Wed, October 17, 2012
Business > Markets

Chinese cars win hearts of Brazil's new middle class

2012-10-17 04:35:44 GMT2012-10-17 12:35:44(Beijing Time)  Xinhua English

by Wang Fan and Marcelo Cajueiro

When sales manager Wellington Antunes arrived at the Chinese Chery car dealership in a busy street in Rio, he saw several customers already line up outside the door. It was around nine o'clock in the morning.

As he was setting everything ready for business, several young girls walked into the store and were soon drawn to a QQ car. They almost rushed into the vehicle to take a closer look. Their parents followed in and started to flick through the colorful promotion materials.

"I see such scenes every morning when I come to work," said Antunes.

VOICE OF CHINA IN BRAZILIAN AUTOMOBILE MARKET

The car dealership is in Botafogo, a historical and fashionable district in Rio de Janeiro, the second largest city in Brazil.

Here the streets are busy all day long. A yacht club is nearby, as is a shopping center full of aromatic cafes. But for Brazil's new members of the middle class, the dozens of local car dealerships are more interesting.

China's Chery dealership is located near Botafogo's busiest intersection, an unrivaled location.

During the daily commute, anyone going from the beachside neighborhoods to the city center will definitely notice the eye-catching Chery sign. And many of those people are owners of Chery models or other Chinese brands.

When traffic allows, older customers will even pull over to say "Hi" to Antunes and his colleagues.

In Brazil, the Southern Hemisphere's largest emerging economy, Chinese-made cars are relatively new to the streets. But just in a few years time, their brand names are known to almost everyone.

Walking around downtown Rio or Sao Paulo, as well as smaller cities like Recife and Salvador, one will occasionally spot a good-looking man behind the wheel of a speeding Chery SUV, or a stylish woman driving her colorful Lifan or JAC.

The Chery dealership's sales volume is definitely among the best in Botafogo, Antunes tells Xinhua proudly.

He turned on a computer to bring up a website called Chery Club, where Chery car owners and fans throughout Brazil gather to discuss their experience and give each other advice on driving and maintenance.

"Low price, low fuel consumption, long warranty period, comfort and security, these are some of Chery's advantages," said Antunes.

Chery and several other Chinese-made vehicles target Brazil's burgeoning middle class as their main consumer groups.

Brazilians have benefited from growing national economic strength in the past 10 years. The quality of their lives has been significantly improved, with more than half of the country's population now solidly middle class. As a result, more and more families have the purchasing power to buy their first car.

Chinese cars entered the Brazilian market at just the right time, and many of their features make them irresistible, including an average 20,000 U.S.-dollar sticker price, fuel efficiency, warranty periods many times above the industry average, and customized interior and exterior design options. Plus, they have all the security measures required by local regulations.

"Brazilian consumers pay great attention to function and durability, that's why Chinese cars really satisfy their demands," Antunes explained.

For example, the small refrigerator for cold beer in many Chinese car models is of special appeal to beach-loving Brazilians, he said.

KEYWORD: CONFIDENCE

No matter what country you live in, the vast majority of ordinary consumers are not experts when it comes car brands and models. Almost everything depends on their confidence in the brand.

In the past, that was precisely the weakness of Chinese products.

"How can I establish confidence in our products among customers?" was the question Fernando Morais, general manager of the JAC dealership at Botafogo, asked himself when he first started this job a few months ago.

He soon found there was no need to worry.

The three-story floor-to-ceiling glass JAC Motors dealership, shining with the reflection of dozens of cars showcased in and outside the store, has a maintenance area in the back. In upscale Botafogo, where land is pricy, the shop speaks for itself.

According to Morais, most of their Brazilian customers stepped into the showroom looking skeptical, but their concerns vanished after they had a test drive.

"We have a lot of longtime customers. Many people recommend a test drive to their family and friends. The word-of-mouth marketing happens naturally," he said.

Morais and Antunes both agreed the impression on Chinese-made goods are quite different now.

"In the past, we thought only of low-end household items or toys when we thought about Chinese goods," said Morais.

"No one had anything good to say about the quality of Chinese products in the past," Antunes added. "That was the Brazilian people's first impression of China."

Geographically apart, Brazil and China had almost no contact throughout history and today they are far from being able to understand each other.

Brazilians' impression of China is largely influenced by news reports and their personal contact with Chinese goods.

In recent years, thanks to the Beijing Olympic Games, the Shanghai World Expo and exponentially growing Sino-Brazilian trade and investment, Brazil is developing a clearer picture of a powerful and modern China.

Brazilian newspapers, magazines and television news today cover the Chinese economy from time to time. As Brazil's largest trading partner and the biggest commodity export market, China is linked to the nerve of the Brazilian economy.

Today, in addition to cars, Chinese-made mobile phones, personal computers, air conditioning units and other high-end and high-value-added products begin to appear in the Brazilian market.

"Right now the Brazilian society as a whole is showing more confidence in Chinese products and brands, and such confidence extends to all kinds of goods, although this change began to take place only recently," Antunes said.

"The accumulation of confidence in the products of a country takes time and we must promote it," he added.

BRAZIL WELCOMES CHINESE PRODUCTS

A large number of Chinese business executives in Brazil have a common understanding that localization is key to their success.

As a matter of fact, local consumers also expect Chinese companies to operate in Brazil.

Antunes said the biggest concern of local consumers lies in the long-term after-sale service commitment.

He recalled that 20 years ago a Korean car brand failed in Brazil because it had no plans to stay in the country.

Brazil, on the other hand, started to impose higher tax on imported cars, starting in late 2011. So it became a must for foreign carmakers to have production bases in Brazil.

The Chery automobile production plant, in the state of Sao Paulo, will start operation next year.

Antunes and his colleagues hang a large photo of the production base and parts shop in their showroom for every customer to see.

A JAC Motors plant is expected to be completed and put into operation in three years in the northeastern state of Bahia.

Morais is now looking forward to that day.

"I want to be the forerunner of JAC Motors in Brazil, and I want to witness the development of the brand in Brazil, which will be my pride," he said.

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