Chinese cars out to conquer world, potholes first

By Simon Rabinovitch

QUITO (Reuters) - An embarrassed daughter is a small price to pay for a cheap Chinese car.

That was Irma Cortez's thinking as she strolled through a sleek auto showroom in the Ecuadorean capital. A cleaning products saleswoman who needs a vehicle to reach clients, she was about to buy her first ever Chinese car, a small Changhe that cost 25 percent less than the competition.

"My daughter is a business student and she told me not to go for a Chinese car because of the brand," the stout, middle-aged Cortez said. "I myself have some reservations about the quality but given my economic position it makes sense."

Chinese cars have been on Quito's roads for barely a year but they are fast becoming a force in the snaking lines of traffic that clog Ecuador's hilly capital.

China's auto makers have set their sights on becoming the next exporting powerhouse on the world's roads and they have made emerging markets, from Latin America to Russia, their proving ground.

They have reason to be satisfied so far: China sold 612,700 cars abroad last year, up nearly 80 percent, mostly in the developing world, according to the commerce ministry.

But like the Japanese and Korean car companies that went before them, Chinese firms are finding they have to win customers with cut-price deals before they can establish their names.

"People don't know these cars. They just see they're Chinese and think that means they're bad," said Rafael Bader, a commercial director at Cinascar, the biggest importer of Chinese cars in Ecuador, Colombia and Venezuela.

"It's a reality we have to confront."

Cinascar has tried to change the popular perception by waging a public relations campaign and offering extended warranties along with prices that are 20-25 percent cheaper than competitors.

The firm has been in Ecuador for only ten months and its numbers show that it has already catapulted into 11th place by units sold out of the country's 43 dealers.

QUALITY VS PRICE

Doubts about quality, though, are hard to shake.

The Changhe Ideal, the car Cortez was considering, had defects visible to the non-expert eye. The car's logo had seemingly been stuck on in haste and sat at an awkward angle; some paint had come off its body; and gaps between the side panels were clearly uneven.

To be fair, the Changhe was one of the cheapest on the lot. It is even hard to find a car that cheap in China as Chinese producers have generally kept their best cars at home, deliberately targeting the low end of foreign markets.