Chinese brand Chery is on a mission to become a global powerhouse in the areas of automotive manufacturing and digital technology. The company has no less than eight vehicle brands under its umbrella including Jaecoo, Omoda, Exeed, Luxeed, Jetour, Karry and iCar, in a complex mix of exports, domestic cars and badge engineering.
I recently attended the 2024 Chery international user summit in Wuhu, where the company outlined its plans and products to the world media and global dignitaries.
Chery
Though established 27 years ago, ownership of the company remains sketchy but the Wuhu municipality is a shareholder. It’s an unconventional working set-up used by many Chinese brands, and advantages include close relationships with many organisations to the benefit of regional economies.
The brand also collaborates with local higher education institutions to help produce new technologies and polish the future workforce. Component manufacturers such as Bosch supply Chery with engine management systems from local factories, ensuring employment for citizens and reducing operating costs.
President of Chery International Guibing Zhang opened the summit, saying “the electric revolution is no longer polite”, thus investment in green technology is paramount for the group. The company is heavily invested in solid state batteries, digital wares, aeronautics and robotised dolls and dogs, among others.
Whether you walk, drive or cycle the streets of the sprawling metropolis of Shanghai or Wuhu, Zhang’s opening comments are evidenced by urban streets that are quieter thanks to the marked penetration of electric mobility.
Globalisation
Zhang and his executives laid bare Chery’s global ambitions during the weeklong summit, including a visit to one of the company’s manufacturing plants in Wuhu where it manufactures the Tiggo 7, 8 and 9 models. The line is a high efficiency, multi model assembly. Agility is also encouraged on business decisions, such as responding to market-specific requirements.
A prime example of that flexibility is Chery agreeing to a first-of-its-kind deal to continue building the discontinued first generation Tiggo 4 Pro compact crossover model for the SA market specifically. The model has performed well in SA, including selling 990 units in September, to make it the country’s fifth-best selling passenger car.
The company’s president spoke about a plan to enter more global markets and establish manufacturing bases and R&D facilities in the EU, US, Middle East, South America and North Africa. Zhang also said localisation of component manufacturing was planned in the identified zones, but efforts to stop the march of Chinese automotive brands entering some EU zones was well publicised.
In a move to prevent a threatened flood of cheap EVs built with state subsidies, the European Commission slapped provisional duties of between 17.4% and 37.6% on China-built cars on top of the EU’s standard 10% duty on car imports.
Perhaps a more pressing problem for Chery and rival brands is the Chinese domestic market. With a population of more than 1.4-billion and a GDP in the region of $14-trillion (R247.4-trillion) , China is by far the world’s biggest and most competitive market for EVs, with more than 20 native brands fighting for market share alongside global legacy brands.
Forecasts said more than 10-million NEVs will be sold in China alone this year, while about 2-million and 3-million will find homes in the US and Europe, respectively, in 2024.
Chery and SA
Zhang explained the reason the company isn’t considering a vehicle manufacturing facility in SA, such as that established by Chinese peers BAIC in Gqeberha, is largely attributed to restrictions of the automotive production development plan requiring a 60% localisation for start-ups.
He said importing cars was the more feasible route for the company. However, Zhang said they are watching the Chery SA subsidiary keenly as an important stepping stone for marking the roadmap towards entering regional markets on the continent.
Where the local product is concerned, the Tiggo 4 Pro will continue selling alongside the larger Tiggo 7 Pro, Tiggo 8 Pro and Tiggo 4 Pro panel van, with a new Tiggo 4 Cross to be launched in November.
New versions of the Tiggo 7 and 8 Pro SUVs, including plug-in-hybrids, will also enter the market in 2025, along with the new Tiggo 9 Pro flagship.
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