China's Chery sets its sights on the world
I was there, standing just on the fringes of the Chery booth at the Shanghai motor show, feeling a bit confused. There was one minute to go, and I didn’t have an earpiece.
At any international motor show in a country where English isn’t a first language, a radio receiver and headset are handed out to foreigners such as me. That way, we can listen in to what the presenter -usually the company president- has to say.
This time, there was none. That was odd. Maybe they thought I could speak Mandarin. Which I can’t, or at least not competently enough to follow.
But when the Chery presentation started, I found out why. They were doing it in English.
That was a first and the only one out of the many Chinese automakers at Auto Shanghai to go English for their presentation. That made it clear to me: Chery is getting ready for the world.
Chery will also transform its product lineup into new energy vehicles as part of their green and sustainable initiative.
Chinese automakers have always been focused on being as “national” as possible in China, but for their grand export ambitions, they need to be different. I imagine this must have been what it was like when Japanese automakers were first starting to reach bigger markets outside of Asia in the 1960s and 1970s, followed by the South Korean automakers in the 1990s. Now it’s China’s turn, and we’re seeing it with Chery.
But this isn’t where the story began.
THE ROCKY ROAD BEHIND
The Philippines has been an export market for Chery since 2007, but it hasn’t been smooth sailing. Chery was a pioneer when it entered in 2007, but it was followed by a couple of unsuccessful attempts by two separate distributors. The brand pretty much struck out in the Philippine market after the third attempt, leaving a bad taste in Filipino consumers.
The turn of the decade however brought out better Chinese cars from other makers who started coming in with more experienced distributors. New brands such as MG and Geely entered the market. Along with their cars came a better appreciation and acceptance of Chinese cars in the Philippines. They convinced customers that they can expect more features, more style, more quality, and at a more affordable price thanks to China’s gargantuan economies of scale.
Maybe it was time for Chery to make another comeback.
FOURTH TIME A CHARM?
We got wind of a rumor in Q3 2019 that the Chery brand was preparing another revival in the market. But instead of going for a new group, they went with a far more established and much more experienced distributor: United Asia Automotive Group Inc. (UAAGI). And in October 2019, UAAGI officially signed the agreement with Chery International.
It wasn’t smooth sailing for the new Chery Philippines either. Barely 6 months after taking over, they were faced with the global pandemic which shut down the economy and global supply chain. But UAAGI pushed forward with the Tiggo line of SUVs that gave customers more features, striking designs, more technology, improved quality, and many more.
They pinned their strategy on building customer trust through a warranty that is unheard of in the Philippines. Which other brand in the country offers a bumper-to-bumper warranty that spans either 5 years or 150,000 kilometers on the odometer? What other manufacturer dared to offer an engine warranty that spans 10 years or 1 million kilometers? And all that is on top of 3 years of free preventive maintenance service and roadside assistance.
It comes as no surprise that if we fast forward to the end of 2022, UAAGI was able to drive Chery to the number 3 spot for Chinese passenger vehicles with 3,142 units. They were also awarded "Best Booth" at the recently held 2023 Manila International Auto Show. That’s a long way from where they were before.
When we last flew to China with Chery in 2019, our minds were filled with skepticism. But in 2023, we have nothing but optimism.
Away from the hustle of Shanghai, we made our way to Wuhu; the hometown of Chery. Actually, they practically built the town; such is the effect of the presence of a major local manufacturer on the economy. If only we had something similar in the Philippines.
When we got there, we were able to speak with Jeff Liu. He handles Eastern Europe and Asia Pacific for Chery International. Liu told us that Chery has applied its learnings from nearly two decades into the “new” Chery. Before, many Chinese automakers entered foreign markets (e.g. the Philippines) only with the goal of grabbing market share and achieving volume. This straightforward bottom line wasn’t right given that the automobile isn’t a common commodity that one would buy at a department store or supermarket. A car is a purchase that involves pride and trust.
What Chery did was reframe their business to build vehicles that customers will actually be proud to look at, proud to own, and proud to drive. They’re working to build that trust through aftersales, but they’re doing more than just that.
In the same way that many Japanese, Korean, and American automakers each have multiple brands with different target customers under their respective groups, so does Chery. That’s part of the new strategy that Mr. Liu was sharing with us.
The legacy brand is Chery, the automotive pride of Anhui province where Wuhu is. That’s actually why you see a stylized A when you look at the Chery emblem on the grille. But they have since expanded to having other brands in their group with the likes of Omoda and Jaecoo; these are targeted at younger customers who live a connected and modern lifestyle. Then they have Exeed which is touted as the luxury arm of Chery.
So far, the Philippines has yet to experience the other brands under Chery International. Will the strategy work? Time will tell. If you start seeing more new-generation Chery vehicles on the road, then you’ll have your answer.
As for us, the fact that we won’t need any translations anymore for Chery International’s presentations in China says it all. The change has already started.