The global boss of Australia’s newest car brand GACwhich officially launched locally this week, said the Chinese automaker will not engage in a price war with rival brands and will price its models sustainably.
He told it too Daily Sparkz that Australian GAC dealers will be able to make profitable margins on their vehicles despite aggressive pricing for the cheapest of the first three models sold here, the Emzoom small SUV, which starts at just $25,590 before on-road costs.
“Our principle is to determine accurate pricing,” said Wei Haigang, president of GAC International.
“We cannot choose to set a lower price just for the sake of setting a low price, because without profits we cannot make our business sustainable.”
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While the list of new car brands from China is long, the list of those that are profitable is not long – only a handful of them, such as: BYDand generate a profit from their worldwide sales.
In Australia, some retailers have returned franchises of Chinese brands in the highly competitive market because margins were so low they couldn’t make a profit.
Chinese car brands like MG, Chery And companion have engaged in price wars, vying for the title of offering Australia’s cheapest models in certain segments – such as the lowest-priced electric vehicle (EV), which is currently the new BYD Atto 1 hatchback, priced from just $23,990 (before on-road costs).
The battle for the title of Australia’s cheapest SUV is currently a draw between the Mahindra
However, GAC was not aiming to win one of the “cheapest” competitions in Australia, Mr Wei said.
“Our operational strategy in the Australian market is precise pricing and precise positioning. We want to establish ourselves as a mid-range top brand but with very high quality and competitive prices.
“We don’t want to set a lower price, so you can see that our price comes with a relatively higher configuration or equipment.”
Aimed at younger and cost-conscious buyers, the petrol-only Emzoom is more expensive than Australia’s cheapest SUVs, but it’s also larger than them and the best-selling Hyundai Kona, and almost as big as the second most popular small SUV, the MG ZS.
Chery Australia boss Lucas Harris said Daily Sparkz Earlier this month, the brand didn’t want to get involved in price wars at the expense of resale value.
“If we’re constantly cutting and changing prices dramatically, that’s going to have a really negative impact on residual value for customers,” Mr. Harris said.
“It’s about consistency and earning the right to sell them another car.”
Suzuki Australia General Manager Michael Pachota said Daily Sparkz At the beginning of the year, the Japanese brand also wanted to price its models in line with customer expectations – and not just to undercut the competition.
And during a media briefing in Melbourne last month, Parker Shi, president of GWM International, said BYD was “too aggressive.”
“We are not waiting to engage in a price war, but is there really a price war – to buy market share faster (with price cuts),” Mr Shi said.
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