Is buying a Chinese vehicle risky?

QUESTION

Hi John,

What are your thoughts on the rise of Chinese vehicle sales?

I’m looking at a new LDV Deliver 9 and I’m quite impressed after the test drive. Personally, I think they’re chomping at the heals of all the established brands, and having test driven a Sprinter in this light commercial space, what they’re producing with the Deliver 9 is a vast improvement over the V80.

Also on the other end of the scale I’ve been comparing and considering the MG3 vs the Kia Picanto.

In my world, my brother, who’s a plumber and runs a business with multiple vehicles, is seriously eyeing off the GWM ute as an economically rational replacement for his Hiluxes. A close friend of mine recently chose an MG ZS over a Kia Sportage.

Given the current political climate with China, it kind of feels treacherous, and there’s the quality and reliability question that still gives me a small percentage of doubt around doing e a deal on a Chinese brand. But I’m feeling price overcomes that issue.

Thanks,

Mark

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ANSWER

Mark,

Chinese brands are like this: The only reason to buy them is the cheap acquisition cost. This alone doesn’t make them economically rational.

You should also be aware of an emerging rust problem with LDV: DON'T BUY WARNING: Why owning an LDV in Australia can go wrong >>

The unknowns are reliability, customer support and resale value (depreciation). If those things all prove to be good, then buying one is a ‘win’ subject to the vehicle being well equipped and tuned at the selected pricepoint. If they’re not, then, in the case of a business where the income is leveraged against reliability of the vehicle, and the costs involved with being off the road are very high, then there is a higher inherent risk in buying one.

Should I Buy a Chinese Car in Australia? >>

On treachery: You’re being a nut. Show me the manufactured item that does not either come from, or have essential components which come from, China… It’s almost impossible to buy anything that was not made in China, at least in part.

A test drive and the price does not tell you everything about the economics of owning a particular brand.

Sincerely,

JC

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