Chery Auto Case Study

Contents

Background of the company 3

Growth of the company 3

Chinese automotive industry 3

External Environment Analysis 5

Business Strategy 5

Internationalization 6

Competitive landscape 8

Chery automobile - During the recession 9

Chery automobile - After recession 10

Exhibits 11

References: 15

Background of the company

Chery Automobile Co. Ltd is a government owned automobile manufacturing company in China founded in the year 1997.The product portfolio of Chery consists of 15 models which includes minivans, passenger cars and SUVs including the QQ compact, the A5 sedan, and V5 crossover. It also offers full electric and hybrid models. The exports of Chery account to 25% of its total production and it is the

Chinese products were perceived as of low quality. Apart from that, there were logistical, servicing and duty issues as well for the imports to America. Chery felt that key partnerships offer resources and expertise to improve manufacturing quality. Even after lot of entry barriers, Chery Automobile recorded good growth since its inception. In the year 2006, Chery had sales volume of 3,05,200, 62 % growth compared to the last year with a market share of 7.2 % of Chinese automobile market thereby showed strength in an industry which was long monopolized by Chinese foreign jointly funded brands. Sales figure of Chery is displayed in exhibit

The aim was to gain stability from domestic sales and strengthen its position via overseas expansion. In 2001, it had its first international success. They had sold 10 units of its Fengyun- its first domestic model to a Syrian dealer. In 2003, Chery Motor Co. became the first Chinese company to open a foreign production facility when it began manufacturing several models in Iran. Some more plants were opened, in Russia in 2005 and Malaysia in 2006. By the end of 2006, Chery had exported its products to 67 countries and regions. In April 2011, it became China’s first auto maker with exports of over 500,000 units. Chery has placed equal attention to the innovation and R&D. Since, 2003 it has applied and received 2452 patents at the State Intellectual Property Office of China. Chery’s success in domestic and international markets can be attributed to persistent international cooperation. Right from designing motor engines to production lines, it collaborated with firms from technologically advanced countries. The skill set acquired over the years via collaboration transformed Chery into successful car design maker firm. As a result, two models introduced by, QQ and Fangyun dominated Chinese passenger car market. Chery’s principal objective behind entering overseas market was to improve technological capabilities through a network of international collaboration. Chery established a series of