Is It Too Risky For Chery To Step On The Sole Agent Of Japan And South Korea?

Chery's export to the US is not the first attempt by Chinese automakers.

As early as the early 1980s, China FAW Jiefang car had landed in the United States, but failed to "liberate" the US market.

More than 20 years later, with the rapid development of China's automobile industry, China's automobile products have been spread all over the world in more than 170 countries and regions, and the automobile export also develops rapidly at an annual rate of more than 50%.

An automobile expert in Detroit said two years ago that 20 years later, Chinese cars will occupy the US market.

However, so far, the export areas of Chinese automobiles are still mainly in developing countries.

The US market is still a new area for China.

"For Chinese local companies, it is very difficult to successfully intervene in these markets."

Ai Senzhe, manager of manufacturing industry in China, Yin Zhiming told global financial observation.

Taking the low price car market as the breakthrough point, SIEMENS VDO automotive electronics (Wuhu) Co., Ltd. is a neighbor of Chery Motor Company (Chery), a company next to Chery, which provides parts and accessories for Chery.

Not long ago, the company CEO Kan Lei joined Chery and was responsible for all the cooperation affairs with Visionary Vehicles LLC as a general manager.

"All business cooperation with VV has been stripped from Chery international, and a special project team has been set up."

Jiang Sheng, general manager of Chery office, told global financial observation. "VV's lawyer has just returned to the United States, and our joint venture company is also going to approve it."

The massive export of Chery to the US does not seem to be as smooth as expected at the beginning of 2005, but everything is going on.

"At the moment, it seems unlikely that Chery will succeed in the US.

However, entering the US market will bring strategic importance to Chery. "

Yin Zhiming said, "it can improve American consumers' understanding of Chinese products.

Through the existence of such a certificate in the US market, Chery can enhance its brand awareness in the market, and in the advanced product development and business management, it will also get very good experience in the United States. "

Similarly, China the Great Wall Motor Co., Ltd., which cuts into the US market with cheap cars.

The company ranked third in 2004, but only about 100 pickup trucks exported to the United States.

"The United States is a big automobile country with relatively advanced product technology.

We can not be like Japanese companies, our brand and technology influence is not as good as other countries. "

The Great Wall automotive propaganda minister Shang Yugui told global financial observation.

Yin Zhiming believes that in developed countries, such as the United States and Europe, quality will bring success.

The situation faced by Chinese automobile is different from that of Japan and Korea Companies.

The general low price market is occupied by Japanese and Korean companies and has the quality of satisfying the market.

The price itself is not enough to make it survive and succeed in the United States.

Competitiveness should come from the design of reliable quality and unique charm.

"At this point, only cheap products will have a very low market share in the US."

He said.

The share of Korean cars in the US market has increased year by year. However, due to the lack of ready access to the European and American markets, it took KIA 20 years to escape from the shadow of "cheap and poor quality" car manufacturers.

Therefore, if China's automobile has not yet entered these countries, without proper strategies and products, it will bring negative effects in the medium and long term development, though it may also achieve some success in the short term.

The cake in the US market is big, but it is not easy to cut.

Maybe there are some middle and high-end car market, so some other Chinese automobile manufacturers have taken different approaches.

For Tianjin Qingyuan Electric Vehicle Co., Ltd., their goal is not Chery's pursuit of large exports.

In April 2005, Tianjin Qingyuan Electric Vehicle Co., Ltd., 6 Hapyy Messenger electric vehicles were also shipped to the United States.

At that time, it was called China's first motor vehicle exported to the United States.

The export of 6 Happy Messenger electric vehicles in the US was agreed in February this year.

According to the requirements of the US, the car is the family car of the United States, with a maximum speed limit of 40 km and a maximum mileage of 100 km.

During the period, Qingyuan company made three modifications to the Happy Messenger prototype car, and passed the inspection of the American customers in March 28th.

"Our electric vehicle is not cut into the market at a low price. We are targeting high-end cars in electric vehicles, targeting customers with high environmental protection requirements."

Wu Zhixin, general manager of Qingyuan company of Tianjin, told the "global financial observation".

The 6 Happy Messenger electric vehicles were exported to foreign markets for the first time.

At present, Qingyuan company can not undertake after-sales service and spare parts supply of the products, so all sales are completed by the partner Samanns sales company.

Qingyuan company is currently responsible for providing training to maintenance personnel and providing related spare parts.

"According to the contract, we have about five or six exports this year."

Wu Zhi said, "basically, the way we cooperate is how many cars the United States needs and how many cars we produce."

Qingyuan's electric vehicle market is being explored step by step, but Chongqing Lifan Group has already drawn up their export plan.

"Chinese car is the cheapest car, and it's a wrong idea for Chinese cars."

Yin Mingshan, chairman of Lifan Group, said to "global financial observation", "the car that we will export to the United States in the future is the location of the mid-range vehicle.

Medium quality, medium price, medium brand, we must accumulate brand for a long time.

"Two years later, we will start exporting cars.

The United States will become the first largest exporter of Lifan. "

Although Lifan has not yet been approved by the relevant ministries, Yin Mingshan still regards it as the future goal of Lifan.

How big is the opportunity of Chinese cars? "In the United States, most of the sales outlets are 4S shops, which requires a high level of channel management skills.

Unless there is a very strong sales partner, it will be difficult to establish a good sales channel.

Yin Zhiming said.

According to the agreement between Chery and dreamcar, the dream company will own the distribution rights of Chery's 5 new cars in North America (the United States, Canada and Mexico), and the two sides will spend a lot of money on Chery's R & D and production base.

In addition, the American dream car company will organize the dealer team according to the international standards, and establish 250 standardized car sales outlets.

Many people expressed their suspicions.

As a company that has established its own motorcycle sales network in the United States, Lifan Group has its own advantages.

"This marketing method is too risky.

Lifan will not find a sole agent. We plan to divide the US area into several zones and cooperate with different agents. "

Yin Mingshan said, "moreover, we have established Lifan American company, which has good cooperation with agents."

Yin Zhiming believes that Chinese cars should enter the US market and learn from the modern KIA company of Korea.

If China's local auto makers want to succeed, they have to be like the modern KIA.

Japanese automakers enhance their global competitiveness through very strong core and basic technology development closely linked to the supply chain.

On the contrary, modern KIA has developed the core competitiveness of system competition, that is, low price but high performance.

In addition, they have huge competitive advantages in raw material competition, such as steel plates and low-cost parts industry in Pohang, Korea.

"For a late entrant, Chinese automakers should follow the pace of modern KIA to achieve future success."

He said.

However, he also believes that, according to the development of China's auto industry, China's local auto makers will become an indispensable part of the global automotive market in the future.

The reason for this expectation is that China has low cost labor force and has accumulated good experience in the global manufacturing outsourcing cooperation.

Chinese automakers have also made considerable progress in model cars.

According to China Customs data, in 2004, the export volume of China's auto products amounted to US $8 billion 156 million, of which 406 thousand were exported vehicles (including complete sets of spare parts), amounting to 779 million US dollars; the key parts of exported automobiles were 1 billion 200 million US dollars; and the export vehicle parts were US $6 billion 176 million.

The total number of cars in export cars is 9335, an increase of 227% over the previous year, 779 off-road vehicles, 62881 travel minibus, 4782 large mobile buses and 51347 heavy trucks (the total export volume of trucks is 1/3 of the total vehicle export), and the number of special purpose vehicles is up to 275186.

Export countries reached 173 countries (regions), an increase of 12 countries (regions) over the previous year.

The total amount of exports in countries and regions above US $30 million is 5, namely, the United States, Syria, Algeria, Kazakhstan and Hongkong, China.

However, "with the increasingly fierce competition, for the newly entered Chinese players, the US market will be a difficult land."

Yin Zhiming said.