27 October 2004

The first Chinese manufacturer could be selling cars in Europe within five years. Chery, China’s third-biggest independent car maker, has contracted Pininfarina to engineer new small, medium and large car platforms, and design at least six body styles to be built on them. All must meet future European and North American emissions, economy and crash regulations.

Chery is in ‘advanced negotiations’ with several Eastern European states to build a factory from which to launch the new cars. The company plans to target fast-growing sectors and its new line-up will include an SUV, midi- and full-size MPVs, small and medium hatches and a large saloon. It intends to position itself as a new European ‘value’ brand, undercutting Korean and Malaysian makers with a sub-£4000 entry price.

Speaking exclusively to Autocar, the first Western car magazine to visit its factory, Chery’s head of engineering and research Xu Min (right) said, ‘We have a clear plan to enter Europe and North America and our new cars are being engineered for that purpose. It will take us some time to meet European quality expectations and to compete with the established giants, but I hope we won’t have to wait as long as five years.’ ‘It took the Japanese and Korean makers 10 years to establish their brands in Europe and we plan to accelerate that process, too. But if our products are not ready, we will not damage our brand by entering these markets too soon.’

The first Pininfarina-designed cars are likely to premiere at next year’s Shanghai Motor Show and go on sale in China by the end of 2005. Chery is already the first Chinese car manufacturer to make significant exports, selling 10,000 cars in the Middle East and North Africa, and the first to build an overseas factory. Its Iranian plant is about to open and plans have been finalised for factories in Pakistan, Egypt and Venezuela.

This year it expects to sell around 150,000 cars, making it bigger than Jaguar or MG Rover. Within five years most analysts expect sales to be closer to Daewoo’s 400,000.Chery currently makes the QQ, a Daewoo Matiz clone (gallery), two Seat Toledo-based saloons and the Oriental Son (above), a luxury saloon designed and engineered in-house. Its T11 SUV is also about to be launched.

‘Chery’s top management is very experienced and well respected,’ says industry analyst Michael Dunne of Automotive Resources Asia. ‘They have first-rate equipment and processes, but competing directly with the global competition will be a major challenge.’

Read Ben Oliver on China's burgeoning motor industry in Autocar

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