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Chery: 17 new models this year

By Yu Qiao (China Daily)
Updated: 2010-02-08 11:46
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Chery: 17 new models this year

China's top homegrown carmarker plans all-new or upgraded models under its four marques: the Chery, Riich, Rely and Karry.[China Daily]??


Chery Automobile Co, China's top homegrown carmaker, aims at blistering growth in sales of 40 to 80 percent this year by providing a record number of new products.

The company based in the eastern city of Wuhu said in a statement to China Daily that it will "ensure sales of 700,000 vehicles and shoot for 900,000 units" at home and abroad in 2010, up from 500,000 units last year.

As one of the most aggressive measures to reach the ambitious goal, it plans to launch 17 all-new and upgraded products under its four marques: the Chery, Riich, Rely and Karry.

The number of new models, up from 12 last year, will set a record as the most intensive year for new products since Chery was formed in 1997.

In January, Chery's sales rocketed by 157 percent year-on-year to a record monthly high of 73,433 vehicles.

The company said planned products to be unveiled this year include six new-energy models, such as an ISG (integrated starter and generator) petrol-electric hybrid, a plug-in hybrid and a purely electric-powered vehicle.

Jin Yibo, the company's spokesman, said Chery will build more domestic capacity to produce the additional models and meet future demand.

It began construction on a 200,000-unit facility in the northeastern city of Dalian last September. The company is also planning an additional domestic manufacturing base distant from its home in Wuhu, Jin said, without revealing details.

The Dalian plant will be operational in the middle of 2011 to makes cars for both the domestic and overseas markets. The carmaker now has several plants in Wuhu with a total production capacity of 650,000 vehicles a year.

China's vehicle market is widely predicted to grow by 15 to 20 percent this year from 13.6 million units in 2009.

Overseas expansion

Jin said Chery plans to build four additional overseas plants this year in preparation for a recovery in the international auto market, which was hit hard by the world's financial woes last year.

The carmaker expects to double its sales abroad to 100,000 vehicles this year, he said.

It now has a total of 11 production facilities in countries and regions including Russia, Ukraine, Egypt, Iran, Indonesia, Uruguay, Vietnam and China's Taiwan province.

Chery will also expand to additional developed markets, such as the United States and Western Europe, following its entry into Italy last year, all part of its drive to become a "Chinese homegrown brand with international competitiveness", the company said in the statement.

Last year, Chery moved nearly 20,000 cars in Italy.

Jin said the company will accelerate brand-building efforts considerably in 2010, especially for its three new badges - the Riich, Rely and Karry - which were all created last year.

The Riich targets medium and up-market sedan buyers, while the Rely offers medium- and high-end multi-purpose vehicles (MPVs) and sports utility vehicles (SUVs). The Karry nameplate is for its micro vehicles, according to the carmaker's brand strategy.

"We expect the three new brands and the Chery marque to grow in tandem this year," he said.

The company aims to increase combined sales of the Riich and Rely to 100,000 units this year from 20,000 units in 2009 while almost tripling Karry sales to 100,000 vehicles.

Jin said Chery also plans to make inroads into the truck market in collaboration with China International Marine Container (Group) Ltd (CIMC), the country's biggest container manufacturer.

The first truck made by Chery's joint venture in Wuhu with the container provider will be put on the market at the end of this year, he said.

"Our truck products have a promising market as CIMC itself will be a big customer," he added.

Stock listing

Jin said Chery still plans to launch a long-awaited initial public offering (IPO) in the first half of this year to raise money for its rapid expansion.

"However, we must wait approvals from the China Securities Regulatory Commission. Ahead of us, there are 37 companies queuing for listings," he said.

He didn't reveal the venue of its IPO or how much the company plans to raise.

Market sources said last year that Chery will seek a Shanghai listing to raise about 100 billion yuan.

Chery started preparing for an IPO four years ago and submitted documents to the regulator in the middle of 2008. The plan was delayed because of the world financial crisis and overall poor domestic stock market performance.

Related readings:
Chery: 17 new models this year Chery aims big for 2010 sales
Chery: 17 new models this year Chery to stay away from overseas buys: report
Chery: 17 new models this year Multi-brand strategy proves success for Chery
Chery: 17 new models this year Chery launches northeastern plant

As a result, the carmaker has been trying alternative ways of raising money to fuel expansion.

Last June, it netted almost 3 billion yuan by selling a 20 percent stake to several domestic private equity firms, capital earmarked mainly for its clean-energy vehicle program. In December 2008, Chery closed on a 10 billion yuan loan from China's policy lender - Export-Import Bank of China - for overseas development.

Jin said Chery's profits grew "significantly" last year from more than 1 billion yuan in 2008.

The carmaker now has a registered capital of 3.68 billion yuan.?

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