Multi-brand strategy proves success for Chery

In November the sales of the Chery Automobile Co, China's largest homegrown carmaker, reached an all-time monthly record of 54,985 units, a surge of 141 percent over the same period last year and 25.8 percent higher than its sales in October.

Chery sold nearly 440,000 cars between January and November this year, a year-on-year increase of 32 percent. The company estimates that its total sales this year might hit 500,000 units. If its predictions prove true, the company will see an increase of 40 percent over its last year's sales of 356,000 units.

In the first 11 months of this year, Chery's domestic sales more than doubled compared to the previous year. Its passenger vehicle export volume also remains the largest among the country's indigenous carmakers.

According to the company, its multi-brand strategy, as well as the government's stimulus package, were the major contributors to its sales growth.

Chery has launched three all-new brands this year - Karry, Riich and Rely - and has built three sales and service networks for the freshly-introduced models. Currently it has 541 authorized service points, covering 300 prefecture-level cities across the country.

Along with the existing Chery brand, the company has established a comprehensive range, including micro, sub-compact, compact and mid-sized cars, SUVs and commercial vehicles. This lineup is key to the company's aims of establishing a large transnational auto group with a full range of products.

This year the company launched three models under its minicar brand, Karry, as well as the first model bearing the Riich badge - the Riich M1 subcompact.

The monthly sales of Karry minicars has almost reached 10,000 units, according to Chery's spokesman Jin Yibo.

Just a few days ago, the State Council declared to extend the implementation of "selling autos to the countryside" policy to the end of next year. Jin said that it will bring a huge benefit for the development of Chery's small-displacement vehicles and minicars.

Its lead brand, Chery, has seen average monthly sales of 37,511 units this year.

During the Guangzhou Autoshow last month, Chery exhibited 16 models under its four brands, including one concept car, four new models and 11 cars that all performed well in sales terms.

Yin Tongyao, president of Chery said: "Chery's brand segmentation has become much clearer, which will help the company access different market sectors.

"This is the first phase of Chery's development strategy of building homegrown brands into internationally recognized names through globalization and innovation."

As the most successful Chinese car exporter, Chery accounts for more than half of China's export of homegrown passenger cars over the past three years. It now has 11 plants in a number of countries and regions, including Russia, the Ukraine, Egypt, Iran, Indonesia, Uruguay, Thailand, Vietnam and Taiwan province. Another four are still under construction and will be completed by the end of this year.

According to earlier reports, Chery has been in talks with a Turkish company with regard to establishing production facilities in its home country with a total investment of $500 million. The plant will mainly produce Chery's A1 subcompact and A3 compact sedans for the Turkish and European market.

The move is seen as a bid to counter the difficulties many Chinese automakers have faced when attempting to conquer the lucrative European market.

Chery currently has an annual production capacity of 450,000 vehicles and 450,000 engines at its home base in Anhui. It aims to increase its output to 1 million units by 2012.

Dalian factory

To meet the fast growing demand in both domestic and overseas markets, Chery began to build a new production base in the northeastern port city of Dalian several months ago. It plans to invest more than 4 billion yuan in establishing the 200,000-unit plant, its first domestic facility outside its home base in the eastern city of Wuhu.

The factory will begin production of Chery's small and medium-sized cars in June 2011 and will go into full operation in 2015.

Chery is also working with a Taiwanese company to produce cars for the island and Southeast Asian markets.

(China Daily 12/14/2009 page6)