Chery Automobile enters silent period

Just as BYD Auto began to enter a three-year adjustment period, its own brand leader Chery Automobile will also enter a quiet period of one year.

Today, the last new car G3 launched by Chery Automobile before 2013 will be on the market, and it will enter the empty window period for model launch. Previously, Chery Automobile had launched as many as 10 models in one year and launched several R&D projects at the same time. Chery now learned to do subtraction.

The market is changing and companies should also change. Although 2013 or 2014 will be the outbreak of Chery Automobile, as Madei Ma, the general manager of Chery Automobile Sales Co., puts it, “no bullets are not good to fight”, no new models are put on the market for a whole year, facing consumers. It is always refreshing and old-fashioned,” said Chery’s car. Can it survive the “shortage of food and clothing”?

Adjustment and readjustment of the industry believes that the strategy of slowing down new cars is right. Chery Automobile has too many models. Rough statistics, Chery Automobile currently has at least 25 models or more, only QQ series, there are a variety of models such as QQ3, QQ6, QQ me, plus M1, G5, Fengyun 1, FY 2, Cowin 1, Qiyun 2, Tiggo And Oriental Son, Wei Lin and so on. However, judging from the sales data released by Chery Automobile, the Chery Automobile's product series, which sells less than 20,000 vehicles a year, includes QQ me, Oriental Sons, A1, Raychem V5, Weilin X5, Raychem G5, Raychem M1, and commercial vehicles. There are more than ten models of car ViewSonic and Ubisoft.

A distributor manager of Chery Automobile Co., Ltd. told the “First Financial Daily” that certain models launched by Chery Automobile lacked an accurate positioning and did not know who the target consumer group was, or whether it was a product that was not well marketed. After that, the name was put on the market again.

Chery’s insiders also admitted that Chery Automobile had launched new products in a fast-paced fashion, ignoring the pre-market research work for the products. As a result, many models were difficult to adapt to market demand.

Before the failure to form several competitive models, the more cars developed, the greater the investment and the higher the cost. Due to the excessive number of models and the lack of scale, the price of accessories cannot be reduced, and the development cost of a vehicle model is at least tens of millions of yuan. Although the research and development cost of a car model launched by a multinational brand is hundreds or even thousands of times higher than that of many domestic brands, these models are global models that can be used to reduce costs through the effect of scale.

Yin Tongyue, chairman of Chery Automobile, also stated that Chery Automobile had dispersed its resources in the past and now adjusted it to create a high-quality product that will achieve every product.

In fact, since 2008, Chery Automobile has been adjusting. The first is to release four brand strategies and establish high-end brands. However, the market and consumers did not give positive feedback on the high-end demands of the Chery brand. Due to sluggish sales, the Weilin Brand Division, which mainly focuses on mid- to high-end MPV and SUV markets, was eventually cancelled. The R&D investment in mid- to high-end brands also reduced the overall profitability of Chery Automobile. The high-end route of Chery Automobile was frustrated; Chery Automobile re-adjusted in 2010. The second integration, the establishment of an independent division operations; this year during the Guangzhou Auto Show, Chery Automobile once again combed the product ownership and brand positioning, the Chery Automobile brand will be adjusted to the Chery brand and the Cowin brand.

"In addition to brand adjustment, Chery Automobile has begun to adjust the R&D department. For the last R&D project, we will make measurements from various departments such as production, procurement, and marketing. If this project is difficult to make profit in the future, we will give up. Now we Several R&D projects have been stopped,” said an insider of Chery Automobile.

Industry insiders believe that Chery’s spirit as a leader in local brands continues to try and break is worthy of recognition. From product imitation to positive research and development, as well as product and brand combing, it will surely take some detours, but there are certainly two kinds of successes and failures. European and American auto brand manufacturers have had a history of building cars for over a hundred years. Make mistakes, not to mention the history of the development of a short-term independent brand car prices.

“The local brands have only developed for more than 10 years. These riffle must have passed. Chery Automobile no longer plays multi-model games. Instead, it concentrates on building each model, increasing the probability of successful launch of models and concentrating on doing things.” National passenger vehicle The joint secretary general Rao Da told reporters.

However, the adjustment effect of Chery Automobile could not be quickly revealed, which may cause investors to lose patience. Following mysterious shareholders' transfer of 33.636 million shares in Chery Automobile in August, China Huarong Asset Management Co., Ltd. and Rongde Asset Management Co., Ltd. successively transferred all 2.152% and 0.4253% of the equity interest in Chery Automobile on the Beijing Financial Exchange in early December. The above two companies simultaneously rushed into Chery Automobile in 2009, which was once interpreted by the market as a prelude to Chery’s IPO (initial public offering).

“The withdrawal of Chery Automobile from the stock market and the withdrawal of PE investors are normal. The main reason is that the transition to Chery’s breakthrough in the past two years has been unsuccessful. R&D investment has been huge, but profit margins have continued to shrink. Together with the joint venture’s downward development towards the mainland, Passenger car companies have caused great pressure, the living environment has become more and more difficult, and investment institutions have lost their patience,” said a research director of a well-known domestic fund company.

The market situation faced by high-end local passenger car companies is becoming increasingly severe.

Rao Da believes that the market share of domestic passenger vehicle products this year has dropped by 2%, and the export increase will be eliminated. The domestic market sales will be negative growth. If calculated strictly according to the accounting method, the main business of self-owned brand passenger vehicles is definitely an overall loss.

In addition to the objective environment, the current embarrassing situation of local passenger vehicle companies has a lot to do with ignoring internal strength in the past two years. "This year due to policy withdrawals, market declines, wage increases, appreciation of the renminbi, loan interest rates, rising research and development costs, and price wars, the profits of domestic passenger car companies are basically squeezed out, and they have no power to lower prices. The advanced technology that increases the cost is installed in the car," Rao Da told reporters.

The general manager of a domestic domestic passenger car company sales company told reporters that the biggest challenge faced by local passenger car companies is that the speed at which enterprises upgrade their technology and quality has not kept up with the speed with which consumers have increased their demand for the market. The impression given to consumers is still "low quality and low price."

However, as China's auto market consumption gradually matures, the demand for high-end products will increase in the future. Chery Automobile has not yet given up on its multi-brand strategy. “A large amount of R&D investment really overshadow Chery’s overall profits, but the characteristics of the thin profitability of the car determined that Chery must firmly implement the high-end line.” Yin Tongyue said in an interview with the media earlier.

The high-end routes of Chery Automobile have begun to cleverly exploit Chery Automobile completely and “restart the stove” to create high-end brands. Recently, the high-end brand, Guanzhi Brand, which has been established for four years, was unveiled. It is a joint investment of Chery Automobile and Quantum, an Israeli industrial fund company, with RMB 3.4 billion, and will be built by luxury management teams from brands such as BMW and Volkswagen. At the same time, Guanzhi's first product will be available in 2013 and exported to Europe at the same time. From the perspective of Chery Quantum's positioning, goals and management team, Qoros Automotive carries the heavy responsibility of Chery's re-entry into the mid-to-high-end market, and its architecture is also fully operational in accordance with international and independent standards.

But China's auto market has no shortage of auto brands, and the current competition is fierce. Does the market need a new auto brand? Guo Qian, chairman and general manager of Qoros, responded by saying: "The market is always saturated, and the key lies in the trend of changes in demand and tapping new market space."

In addition to viewing the brand, Chery Automobile is also seeking new joint venture opportunities. According to sources, the cooperation project between Chery Automobile and Jaguar Land Rover is in full swing, and the project will produce results as soon as the end of next year. The new domestic models are the SUV models with strong market demand. Chery Subaru's joint venture project also has a new look.

"The products of these joint ventures will probably be launched in 2013 and 2014, which will not only establish the high-end brand image of Chery Automobile, but also become a profitable dairy cow for Chery Automobile Development," Chery Automobile insiders told reporters.

The industry believes that this may be the most critical opportunity Chery Automobile, but the continuous expansion of cross-border joint venture brands, do not know whether the market can give Chery Automobile and other local passenger car companies waiting for the opportunity.

“If domestic passenger vehicle companies can improve product quality and do branding, there should be opportunities. In 2013, there may be a new wave of sales, and consumer demand in some 4th and 5th tier cities and even rural areas will rise.” Fund company research director thinks.