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A flood of cheap Chinese cars is coming to Australia — and they want to overtake Toyota

Joshua Dowling

AS far as big calls go, this is the biggest in the Australian automotive industry since the boss of Holden said it would overtake Toyota by 2020.

That Holden boss has since left the building, and Toyota is currently selling twice as many vehicles as Holden, but now there is a new challenger for top bragging spot.

China’s biggest selling SUV brand, Haval, is heading to Australia in June — and it reckons it can overtake Toyota, which has been number one in SUV sales for more than three decades.

“Haval is the Number 1 SUV brand in China, and we have the confidence that, over time, it can grow up to be the number one SUV brand (in Australia),” Haval CEO Wang Fengying told Australian journalists at the Shanghai motor show.

“It will take time to achieve the goal, but the goal has been set,” Madam Wang said via a translator.

Big in the city ... Haval H2 due to start from the low $20,000 bracket. Photo: Supplied.

Big in the city … Haval H2 due to start from the low $20,000 bracket. Photo: Supplied Source: Supplied

There are already at least seven Chinese automotive brands on sale in Australia but they have so far failed to win local buyers in significant numbers.

At their peak in 2012, more than 12,000 Chinese cars were sold locally.

But sales have been in free-fall since then — of the 1.1 million new vehicles sold in Australia last year, just 4200 were from China.

The reputation of Chinese cars was damaged after Haval’s sister brand, Great Wall Motors, had to recall more than 21,000 vehicles in Australia in 2012 because some internal engine components contained asbestos, a banned substance which can cause lung cancer.

Earlier examples of Great Wall Motors vehicles have also earned poor safety scoresin Australia.

“We know the customer will have some doubt (about) our product, but after they experience our product, we believe that the volume will build and we can have a sales star in the market,” said Madam Wang.

Road ahead ... Madam Wang says Haval has learned from past mistakes. Photo: Supplied.

Road ahead … Madam Wang says Haval has learned from past mistakes. Photo: Supplied. Source: Supplied

Haval plans to introduce three different SUV models in June, priced from about $20,000 for a city-sized soft-roader (about $5000 less than rivals) to about $45,000 for a heavy-duty seven-seat four-wheel-drive, undercutting the Toyota Prado by $15,000.

However, Haval’s bold plan may get off to a stalled start.

Haval is yet to appoint a single dealer in Australia and it has about 200 cars on the water, yet none have been officially approved for sale by the Federal Government.

Haval’s Australian chief Tim Smith, formerly of Kia Motors Australia, says the approval to import its initial batch of three new model varieties is a “formality”.

Lights, cameras, action ... Haval is China’s top-selling SUV brand. Photo: Supplied.

Lights, cameras, action … Haval is China’s top-selling SUV brand. Photo: Supplied. Source: Supplied

By the end of 2013, Haval sold 1 million SUVs worldwide and the company says it is on track to pass the 2 million mark by the end of this year.

In Australia SUVs are the second-biggest vehicle category behind small cars and sales are up by more than 15 per cent so far this year in a market that has grown by 4 per cent.

Other Chinese brands are poised to follow Haval into Australia, but industry analysts say plans to head straight to the top of the sales charts are “highly ambitious”.

“History suggests their expectations are far too high,” says Richard Johns, an economist and market analyst from Australian Automotive Intelligence.

“Australia is a very competitive market, most of the world’s brands are here. The Chinese will have to be very patient if they want to be a significant player in this market. No car company from anywhere in the world can walk into the Australian market and think they are going to be an instant success.”

Starting again ... Haval H8 was withdrawn from sale twice but is fixed now. Photo: Suppli

Starting again … Haval H8 was withdrawn from sale twice but is fixed now. Photo: Supplied. Source: Supplied

One of the vehicles due to arrive in Australia, the H8, a Toyota Kluger-sized SUV, was controversially withdrawn from sale by Haval in China — twice — soon after its launch in late 2013. But the company insists the necessary improvements have since been made and the vehicle is now export quality.

Alysha Webb, former bureau chief for Automotive News China and now an industry consultant, says Haval’s plans to become the top seller in SUVs globally should not be underestimated.

“I think they have a shot, they’re a very flexible company, a very forward looking company,” Webb told News Corp Australia.

“When Haval stopped selling the H8 because they didn’t get the quality right, that was a big call. Although it looked bad, that showed they were willing to take the hit to put out a good product.”