[car home News] The Guangzhou Auto Show at the end of November was the last large-scale auto show in China this year. Many domestic and foreign manufacturers brought the latest and hottest products at this auto show, and Chery also brought 11 models of its two series, Arrizo and Tiggo, to this auto show. At the same time, on the other side of the globe, Chery also brought a strong lineup at the Sao Paulo Auto Show in Brazil. (|), Tiggo 5x, Tiggo 7, Tiggo 8 and four new energy vehicles made their local debut at the same time, which can be said to be Chery’s biggest exhibition in South America.
South America is an important and representative market for Chery. In Brazil, Chery has established a joint venture company with CAOA, the largest local automobile manufacturer and seller. Since the establishment of the joint venture company, Chery has shown a strong upward trend in Brazil. In other South American markets, such as Chile, Chery sells through cooperation with SKBERGE, the general agent. At present, it has ranked in the top 20 among more than 70 brands in the Chilean market and maintained a certain growth momentum. In November, car home started filming the series of documentaries "China Brand Going Out", and the first visits were Brazil and Chile. Starting today, we will talk to you about Chery’s development in Brazil and Chile in words. At the same time, let’s look forward to the official launch of the documentary "China Brand Going Out" in January.
Introduction to the essence of this article
★ How big is Chery’s overseas territory? Export first in 15 years, covering more than 80 countries and regions;
★ Chery’s dream in Brazil is not only the first brand in China, but also the long-term goal of catching up with modernity;
★ Tiggo 2 has been listed in the top 15 SUVs for more than half a year, and more than 7 models of Tiggo 5x and Tiggo will land;
★ Dealers are completely innovated, switching from Chery standard to Chery Kao standard;
● Chery’s overseas territory: the export sales volume ranked first for 15 consecutive years, covering more than 80 countries and regions.
As a China brand that went abroad earlier, Chery’s overseas business has achieved sufficient development. According to the information we obtained from the government, the sales of Chery Automobile have covered more than 80 countries and regions overseas, and more than 1,300 sales and service outlets have been established overseas. In 2001, Chery officially entered the Middle East market, which opened the prelude to its entry into the international market. At present, it has accumulated more than 430,000 users. In Latin America, Chery has entered Brazil, Chile, Argentina and other countries. In addition, Chery has been operating in markets such as Russia, Ukraine and Egypt for many years.
In addition to pure export, Chery has set up 10 KD factories overseas, which are scattered in Russia, the Middle East, North Africa, Southeast Asia and South America. At the same time, it has set up three R&D centers in Europe, the Middle East and South America, which are responsible for the localization development of models.
Although Chery can’t be said to be the first China automobile brand to go abroad, it has firmly established its first position in overseas sales. From 2001 to the end of 2017, Chery’s total overseas exports have exceeded 1.3 million, of which 107,727 new cars were exported in 2017, up 22.3% year-on-year, ranking first in China brand passenger cars for 15 consecutive years. According to the official data released by Chery in December, Chery exported 10,675 vehicles in November and 118,017 vehicles from January to November, an increase of 18.7% year-on-year, which has exceeded the export volume of last year.
Chery’s achievements are worthy of recognition, but this does not mean that we can sit back and relax. Although it won the top spot among China brands, Chery still has a long way to go compared with mainstream overseas brands, especially Japanese and Korean brands, which are the most directly competitive.
● Brazil: New attempts bring a new beginning to Chery.
The goal is to compete with Hyundai in the Brazilian market.
Chery’s story in Brazil can be traced back to 2009. As the largest automobile market in Latin China and one of the most important emerging automobile markets in the world, Brazil has attracted many American automobile companies, and Chery has also built the first China automobile manufacturing plant there. However, the instability of the Brazilian market has caused the China brand to stumble locally. Due to political crisis, economic downturn and many other factors, the total sales volume of Brazil’s auto market in 2016 fell by 19.8% year-on-year, and the overall sales volume was the worst year in more than a decade. The weak China brand has become a "victim" of the market volatility. Chery’s local sales fell by 42% in 2015 and 63% in 2016.
In November 2017, for the development of Chery in Brazil, it is a node that may go down in history. Chery announced the establishment of Chery Khao with Khao Group, which is the first Sino-Pakistani joint venture. Kao Group is the largest automobile dealer in Brazil and even Latin America, and Hyundai’s success in the local area can’t be separated from Kao’s help.
Hyundai once entered the Brazilian market around 2004, but withdrew in two years. The second time it entered the market, it chose to cooperate with Khao. When Hyundai first entered the Brazilian market, consumers’ cognition of it was the same as that of the current China brand, and they had doubts about the product quality. Thanks to the joint efforts of Kao and Hyundai, Hyundai finally reached its current height and became the top five in the Brazilian market.
So, what is Chery’s goal in the Brazilian market? He Weibin, Marketing Director of Chery Kao Automobile Company, said, "According to our current performance in Brazil, our sales volume has surpassed Kia, but in fact our highest goal is definitely Hyundai, and we hope to compete with Hyundai." It is no longer Chery’s concern to be the first brand of China in Brazil. It is Chery’s long-term goal to compete with Hyundai.
Tiggo 2: It feels good to be noticed by other brands.
In the Khao era of Chery, the brand-new QQ of mini-car was preserved. This car was also the first car that Chery put into production in Brazil that year, and it had a certain popularity. In April, 2018, Khao Chery ushered in the truly heavy model after its establishment-Tiggo 2, which is the domestic Tiggo 3x.
Regarding the achievement of Tiggo 2, He Weibin, the marketing director of Chery Kao Automobile Company, admitted in a dialogue with car home that the market performance of Tiggo 2 exceeded expectations. He mentioned, "In about half a year, the monthly sales volume of Tiggo 2 has exceeded 1,000. The monthly sales of more than a thousand can basically reach about 10 in the SUV. " In October, the sales volume of the Tiggo 2 was 1,045 vehicles, and it ranked 12th in the SUV market in that month, ranking 21st in the whole year. You should know that this car was only listed in April.
The success of this car has also attracted the attention of competitors. He Weibin told us a short story: the marketing manager of Chery Kao learned from his peers that Peugeot and Ford basically didn’t pay attention to Chery before, but Tiggo 2 seized the market share of Peugeot 2008 (about 1,000 vehicles per month) and Ford Wing Bo (about 3,000 vehicles per month) after its listing, and now the two brands have begun to formulate corresponding marketing strategies for Tiggo 2. He Weibin finally said frankly, "This feeling of being concerned by others is still quite good."
With the help of Tiggo 2 and brand-new QQ, the overall performance of Chery brand in the local market has also made significant progress. Only from the passenger car market (car +SUV), Chery’s sales in October have ranked 13th, surpassing Mitsubishi and Kia. In the coming year, Chery’s goal is to surpass Mercedes-Benz, Citroen and Peugeot, and its ranking can rise to around 11.
Arrizo 5, Tiggo 5x, Tiggo 7 and Tiggo 8 will all land in Brazil.
During the Sao Paulo Auto Show, Chery officially announced the price of Arrizo 5 in the local market, 65,990-72,990 Brazilian reais, about 11.64-128,700 RMB. Next, Tiggo 5x and Tiggo 7 will be sold in Brazil in December and January 2019 respectively. During this auto show, the Tiggo 8 was officially launched in South America, and this car is expected to be listed locally in the second half of 2019. By then, Chery will have a product lineup of two cars and four SUVs in Brazil.
In addition, CARLOS, chairman of the Kao Group, also mentioned in the dialogue that Chery’s high-end brand EXEED will also enter the Brazilian market in the future, focusing on the high-end market. He Weibin predicted that with the listing of various products, Chery’s expected market share will reach 1.5%-1.7% by the end of 2019. According to the data in October, this market share will surpass Peugeot and Citroen, making Chery rank behind Nissan.
There are so many new cars released at the Sao Paulo Auto Show, and it is also inseparable from the improvement of Chery’s booth area. Previously, Chery’s booth area was only about 400 square meters, and this year’s auto show has been upgraded to 1,500 square meters, which is basically consistent with local first-line brands such as Fiat, Chevrolet and Volkswagen, which also makes Chery’s booth qualitatively different from previous years. In addition, with the visit of Brazilian President michel temer, it can be said that Chery staged its biggest exhibition at the Sao Paulo Auto Show.
● Dealer: From Chery Standard to Chery Kao Standard.
All along, Chery’s 4S stores in Brazil are operated according to Chery’s overall standards, and these 4S stores also constitute the initial impression of Brazilian consumers on Chery. Chery’s current achievements are inseparable from the efforts of these dealers.
For example, in Sao José dos kamps, near the location of Chery’s Caao company, there is a star 4S shop of Chery, which has won many orders because it can provide excellent service. If a customer comes to the store to see the car, but doesn’t have time to test drive, the store will write down the address of the other party’s work or home, and drive the car in person for a test drive at the convenience of the customer. Good service has won the trust of customers. The person in charge of the store said that the store will be doubled in the near future. We can also see that the dealers still have some confidence in Chery.
The change is still in progress, and Khao Chery thinks that the old dealer standards can’t completely match Chery’s brand image in Brazil. He Weibin said, "We used to sell mainly QQ, which is an entry-level model. After the models such as Arrizo 5, Tiggo 7 and Tiggo 8 are listed, our product line will be more quality and higher-end, and the change of models is also the reason for us to upgrade dealer standards. " In Sao Paulo, we saw the first 4S store adopting new standards. In the future, new 4S stores will be established according to the new standards, and more than 50 existing 4S stores will be fully upgraded within half a year.
The brand-new 4S shop standard was created by the Qao of Chery, which fully combined the suggestions of Chery and Qao, and the latter’s full understanding of the Brazilian market was also the primary reason why Chery chose to cooperate with it. The colors of black, gray and red are not only reflected in the decoration of the store, but also all the details of the staff’s clothes and lanyards strictly abide by the same standards. "Just to give consumers a sense of high quality," He Weibin said.
Regarding the number of dealers, Chery currently has 51 4S stores in Brazil, of which 25 are old stores before the establishment of the joint venture company and 26 are new stores after the establishment of the joint venture company. Although these 51 stores cover most states, there are still many blank areas. He Weibin said that by the end of this year, the number of dealers will increase to 65, and by the end of 2019 it will reach more than 100. For reference, the number of Peugeot 4S stores that Chery is determined to surpass next year is 90-100.
● The factory that originally produced modern products will also switch to Chery.
In the external publicity, Chery has two factories in Brazil, one of which is Jacarei factory near Sao Paulo, which was established by Chery in that year and is now owned by Chery Kao. The factory has three processes: welding, painting and final assembly. Because of the cost, there is no stamping production line, and stamping parts will be directly transported from China to Jacarei factory.
At present, Jacarei factory produces three models, namely brand-new QQ, Tiggo 2 and Arrizo 5. In terms of specific production capacity, He Weibin said, "The average output of the factory is about 68 vehicles a day, and the monthly output is 1,300-1,400 vehicles. The planned annual production capacity of the factory is 50,000 vehicles."
Next, Tiggo 5x, Tiggo 7 and other models will also be produced locally, but they will not be put into production at Chery Jacarei factory, but at the Anapolis factory near Brasilia. The latter is currently producing two best-selling modern Creta(ix25) and HB20 models, and we understand that this factory has already started preparations for the production of Chery.
Low hope is full, the road ahead is long.
Only by reaching the top ten can we achieve phased results.
In the eyes of Chery people, Chery’s development in Brazil is divided into four stages. The first stage is the general generation mode, the second stage is to recover the general generation right to operate independently, the third stage is to realize local production, and the fourth stage is joint venture operation. In Chery’s three-step strategy of going out, going in and going up, I think it is still in the stage of going in. However, from the outside world, before and after the establishment of the Chery Kao joint venture company, it may represent two different times of Chery in Brazil. Before the joint venture, Chery made a long attempt in Brazil, which had both the joy of success and the pain of failure. After the joint venture with Khao, Chery, together with the most experienced and channel partners, launched a new round of charge to the market. Tiggo 2 is a good start for the young Chery Kao. With the introduction of follow-up products, the test of the joint venture company has just begun.
"October car +SUV sales of various brands"
The road ahead is still long. Although Chery has been able to rank among the top 15 in Brazil and will continue to sprint 11th next year, the gold content in the ranking is not as high as expected. Looking at the Brazilian automobile market (car +SUV), the best-selling brands are Chevrolet, Volkswagen, Fiat, Ford, etc. According to the October data, Chevrolet’s monthly sales can reach about 40,000, and most of the top ten brands can achieve monthly sales of more than 10,000, and finally Nissan can sell 8,000 vehicles per month. On the other hand, Peugeot, which ranks 11th, has a monthly sales volume of less than 2,000 vehicles. It can be said that there is a clear watershed between the top ten and the brands ranked behind. Therefore, for Chery, it is not a success to surpass Peugeot to become the 11th place, and it is only when it can reach the top ten clubs that it can achieve phased results.
Brand recognition is not high.
The popularity and recognition of China brand in South America is not very high, which is also the dilemma faced by Chery. We had a random conversation with several taxi drivers on the street, and each other said they didn’t know or understand the brand. We can also see that Chery is trying to change this situation, whether it is a brand-new standard dealer or a club established by many local car owners, it will play a leading role in brand communication and image enhancement.
Who gets a small car wins the world?
The characteristics of the Brazilian market are very distinct, and miniaturized products are deeply loved by consumers. Looking at the local sales rankings, the top sales of passenger cars are all-in-one small cars, such as Chevrolet Onix, Hyundai HB20, Ford Ka, Volkswagen Gore /Polo and Chevrolet Prisma. The reason why Tiggo 2 can make a good start is also due to the positioning of its small SUV. In Brazil, we can say that small cars win the world.
Compared with Chery, the small car strategy of the first group brand is more flexible and targeted. For example, Chevrolet’s two best-selling cars, Onix and Prisma, are special models, and Fiat and Volkswagen are also building new cars for the local market. If Chery wants to further expand its achievements in the small car market, it needs not only the support of market strategy, but also more flexible response at the product level. Next, Chery’s models launched in Brazil are all developing to a higher level, especially the following Tiggo 7 and Tiggo 8. How to make consumers accept these higher-level products also requires manufacturers to spend more brains.
● Full text summary
Although Chery faces many opportunities and challenges in the future in Brazil, we have to admit that the joint venture between Chery and Khao is an appropriate choice. Chery, which just entered Brazil nine years ago, may be regarded as a green-headed person who dares to rush and fight. It has made achievements and met with a rebuff. Now Chery in Brazil, let us see a more mature brand, and join hands with local giants to seek a win-win situation. This is a brand-new beginning for Chery’s business in Brazil, and it also gives Chery the opportunity to pull more products to distant Brazil and Volkswagen, Hyundai and Ford for more direct killing.
Fighting with competitors is inseparable from excellent products. Chery, as one of the representatives made in China in Brazil, will launch a new round of attack on its rivals. We are also pleased to see that China manufacturing is increasingly recognized by overseas consumers. Next, Chery will face numerous challenges. What I can be sure of is that Chery’s pace in Brazil will be more solid than before. (Text/car home Chen Hao)
