Chinese pickup-truck maker Foton suffers a setback in its plans to expand into Australia and New Zealand as importer-distributor WMC Group calls it quits, saying the products are too expensive.

WMC Group CEO Jason Pecotic says his Sydney-based company has issued Foton a formal withdrawal notice.

“We have withdrawn from the distribution agreement for a number of important reasons, most significantly uncompetitive pricing, particularly on the back of an unstable U.S. dollar and as a result of Japanese manufacturers lowering prices,” Pecotic says in a statement.

“The other aspect that particularly worried us was that despite Foton's insistence on premium pricing for the upcoming P201 model the fact is it has no history and, given the previous model (SUP) has had quality issues which WMC has been monitoring closely with the South African importer, we don't believe this product can command a premium price.”

Beijing-based Beiqi Foton is a Beijing Automotive Industry Corp. subsidiary making commercial trucks in a joint venture with Daimler called Beijing Foton Daimler Automobile.

“Despite protracted negotiations with Foton, they would not meet the pricing model that we believe was appropriate for a vehicle such as this in the Australian market,” Pecotic says. “In our view, this would be 30% below its Japanese rivals.”

Pecotic makes the statement in China, where he is securing distribution rights with another auto maker. WMC says details will be revealed shortly.

WMC distributes Higer Bus and JAC (Jianghuai Automobile Co.) trucks and light-commercial vehicles in Australia.

“In three years, we have taken Higer from a startup with zero sales base to near-market leadership,” Pecotic says.

“We will be launching the first light-duty JAC trucks to the market during November, and we have a range of new JAC vans set to be launched in early 2012.”

WMC also is preparing to import Chinese-built Joylong vans into Australia and will have the first units of a brand new to Australia near the end of November ahead of a full launch early in 2012.