"Chery" redirects here. For similar words, see Cherry (disambiguation) or Cherie (disambiguation).
Chery Automobile (in Chinese: 奇瑞汽车; English pronunciation: [ˈʃɛɹiː]) is an automobile manufacturer in China. In Pinyin it is "Qirui" and its English transliteration should have been "Cheery" but there was a mistake in the transliteration process and it was decided by the company to not correct the error. It is owned by the local government of Wuhu (but is scheduled to be privatized), and sold about 305,000 vehicles in 2006. It is the largest independent Chinese auto manufacturer and one of the fastest growing automakers in the world.
Chery was founded in 1997 to prop up the economy of Wuhu, a region of China that has received little industrial development. Its first factory used machines and engine technology purchased from Ford Europe for US$25 million. It began auto production in 1999 using a licenced chassis from SEAT's Toledo. The company was an illegitimate company under Chinese law of the time and had to be registered as a "Car Parts Supplier." Thus, the company was not able to obtain a license to sell their cars in all of China. In 2001, Shanghai Automotive Industry Corporation (SAIC) bought a 20% stake in the company, allowing Chery to use SAIC's national retail sales license. In 2001, Chery began exporting its cars to Syria, becoming China's first car exporter. Chery also received its ISO-9001 certification. In September 2002, Chery received its ISO/TS 16949 certification, the highest quality certification at the time.
2003 to present
In 2003, Chery founded a research and development organization, and began working with foreign consultant firms to improve its technology and quality. In its relentless pursuit of quality, Chery hired a Japanese engineer from Mitsubishi to head Chery's Lean/Six Sigma production systems, which were first applied to their cars in 2003. They adopted DURR Paint Systems in their paint shop in 2004, becoming one of only 5 factories in the world to have this advanced paint system. SAIC sold its stake back to Chery in 2004 due to rising tension between Chery and its other partners General Motors and Volkswagen
In 2005, Chery was upgraded to ISO/TS 16949:2002 production quality, the highest and strictest quality control system in the global auto industry. They also began working with Malcolm Bricklin's company, Visionary Vehicles, hoping to be one of the first Chinese automobiles sold in the United States. The plan was to import five new car lines. Bricklin planned to have 250 dealers in the United States selling 250,000 cars a year by 2007. However, after 2 delays and various disagreements over finances and car design, the deal broke down. Instead, Chery is pursuing its own export plans and is designing a large array of cars for the American and European market and Chinese market. Aesthetic design is being aided by Bertone and Pininfarina of Italy known for their designs for Ferrari and Lamborghini. AVL of Austria is also working with Chery to produce 18 engines, including a turbodiesel, for the new line of cars. The new engine brand, called ACTECO, meets Euro IV emissions standards and uses advanced technologies such as aluminium alloy cylinder blocks/heads and direct fuel injection. Bosch is helping Chery to design modern transmissions. Lotus Engineering (known for their racing car chassis expertise) is aiding Chery in car design and quality. Ricardo Consulting Engineers is also devolping a hybrid powertrain for Chery for use on China's first hybrid vehicle.
Design copying controversy
Chery gained international notoriety over well-publicized illegal copying of foreign automobiles, namely General Motor's Korean subsidiary GM Daewoo Auto & Technology's Daewoo Matiz(sold as Chery QQ) city car and Daewoo Magnus(sold as Chery Eastar) mid-size sedan. Chery attempted to negotiate a local Chinese production licenses of those vehicles with bankrupt Daewoo Motors prior to General Motor's purchase of the bankrupt automaker's assets in 2002, but the negotiations were never closed. Nevertheless, Chery proceeded with the production of these former Daewoo vehicles without a formal license, triggering General Motors to sue Chery for copying in December 2004 citing "extreme similarities". GM Daewoo claimed their investigation results showed the Chery QQ shared a remarkably identical body structure, exterior design, interior design and key components. "Chery even used a camouflaged Matiz car to pass auto tests to acquire authorization from the government over production and sales of QQ." With the court's inability to come to decision, GM opted to drop its case in November 2005 to preserve its business interests in China. However, GM reserves rights to sue Chery again if it attempts to bring the vehicles in question to European and North American markets.
Chery produces most of its cars in China. In 2003, Chery built a plant in Iran, China's first foreign car plant, and at the Modiran Vehicle Manufacturing Company saw its QQ put into production in 2005. Also in 2005, another Chery plant became operational in Russia. Chery is planning to begin production in Malaysia in late 2006 and saw its cars being built at the former Daewoo Motor Egypt plant at Maddi, Cairo under the Speranza brand name. Chery has signed an agreement with Mauricio Macri-owned company Socma to form Chery Mercosur, a joint-venture which will produce the QQ and Tiggo in Montevideo, Uruguay from 2007 onwards.  After selling 1 million cars in the US, Chery intends to build a facility there as well.
Chery sales history
2003: ~90,000 (8th in China)
2004: ~86,000 (10th in China)
2005: ~188,000 (5th in China)
2006: ~305,000 (3rd in China)
2007: ~392,000+ (Estimated)
Out of production
2000–2006 Fulwin/Windcloud (风云) (codename A11) — 1.6L sedan
2003– QQ3 (codename S11) — 0.8L & 1.1L city car
2003– Cowin/Flagcloud (旗云) (codename A15) — 1.6L sedan
2003– Oriental Son/Eastar (东方之子) (codename B11) — mid-size sedan
2005– Tiggo (瑞虎) (codename T11) — 1.6L & 2.0L & 2.4L compact SUV
2006– A5 (codename A21) — 1.6L & 2.0L sedan
2006– V5 (codename B14) — 2.0L & 2.4L minivan
2006- QQ6 (codename S21) — 1.1L & 1.3L city car
2006- Karry a small panel van.
Yin Tongyao, 44, is president and general manager of Chery Automobile, s small state-controlled compnay based in Wuhu, which is about 20km west of Shanghai. In 1984 Yin earned a degree in automotive manufacturing from Hefei Industrial University. Yin drives modest Chery cars rather than foreign luxury models, and does not like to see articles about himself in the press.
The Chinese press speculates that despite its fast growth Chery is losing tons of money. Is that true?
I would have lost my job if Chery were losing money. Trust me, Chery is making money.
When will Chery begin exporting to western Europe?
We received requests from hundreds of potential importers but I had the same answer for everyone: "I am sorry, Chery is not ready to export to Europe yet. We need time." Our primary objective is growing in China, to follow the growth of our domestic market. We also have to strengthen our presence in minicars and small cars, following the Chinese government request to produce more low-emissions vehicles.
What about exports to North America?
Like our plans for Europe, we have not a firm date yet. North America and Europe have very tough and demanding safety and emission laws that our vehicles do not respect yet. We need time. We have to work a lot with our partners, Fiat Auto and Chrysler, to develop new products that in the future will be suitable for both the European and US markets.
How big is Chery today, and how big will it be in 10 years?
This year we plan to build about 400,000 units, but by the end of the year our installed capacity will grow to 600,000 units. In 10 years, I see Chery making more than 1 million units a year in China, an interesting volume indeed, but we will still remain a small player, as the big guns will make more than 10 million units a year by that time. We are still young. The first Chery prototype was built in December 1999, and the first production car rolled out in March 2001.
Chery is young and small, but it is already China's No.1 vehicle exporter. What future volumes do you expect?
Last year we exported 50,000 units, this year we plan about 100,000 units. Our three largest export markets, which get roughly the same number of cars are Egypt, Russia and Ukraine.
In November 2006, your Turkish importer, Mermerler Otomotiv, had a huge stand at the Istanbul show that announced Chery would begin exporting five vehicles to the country starting in April 2007. What happened?
Our partner is busy homologating our vehicles for Turkey. I do not know the exact date when we will start sales there. As I said before, our priority is to grow in China.
Could you provide more details on Chery's plans with its two foreign partners? Please start with Chrysler.
I do not have much to add to the joint announcement we made in July. We will work together with Chrysler to develop, manufacture and distribute Chery-made minicars and small cars in North America, Europe and other major automotive markets under the Chrysler brands. The first step will be Chrysler offering a variant of our China-built A1 in Latin America. The second step will be the joint development of new, globally competitive products based on future Chery small-car platforms for North America, western Europe and other markets. Lately, Chrysler was quite busy in building its new management organization but, as soon as everything is in place, I am confident we will successfully implement our basic agreement.
And what about Fiat?
With Fiat, we will create a joint venture to produce and distribute Alfa Romeo and Fiat vehicles in China. Our joint venture may begin operations in 2009, with an estimated annual capacity of 175,000 units a year. Right now, we are discussing where to build Alfa and Fiat models. Fiat owns 50% of the Nanjing Automobile Company in Nanjing, which is a good location for us and for our supplier network because it is just 90km away from Wuhu. Alternatively, we would need to expand our current Wuhu operation to also add production for Alfa and Fiat.
Is the Chinese government demanding that Chinese carmakers improve quality and reliability of their products?
Strongly, and not only for automobiles but for all products. As for Chery, we decided an internal, strict policy not to export any new model until it has been on sale on our domestic market for six months. Thus, in case of problems, it would be easier and faster for us to intervene. Overall, the quality of the Chinese supply base is improving, but it is not as good as it should be. Thus Chery is sourcing more from global suppliers such as Bosch, ZF, Johnson Controls, Luk, Valeo, TRW and Siemens VDO.
Chery had been looking globally for styling and engineering expertise. Could you name your main suppliers?
For styling and engineering, we are currently working with Italdesign Giugiaro, Pininfarina and Torino in Italy. On pure engineering and development, we work with Lotus Engineering and MIRA in the UK ans with Porsche Engineering in Germany and Austria. For gasoline and diesel engines, we work with AVL in Austria, for hybrid powertrains with Ricardo in the UK.
Heuliez in France has announced it would supply a retractable hardtop for a Chery model in China. Which model?
It will be the A3 coupe cabriolet designed by Pininfarina. We released some pictures of the car in April 2005.
If you could speed up something at Chery, what would it be?
Probably engine production. Our new engine assembly line is capable of 400,000 engines a year, the old one still makes 200,000. I would love to quickly reach 600,000 engines on the new line, but this takes time - and money.
Solid and steady progress. I noticed that the Chery car I am following the most, the Dodge Hornet, received no direct response from the interview.
More patience will be required. It sounds like Chery's boss has a good grip on their state of affairs and their required growth and expansion. Quality will improve with employee and engineering experience and intense focus.