It must be painful for Chery to finally acknowledge the failure of its multi-brand strategy launched in 2009. With sales dropping to 643,000 in 2011 from 682,000 in the previous year and losing 97.82 million Yuan in the first quarter of 2012, the automaker seems to realize it has no other option than axing marques and new model projects and re-focusing on the Chery brand.
In early 2009, Chery unveiled the Chery, Riich, Rely, and Karry brand lineup, targeting, respectively, the market of low and middle level passenger cars, middle level to high-end passenger cars, MPVs and commercial vans, and micro vans and trucks. Sales were projected to exceed 1 million in the following year. The plan never took off, as none of the new brands became widely accepted by consumers.
At one stage, Chery was reportedly working on over 100 new car projects at the same time, and no one, even its own employees, could tell the logic of its product lines and naming systems. Most of its sales in the last couple of years continued to come from Chery Tiggo SUV and QQ supermini, both first launched in 2007.
The key figure driving the current reform is Huang Huaqiong, who before joining Chery served in the PR and marketing departments of several automakers: Shanghai VW, Shanghai GM, Dongfeng Peogeut, SAIC, and Beiqi Foton. As a fresh face at Chery, he has frankly acknowledged the company made mistakes and helped in crucial ways to draw a new roadmap.
According to the recently exposed growth plan, only two brands will stay: Chery for passenger cars and Karry for commercial vehicles; the number of new car development projects will be reduced to below 30. This step of axing brands and product lines is to be completed in the 2012-13 period. Then in 2014/15, Chery aims to increase annual sales to 1 million, have 1,000 dealerships, and become the strongest among all native automakers. Between 2016 and 2020, with the release of third-gen models, the company targets to be “partially on the same level of competitiveness” as major sino-foreign joint ventures in China.
The long-term goal, to be attained after 2020, is to be able to compete successfully against the giants in the global market.