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March 22, 2011updated 08 Apr 2021 8:08am

BRAZIL: Group SHC invests US$220m to import JAC cars from China

It's not everyday an importer bets so highly on the Brazilian new car market, especially considering it is launching an independent Chinese brand little known internationally.

It’s not everyday an importer bets so highly on the Brazilian new car market, especially considering it is launching an independent Chinese brand little known internationally.

SHC Group’s entrepreneurial owner Sérgio Habib is launching JAC (Jianghuai Automobile Co) with an investment of no less than US$220m. This is more than Chinese rival Chery is spending on constructing the first phase of its manufacturing plant in Brazil.

Habib, a former vice president for Citroën in Brazil, and still credited with retailing half the French brand’s total sales (90,000 yearly) through his own dealerships, has plenty of experience. On 18 March he simultaneously opened 50 JAC dealerships in 28 cities. No independent importer has ever dared attempt so much at once.

The 100% Chinese state-owned JAC has produced trucks since 1964 and started making cars a little over three years ago. Its plant is up to date with a capacity of 500,000 units yearly and the automaker maintains a design studio in Turin (with consultancy from Pininfarina) and has launched a carefully selected model line into the best-selling segments here in Brazil.

Last year, JAC exported a mere 21,000 units and Brazil will now be its largest overseas market.

Group SHC expects to sell 36,000 cars this year and at least 60,000 in 2012. It wants to conquer 1% of the local market, a share Nissan has struggled to reach.

Highly proficient with statistics and data, Habib reckons Brazil’s ‘big four’ (Fiat, Ford, GM and VW) will lose ground and forecast: “Within three years Chinese brands will hold 5 to 6% of the local market, equivalent to what South Koreans will reach”.

His market strategy seems right. JACs are sold with a full, bumper to bumper six-year, unlimited mileage warranty and dealers offer with low-price, fixed price maintenance and low-cost insurance packages. And retail prices are very competitive for the single, richly-equipped model pitched into each carefully selected segment.

The compact J3 hatchback costs R$37,900 (US$22,300) and the J3 Turin sedan sells for R$39,700 ($23,300). Domestically-made competitors – VW Gol, Fiat Palio, Chevrolet Corsa, Ford Fiesta and others – retail for over 10% more with equivalent trim/equipment levels.

In June the J6 monovolume (MPV/minivan) arrives, followed by the mid-size compact J5 in September.

Of similar size and with similar cabin room as the Gol, the J3 hatchback’s boot is larger. Finish is reasonable. Some features are missing, such as adjustments for seat height, steering wheel reach and seat belt anchorage height.

Suspension settings feel right for Brazil but gear shift precision could be improved. The 1,332 cc/81.3 cu in, 108 bhp engine (AVL-developed), despite being advanced enough, lacks torque at lower revolutions which is not ideal for city driving.

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