Great fall of China car sales

Chinese cars were tipped to dominate the budget-car class and challenge established brands in half the time it took Japanese and South Korean companies - but the bubble has burst before it's properly inflated. After some early success since becoming the first Chinese brand to go on sale in Australia, Great Wall Motors has hit reverse and its Chinese peers are struggling to get into first gear.

Official figures for the first five months of the year show Great Wall Motors deliveries are down by 35 per cent compared with the same period the previous year in a record market that is up by 4.5 per cent.

Other Chinese brands such as Foton have also had a stalled start. After announcing big plans two years ago Foton has sold fewer than 300 pick-ups in that time.

Budget brand Geely has still restricted its sales to Western Australia and Chery's small cars have been stymied by newer competition from established brands. Chery sales are also down by 35 per cent.

The Chery J1 hatchback was the cheapest car in Australia in almost two decades when it went on sale with a $9990 drive-away price in 2011, and is now available with a "pay half now, half later'' deal.

But it too has failed to rock the sales charts. ''Sales have slowed for now but they will recover,'' says Daniel Cotterill, the spokesman for Ateco, distributor of Great Wall Motors and Chery passenger cars and the Foton truck range.''It's been frustrating for us and the dealers to not have more new models available to us as quickly as we would like."

'The other challenge for Chinese car brands is that mainstream marques such as Suzuki, Nissan and Volkswagen have all responded with quality cut-price contenders priced from $11,990 to $13,990 drive-away. "In some ways we are a victim of our initial success,'' said Cotterill. "Other mainstream brands have had to come down in price to compete with us.''

Other hurdles: more than 20,000 Great Wall Motors and Chery vehicles were recalled in August 2012 for having asbestos components in their engines. Chinese cars tend to earn poor to scores in crash tests (between two and four stars when the modern industry norm is five stars).

But the companies hope to have a reversal of fortunes with a number of new generation Chinese vehicles made to international standards due in local showrooms in the next two years.''There are new models in the pipeline,'' said Cotterill.''We are confident in the ability of the Chinese to respond the Australian car market and boost sales.''

This reporter is on Twitter: @JoshuaDowling