almost onein- three new vehicle sales, and, if current growth rates continue, are projected to outsell the passenger car market as a whole in 2017.

Haval, a subsidiary of Great Wall Motors, may be unknown in Australia, but it has been the leading SUV maker in China for more than a decade. It’s bestselling Mazda CX-3-sized H2 SUV outsells the VW Tiguan, Toyota RAV4 and Honda HR-V.

Ms Wang said that as the Chinese industry matures domestically, carmakers like Great Wall and Haval are turning to foreign markets for expansion.

However, it has been a less than auspicious start: Chinese automotive exports fell 10.6 percent in 2014.

Nevertheless, the CEO is resolute in her goal of Haval becoming the SUV sales leader, not just in Australia but globally.

“Haval is the number one SUV brand in China, and we have the confidence that, over time, it can grow to be the number one SUV brand [globally].”

Haval’s Australian marketing boss Tim Smith admits that’s no easy goal, and achieving it will mean beating established opposition.

“From the chairman right down, we see Jaguar Land Rover in particular and Jeep [as rivals],” he told Wheels. “We need to aim high. I think it’s important to know that we want to be aiming at those two brands and hopefully one day supersede them. We need to know what they do well and what they don’t do so well, and be able to capitalise using our own strengths that both Chinese manufacturing and this company can leverage.

As the Chinese industry matures domestically, it’s now looking to foreign markets for expansion

THE framework and production capacity are almost in place to launch the Haval and Great Wall brands to the world, says CEO Wang Fengying. Great Wall’s newest plant, Xushui, 170km south-west of Beijing, has the capacity to produce 2738 cars per day. That’s knocking on the door of the world’s largest car factory, VW’s Wolfsburg plant in Germany, which can build 3000 cars a day. Great Wall also has factories in Thailand and Bulgaria, and is increasing its R&D footprint at its Baoding HQ.

The capacity to expand

Haval will kick off its Aussie assault with two models, the H2 compact SUV and the Jeep Cherokee-rivalling H9 off-roader.

Both SUVs will be keenly priced, even though Haval considers itself a premium SUV maker, not a cut-price Chinese brand like Great Wall. It’s a two-tiered sales structure not dissimilar to Lexus and Toyota, though the task of convincing Australians that China can do premium is considerable.

Australian sales of Chinese cars have failed to fire in the six years since Haval’s parent Great Wall became the first Chinese brand on sale here in 2009. A poor reputation for fit and finish and low safety levels of those early cars tarnished the Chinese industry’s image locally.

Great Wall suffered two other early blows, the first a two-star ANCAP rating for the V240 and S220 dual-cab utes, then a further setback when its entire range was

Haval’s Australian showroom

HAVAL H2 Rivals: Mazda CX-3, Honda HR-V, Nissan Juke

JUNE 2015

EXPECTED to be the best-seller in Oz, the 4.33m-long H2 sits between Mazda’s CX-3 and CX-5 SUV for size. Priced around $24K, the H2 is powered by a 110kW 1.5-litre turbo four-cylinder petrol engine. Sophisticated no-cost option customisation that includes two-tone includes two-tone colour combos will be a key selling point, as will an independent rear end. A reversing camera will be standard.

HAVAL H6 COUPE Rivals: Hyundai ix35, Toyota RAV4, Nissan X-Trail

Q1 2016

REVEALED at the 2015 Shanghai show, this spacious model will be offered with a 2.0-litre turbo four mated to a six-speed ZF dual-clutch transmission and a choice of two- and all-wheel-drive. Haval says the H6 has Range Rover Evoque-esque styling and colour options, and will carry a bas and will carry a bas price around $35K.

Despite the name, it’s not a two-door coupe, so may simply be called ‘H6’ here.

HAVAL H7 Rivals: Mitsubishi Outlander PHEV; Lexus NX300h

Q3 2016

NOT yet confirmed for Australia, the H7 is likely to be offered here in hybrid form only. The powertrain consists of a 2.0-litre turbo-petrol engine mated to an electric motor and fed by a 12.44kWh lithium-ion battery pack. Its combined power output is 263kW and it’s capable of travelling 58km the electric motor alone.

Safety gear includes adaptive cruise, auto emergency braking and brake assist.

recalled after engines were found to contain asbestos, a substance banned in Australia since 2003.

Subsequent recalls have only added to Great Wall’s image problem, as has a spat with local distributor Ateco (see sidebar).

Haval itself has faced problems domestically, recalling its H8 after numerous problems last year and even pulling it from sale for a number of months.

Independent industry analyst Alysha Webb, managing partner at China-focused consulting firm Cross Pacific Partner, maintains that Great Wall has the right approach to succeed in a market as competitive and dynamic as ours. “I’ve been impressed with Great Wall since I visited the company in 2004,” she told Wheels. “Even then it had an open mind about bringing in people from outside China to improve the quality of its vehicles. Its decision to stop selling the Haval H8 until it could get it right, so nce ve mage idebar). d bl to speak, was impressive and the right thing to do.”

China produced almost 20 million cars in 2014, and its production sophistication and expertise is improving rapidly.

Even so, winning back a sceptical Australian public after a poor first impression is a tall order. But Haval has a plan, says Smith.

“The entire range will all have five-star ANCAP ratings,” he promises of the yet-to-be-tested range. “We want to be a premium SUV brand [so] we’ve got to focus on the product. We should be proud of where these cars come from. Winning the hearts and minds of people will be just as important as selling cars and getting people to consider [us].”

It once seemed inevitable that China would follow the same path to success as the Japanese and Koreans. While the Chinese automotive industry seems to have lost some of its early export momentum, Haval is keen to regain that lost ground. And more.

“ Winning people’s hearts and minds will be just as important as selling cars and getting them to consider us” – Tim Smith, Haval Australia

HAVAL H8 Rivals: Nissan Pathfi nder, Land Rover Discovery Sport

JULY 2015

A SPACIOUS five-seater with a huge 2915mm wheelbase, the $40K H8 is Haval’s rival to the likes of the Nissan Pathfinder. It is powered by a 160kW 2.0-litre turbo-petrol engine with direct injection, and will be available in frontwheel drive or on-demand electronic all-wheel electronic all-wheel drive. Safety suite includes blind-spot indicators, lane assist and xenon headlights.

HAVAL H9 Rivals: Toyota Prado, Nissan Patrol, Mitsubishi Pajero

JUNE 2015

THE biggest Haval is the H9, a $50K ‘proper’ off-roader with seven seats.

It’s built on Haval’s only ladder-chassis platform and comes with high- and lowrange four-wheel drive. At launch in June it will be powered by the same modest 2.0-litre four as the H8, packaged to take advantage of Chinese capacity advantage of Chinese capacity taxation. Haval hopes to offer a 3.0-litre turbocharged six-cylinder and a 2.0-litre turbo-diesel in Australia down the track. ffer

Great Wall’s great fall

19 SELLING utes in Australia is like shooting fish in a barrel, surely, but it’s just not firing for Great Wall.

Importer Ateco, which began selling the Great Wall utility range here in 2009, was making headway with consumers and exceeding sales expectations until it fell out with the factory.

At the time of writing, a stalemate exists between Ateco and Great Wall HQ. Cars are no longer being ordered from China. With no supply, sales have slumped accordingly.

Whether or not it was the original plan, Haval will be a standalone company here, with its own distribution and dealer network of between 10 and 20 sites trading starts in June.

“We are building the Haval network, but we’re also discussing with Ateco to have guaranteed service for our Great Wall customers,” Haval CEO Wang Fengying said. “We want our customers to have confidence in the car and service provided from the Great Wall factory. Ateco has its own shop, and we’re willing to work with them.”

Ateco declined to comment for this article, citing legal reasons.