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A host of Chinese vehicles are about to grace the Pakistani market. The latest to ride this wave will be Chery China which will (potentially) introduce its passenger cars (hatchbacks/sedans) and SUVs (and crossovers) including electric vehicles (EVs) to Pakistani car buyers, through a collaboration with Ghandhara Nissan.

Ghandhara is an old pro in bringing foreign branded heavy vehicle models (such as Dongfeng, Nissan, JAC and Renault) to the market - but for the first time since Nissan Sunny’s failure to take-off many eons ago, and the more recent deadlock on Nissan’s Datsun model for which the car plant was initially set up - it will be truly dipping its proverbial toes in the passenger car segment.

Arguably, Chery is the right strategic move for Ghandhara as it has been having trouble attaining clarity from Japan’s Nissan Motors (NML) on the future of Datsun in Pakistan; the agreement for which was first signed in 2018. In its progress report of Oct-20, the company said the status of the car project was still “inconclusive” and deliberations were underway with NML. The main issue surrounding the hold-up was availability and access to CKD kits and parts from Nissan that Ghandara wanted assurance on, knowing that localization to the level required would not be possible given domestic technological and production capabilities.

Ghandara now does not have a lot of time left to avail the Auto Development Policy which wraps up this year, which also evidently makes Chery’s entry just in the nick of time. If the project is successfully launched and Ghandhara is able to source parts as well as move toward localization, Chery could very well be one of the forthcoming brands to join the now growing queue of Chinese automobile vehicles in the market.

Its triumph (or lack of) however will come down to the pricing of the models introduced, and how well Ghandara markets the rather unknown Chinese brand (whose name is uncomfortably similar to the General Motors’ Chevrolet, colloquially known as Chevy).

Domestic assemblers introducing Chinese models have an uphill battle to fight and they know it. Whether it is Master Motors introducing Changan or Regal Automobiles introducing Dongfeng Sokon’s high-end luxury SUV, the marketing and pricing strategies are consistent with their primary goal to capture a highly concentrated market first, and make profits later. That means, these companies are offering all the bells and whistles: huge price cuts for end-users to justify taking the “leap of faith” and full specs compared to traditional Japanese cars while laboriously trying to build the brand image. After all, they must counter deep-seated consumer perceptions on Chinese goods synonymous with poor quality.

Globally, while many Chinese automobile manufacturers have been accused of copying design and stealing technology of the more established western auto giants, over the years they have made concerted efforts to improve the quality of their vehicles and power their facilities with R&D and technology.

Leading market research company J.D Power in its Initial Quality Study (IQS) for 2020 found that improving vehicle quality and performance of Chinese brands was driving Chinese consumers to buy a domestic brand versus an international one. J.D. Power that gleans insights from a large number of vehicle owners however also found that there were wide variations in vehicle quality across Chinese brands — some improved performance to reach the same level of quality as international brands while others lagged behind.

While Chery recorded the same score as the industry average under IQS, and is one of the 15 brands to be on or above average scoring, it is still below Dongfeng, Changan, FAW and SAIC (among others). Though the ranking itself is not a conclusive determinant of quality, it is certainly indicative. In any case, even if the quality and performance are excellent — though Japanese make vehicles in Pakistan are hardly known for their outstanding quality — Ghandhara has a herculean task on its hand to put the Chinese Chery on top.

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