Over the past 15 years, the launch of some Chinese cars has brought significant changes to the Brazilian market: JAC J3, GWM Haval H6, BYD Dolphin, Cao Chery Tiggo7, GAC GS4, and now Omoda 5. I want to quickly mention the trajectory of these models.
I watched the opening chapter of this series from the inside. I was invited by Sergio Habib to launch JAC Motors in Brazil in 2011, when I was working at Mercedes-Benz.
The invitation came from Sergio Habib
The loyal type, Habib said in the first interview: “I liked you, Edo, and I even want to hire you. But my company is very different from the routine you are used to. Here you will have to roll up your sleeves and get your hands dirty. Those who come from big companies usually do not work at SHC Group.”
I didn’t let go. “Well, Sergio, I’m used to dealing only with German brands (before Mercedes, I worked at Volkswagen). I’ve never worked with Chinese brands. It would be a risk for both of us.”
We take risks. It worked humbly to the core. And for both. At the end of 2011, JAC Motors had the sixth largest share of voice (automatic media generation) among automobile brands in the country, a result, among other reasons, of the direct action of the communications man. It was behind only Volkswagen, Fiat, General Motors, Ford and Renault. This is less than 1% of sales. It seemed much larger than its size allowed.
This was my first literary work as a corporate communications professional. I did what I wanted, from 2011 to 2024. I always had SH’s support in bold projects, which broke the corporate will models of traditional manufacturers.
The first to invite bloggers and influencers
I’ve held ‘clinics’ with journalists, put cars with over 100,000km on the clock to test, set up events where JAC did 0-100km/h laps on the test track with competitors, and we’ve been the pioneers in inviting bloggers and influencers to events. We were annoying, to use the fashionable word. And we made noise.
I took a practical lesson at Grupo SHC on the four Ps of marketing (price, promotion, product and point of sale). It was the “perfect” that presenter Fausto Silva repeated often in advertisements (promotions). With more than 70 points of sale opened in the first month, the car was launched at a very competitive price, R$37,990 – more or less what competitors cost without ABS, airbag, CD player and air conditioning.
The product itself technically did not owe anything to its competitors at the time – Volkswagen Gol, Chevrolet Agile, Fiat Palio and Ford Fiesta. In the first month of sales, JAC J3 sold 3 thousand units.
This meant about 3% in the hatchback segment, which was significant for an emerging brand, but negligible in the same competition with major brands. What the “JAC effect” has caused is the sacrifice of profit margins of major automakers.
If it had a 3% share, the other 97% preferred to look for models from major manufacturers, right? But the media campaign was so intense, and Faustão himself aroused such interest among the public, that 97% went to stores of famous brands and said: “I came here to buy (a national hatchback). But I can no longer accept paying R$38,000 for a naked car. I want a discount.” This is what happened to you.
Whether it was a coincidence or not, six months later, the federal government increased the IPI for imported vehicles and cast a pall over JAC’s plans. As taxes increased, Habib cut media funds, sales declined, dealerships closed… and the rest is history.
The debut of Electrified
It was April 2023 when Great Wall Motors announced the launch of the Haval H6. It was a mid- to large-sized SUV, with a spacious interior, hybrid technology and, wisely, the first Chinese car with aspirational appeal on the market: the GT version came with almost 400 hp, 0-100 km/h in less than 5 seconds and a price in the R$300,000 range. It has debuted and has already taken the lead in hybrid car sales.
A few months later it was the turn of BYD Dolphin, which was the size of an average hatchback and had an attractive price for a 100% electric car, around R$150,000. It quickly became the best-selling electric car and paved the way for the launch of the Dolphin Mini. Today, the two account for 60% of all electric vehicle sales in the country.
The Caoa Chery Tiggo 7 had reasonable sales since 2019, when it was launched, until the automaker created the sports version, in February 2024, at a scandalously attractive price: R$136,000, or about R$90,000 less than the Jeep Compass Limited.
Sales tripled. Today it is (still) the best-selling model of Chinese origin in the country. More than 29,400 units were registered from January to October this year, making it the 12th largest SUV sales in the country. Do you think this is not enough? This size puts it ahead of more affordable models, such as the Renault Cardien and Citroen Basalt.
After making its debut in the country recently, GAC surprised by launching five cars immediately. One of them, the GS4, quickly attracted attention. The only hybrid, about the size of a large SUV, debuted at a price of less than R $ 200,000, and due to the fact that the brand has a partnership with Toyota and Honda in the original market, an immediate comparison was drawn with the Corolla Cross. The press has made several comparisons: the GS4 is larger, does more, consumes less, has a finer finish, is better equipped and is cheaper. Guess how many comparisons it won?
The latest new product appeared on the market last week, and given the announced selling price, it is likely to be a hot new car: the Omoda 5. It is also the size of a compass, comes with a hybrid engine (224 hp), averages more than 20 km/l, has an exceptional finish, an ADAS package… and costs R$160,000. Or R$15,000 less than a VW T-Cross. And comfort line.
You’ll hate me, but…
(Months ago, I wrote a column betting that the Volkswagen Terra would be one of the country’s best-selling SUVs and that its arrival would shake up its rivals. Haters crucified me. Because, in October, it was the overall leader in SUV sales for the second month in a row.)
I’ll be more insulted now, but maybe I will do it again: the Omoda & Jaecoo chain is starting to establish itself in the country and the absence of stores in many cities will not allow this hybrid to reach full sales in large quantities any time soon. But in cities where the brand has a network, pay attention: sales will be large and competition will have to lower prices.
It’s been a long time since I’ve come across Chinese car haters. I think this bias has already been overcome, even thanks to the virtues of the bestseller list I presented above. But if you’re one of them, well, you don’t have to like it. Just open your mind and understand/accept the indirect effect of the arrival of these models: Chinese cars are (also) a great guideline for redefining the prices of other cars. That simple!
It is worth noting that Stellantis is launching its own Chinese brand, Leapmotor, while Renault do Brasil has sold 26.4% of its shares to Geely, which will benefit from its production structure in the country. If Chinese cars, even for them, the major manufacturers installed in the country, have become a good business, why shouldn’t it be the case for us as well? Point and that’s enough.
About The Author
