The Chery on top(2)

Going global

Chery is acutely aware that development for the brand means seeking global options. According to Jin Yibo, Assistant to President of Chery Automobile, the share of overseas market has taken up to 35 percent of the enterprise's total market. "Due to the restructuring of the Chinese economy and the cooling of the car market, exports declined dramatically in the past year. Despite this, Chery saw a steady growth in exports," Jin said.

In May and June this year, monthly exports of Chery exceeded 20,000 units, a record for Chinese auto exports. From January to July 2012, the company sold 112,014 vehicles in foreign markets, an increase of 26.1 percent year on year. About one third of Chinese autos exported during the first half year of 2012 were made by Chery, and it has been the biggest Chinese passenger vehicle exporter for nine consecutive years.

Chery's overseas expansion began with exporting finished vehicles. Due to high tariffs, high transportation costs, long delivery periods and boycotts in foreign markets, Chery took initiatives to localize operations by establishing joint ventures or solely invested in overseas CKD (completely knocked down) factories and providing them with technologies, engines and sales and management skills. It has built up 16 CKD factories in countries like Egypt, Uruguay, Brazil and Russia and manufactured tailored vehicles for local consumers. Chery has exported its cars to more than 80 countries and regions all over the world and established a sales and service network of 1,153 branches.

"In the process of globalization, we gradually localize the products and the working staff to deepen the cooperation," said Jin.

Taking Egypt as an example, Chery's CKD factory in Cairo was the second largest Chinese project in the country after that of Huawei, recruiting about 2,000 local citizens. An estimated 40 percent of auto parts were provided by local suppliers. And the factory had an annual production capacity of about 20,000 to 30,000 vehicles, which ranked third among all vehicle brands sold in Egypt.

Zhang said Chinese automakers like Chery had several advantages when going abroad. They have made great strides in quality, technology and management since the late 1990s.

As the biggest export destination of Chinese automobiles is emerging markets, Zhang said the value of these achievements is more profitable in overseas markets.