I think Chery is tapping into a strong desire on the part of many Chinese people to see a homegrown independent Chinese branded car become a leader.
I talk to Chinese people on the mychery.net Chinese board regularly, and this is a common feeling expressed. There is a lot of pride associated with being able to support a Chinese car, especially as Chery's quality has been rapidly increasing in the past couple years.
The micro-car has changed the Chinese urban landscape and is now headed for the West; or so its manufacturers hope.
A decade ago, private cars in a Chinese city tended to be big and black. But over the last couple of years, a dash of colour has begun to appear on the streets, small darts of metallic lime green and garish yellow.
The bright colours are usually found on the QQ, a micro-car made by Chinese company Chery that was one of the bestsellers in the domesticcar market last year, with sales rising a 130 per cent to 110,000 units.
The QQ is one of the models that have taken Chinese companies from being bit players in their own car market to significant competitors. The best selling model in China last year was the Charade, a sub-compact car made by First Auto Works, another local manufacturer.
In total, Chinese brands won a market share last year of 26 per cent, up from 2 per cent in 2000, putting them just behind Japanese brands which had 27 per cent.
The surge of Chinese brands would be of natural interest to the leading global automakers because of the growing importance of the Chinese market. Yet it is of particular significance given that Chery and several other Chinese companies have announced plans over the last year to begin exporting cars to the US and Europe.
"I showed these market share figures to some people in Detroit a few weeks ago, and they were stunnedby the Chinese sales," says Michael Dunne, president of Automotive Resources Asia, a Shanghai industry consultancy.
The question being asked of the Chinese companies is whether they have won market share simply by selling at low prices, or whether they are also beginning to master the dark arts of branding and marketing - skills they will need if they are to succeedoverseas.
Price is definitely a big factor. The QQ retails for Rmb33,000 ($4,109), compared with Rmb46,000 for the General Motors Spark in the same category.
Such low prices have helped create a new generation of car-buyers, less concerned about the status symbol of a large vehicle. The greater fuel efficiencyof smaller cars has been an added incentive in a period of higher oil prices.
10 years ago I would only see 1 or 2 chinese cars a month. Almost all the cars were Japanese the others were volkswagen/audi and some Mercedes Benz, Rolls royce, Bentley. Now Chinese brand cars are as many as Japanese, they will be more Chinese brand cars than Japanese brand in 2006.
But say the car called Changan Suziki Alto. It saids Changan on the front and Suziki on the back. Is that car considered Chinese brand or Japanese brand.
Chery sold most cars in guangdong province. 2nd was Sichuan 3rd Shandong province. Guangdong was number 1 in Chery sales but I their are a lot of imported cars there too like Bentley, rolls royce, Merc Benz S Class Lexus LS. I lost count of how many S Class and Bentleys I saw in guangdong last time I was there.
"Chery Automotive Company, China's home-brand automaker, will start to move its sales headquarters to the country's largest industrial city of Shanghai in June , China Business News reported on Monday.
Meanwhile, the report, quoting sources with the Anhui-based auto company, said Chery will move part of research and development operations to Shanghai.
"This is part of the company's strategies to expand eastward," said a source with Chery, who asked to be anonymous. "If everything goes on smoothly, the whole move will be completed at the end of this year," the source said.
Qin Lihong, spokesman of Chery's sales company, said he could not confirm the move. But a sales agency of Chery in Shanghai confirmed that, saying that "It (the sales company) will soon move to Shanghai".
If that comes true, Chery will become China's first automaker with its production base in one city, and sales base in another city. The nine-year-old Chinese carmaker is legend in China's automobile manufacturing as it has produced a total of 500,000 cars.
Unlike many joint ventures in the Chinese auto industry that depend on foreign technology and sell China-made cars with overseas brands, Chery depends on its own research and development to turn out products with proprietary intellectual property rights(IPR).
Chery has been ranked among the 10 biggest automakers in China for years. Its QQ, a mini-car model, enjoys good sales in China costing less than 40,000 yuan (5,000 U.S. dollars) a unit.
In 2005, Chery exported a record 18,000 cars, the most among China's car manufacturers. Currently, Chery cars are sold in 38 countries outside China."
Yes, we have to hand it to Chery; they are doing a great job of playing catch-up and who can blame them for a little piracy along the way. Of course an official voice like Xinhua, has to sing its praises even if not true to fact.
But I look forward to the day when China has the integrity not only to report the facts but to indict a top industry leader regardless of the economic consequences. Its next door neighbor is a model, but even it could not have done such a thing some 30 years ago.
Anyway it'll be useful for Chery to have an office in Shanghai for among other reasons to oversee the enormous logistics operations of getting the cars down the river and onto the trans ocean ships.
How much easier it is for SAIC to do that. Will we see another equity merger between the two down the road a bit??