In: Business and Management

Submitted By tokra
Words 1884
Pages 8
Thomas D. Lairson
Forthcoming in Wenxian Zhang and Ilan Alon, (eds.) A Guide to the Top 100 Companies in China, Edward Elgar, 2010.

Chery Automobile Company Chery Automobile Co. Ltd. (奇瑞汽车股份有限公司) is one of the most important of Chinese automobile manufacturers. Though it remains owned by the local government of Wuhu, and is by no means the very largest of China’s car companies, Chery has been able to compete effectively in a very crowded domestic market and has established a significant position in international markets. This is rather remarkable for a firm founded in 1997 in a very poor province not known for economic innovation.
Historical Development By Western standards, Chery is an unusual firm. It is the result of the hybrid nature of many Chinese businesses, combining government ownership and effective and competitive management. Quite simply, Chery exists because of the entrepreneurial efforts of government officials – known as the “Eight Guardians” - in a relatively small Chinese city looking to expand the economic base of their area and spurred on by the dramatic economic growth happening all around them. By the mid-1990s economic reform had led to fifteen years of rapid growth concentrated along the eastern coat of China. A second stage of growth extending these opportunities across the entire nation began in 1993. The Wuhu government, with support from the Anhui provincial government, was in the best position to define a new economic direction for the area and establish firms able to operate in the new market economy. The municipal officials purchased an automobile engine assembly line and engine technology from British Ford in 1996, attracted a number of entrepreneurial engineers from FAW-Volkswagen, and combined a set of auto parts companies already owned by the Wuhu government to establish the predecessor to Chery in 1997. Skirting…...

Similar Documents

Business Level Strategy

...Case Study I: Chery Automobile Company Situation Analysis Chery Automobile Company, an inexpensive car manufacturer attempt to expand its capacity and enter into a developed country with an expectation to be strong enough to compete internationally and become a global car maker. SWOT Analysis |Strengths |Weaknesses | | | | |Inexpensive car |Un qualified workforce in middle management | |Achieve low cost strategy |Sales satisfaction and customer service are below the industry | |Partner with a global automobile company like Chrysler |standard | |Strong relationship with suppliers |Imitation rather than Innovation | |Strong position in domestic market | | |Opportunities |Threats | | | ...

Words: 847 - Pages: 4

Marketing Memory

...2008 Chery Automobile: Vying for a Piece of the American Pie On the 4th of July 2007, while many Americans were attending Independence Day parades and patriotically celebrating the birth of their nation with family and friends, Yin Tongyao, president and chairman of Chery Automobile Company, was rejoicing over a historical deal he had just struck with the Chrysler LLC. The agreement, ratified at the Diaoyutai State Guesthouse in Beijing, was the first of its kind. It established an alliance whereby Chrysler would sell cars in the United States under the Dodge brand that would be completely manufactured in China by Chery. Yin had told the press earlier that day that he was “prepared to work with the Chrysler Group to expand their small-vehicle lineup with competitive products and accelerate both companies’ international competitiveness.”2 Yin’s elation was short-lived as his head started spinning with questions. He knew that the ten-year-old Chery was just weeks away from rolling out its one-millionth car, and he wondered which opportunities lay ahead for the relatively young automobile manufacturer. Chery was already exporting successfully to over fifty countries, but Yin had his sights set on the lucrative U.S. and European markets. Was this strategic alliance with Chrysler the best strategy for reaching them? How could Chery leverage the Chrysler deal while still staying true to its own goal of becoming a world-class automobile manufacturer? Chery......

Words: 490 - Pages: 2


...Brilliance China, and Shanghai Chery (Xing, 2002). 21 Since the last round of investment, it appears that the Chinese auto market is becoming the front line of global competition for international auto giants. Meanwhile, multinationals will also have to contend with local players that are launching new models and competing for supply network, and who are competitive in terms of both cost and versatility. Tables 1 and 2 show major car producers in China and their geographical locations. By the end of 2003, China’s auto production capacity approached 3 million units and is expected to reach 7 million in 2006 (Jing, 2005). Table 1 Production capacity in provinces, 2003 Province Capacity(units/year) Shanghai 810,000 Jilin 340,000 Liaoning 230,000 Sichuan 205,000 Hubei 180,000 Guangxi Zhuang 150,000 Zhejiang 150,000 Beijing 145,000 Jiangsu 130,000 Guangdong 120,000 Tianjin 120,000 Shandong 100,000 Fujian 80,000 Anhui 60,000 Hainan 50,000 Shanxi 50,000 Heilongjiang 30,000 Henan 30,000 Guizhou 10,000 Total 2,990,000 Note. China Automotive Yearbook, 2004. 22 Table 2 Major car producers and capacities in China, 2003 Producer Beijing Hyundai Beijing Jeep Chang'an Ford Chang'an Suzuki Dongfeng Honda Dongfeng PSA Dongfeng Yueda Kia Dongfeng Yulong FAW Chengdu FAW-Hainan FAW-Toyota FAW-VW Geely Guizhou Aviation Ind. Harbin Hafei Hunan Changfeng Jiangsu Nanya Jiangxi Fuqi Jiangxi Suzuki Jinbei Brilliant Jinbei General Motors Rongcheng Huatai SAIC Chery Foreign Partner......

Words: 30906 - Pages: 124

Strategic Management and Leadership

...Questions: 1. How did Chery Motor Co. device a strategic quality change process to improve the organizational performance to compete with the leading global competitors? Evaluate the implication of the change process and design systems to monitor the implementation. (AC 3.1, 3.3 & 3.4). Answer: Chery Motor Co. started off quite small and had licensing issues to sell automobiles outside of their province. In order to compete with global competitors they had to build: i. A strong domestic market for which they required retail license. They achieved this by allowing purchase of 20% ownership by Shanghai Automotive Industry Association in 2001, which allowed the small firm to utilize the SAIC retail license. Their first car export was to Syria in 2001. ii. Once they went international they invested in founding a research institute to improve the production quality, technology, and performance. It has two domestic R&D centers and invests around 7% of its total revenues in product development. They also hired a number of Japanese automotive consultants to assist the auto company in achieving the six sigma/ lean process standard to their Japanese/Western competitors. Not only did this improve their production processes but Chery was also granted ISO/TS 16949:2002 production qualities by 2005, the strictest international production quality certification available. This brought the company in conformance with the international standards of safety, reliability, and serviceability...

Words: 2606 - Pages: 11

Case Study

...have continued to rise, total profits as a percentage of sales have not kept pace. Exhibit 1 shows summarized income statements from 2009 through 2013. EXHIBIT 1 R&D Electronics Income Statements for 2009 to 2013 2009 (000) $200,000 (130,000) 70,000 (14,500) (37,500) $18,000 2010 (000) $210,000 (138,600) 71,400 (15,200) (39,400) $16,800 2011 (000) $212,000 (142,040) 69,690 (15,785) (39,335) $14,840 2012 (000) $220,000 (149,600) 70,400 (17,220) (39,980) $13,200 2013 (000) $230,000 (158,700) 71,300 (18,305) (41,495) $11,500 Salesa Cost of goods sold Gross profit Warehousing & Shippingb General & Administration Net income a Exhibit 2 contains financial data for specific customers (i.e. General Motor Vehicles, Harrington Industries and Chery Motor Vehicles) At first, R&D Electronics top managers believed that as long as sales growth remained positive, any problems with profits would surely work themselves out. Unfortunately, that has not happened: even though sales have risen, profits have fallen. Selling expense has averaged about 10 percent of sales. Half of this amount tends to be sales salaries and commissions. Because R&D Electronics incentive plans relate primarily to sales and market growth, marketing personnel are paid a base salary plus commissions based on dollar volume of sales; most marketing employees generate about 80 percent of their earnings through sales commissions. R&D Electronics management believes that support for customer sales is critical to......

Words: 3174 - Pages: 13

Chery Auto Case

...Chery Auto's Success Story (BSTR 377) ------------------------------------------------- Abstract: China based Chery Automobile is one of the top ten car manufacturers and the leading exporter of cars in the country. Started as an automotive company by the Wuhu government in 1997, Chery designed engines for cars. After finding no buyers for its engines, it decided to build its own car. Chery entered into tie-up with another automotive company which had license to sell cars to retail customers in China. After obtaining its own license, Chery implemented a four-phase strategy to develop its technical strengths. Chery started exporting cars as early as 2001 and became the largest exporter of cars among the Chinese car companies. Chery expanded globally to have its presence in over 70 countries by 2009. | | ------------------------------------------------- Issues: » Study and analyze the competitive strategies of Chinese automobile companies. » Understand how Chery Auto used available resources effectively to manufacture cars. » Examine how a startup company could develop R&D capabilities by collaborating with other firms. » Study the globalization strategies of Chery Auto. » Evaluate the challenges faced by Chery Auto in the near future. ------------------------------------------------- Contents:   | Page No. | Introduction | 1 | Background Note | 2 | The Growth Strategy | 3 | Going Global | 5 | The Challenges | 7 | The Road Ahead |......

Words: 1815 - Pages: 8

Im 375 Besides, organizational learning is another circumstances that enter and into a joint venture to learn foreign knowledge about the business and skill from another partners. This report has considered several reasons why one succeeded and other one failed of the companies. Daimler Chrysler faced the impact of cultural differences that causes Daimler failure on IJV performance. Language barrier always be the problem of communicating. Moreover, lack of management is one of the failure reasons for Daimler due to the ineffective leadership of the president. Poor management with human resource management can be the main reason of failure. Chery Jaguar Land Rover, the human resource management is providing high standard of service and also attracting talented people to stay is the key success of the organization. The management skill of Chery Jaguar Land Rover is a high top quality management. It is recommended that managers and the partners of Daimler Chrysler must improve the communication skills to understand each other. Communication skills such as face to face communicating can help both sides to solve the problem of conflict because the more you communicate. In addition, they are more comfortable and confident to use own languages and accent to communicate with other people. Furthermore, Daimler Chrysler should find a potential president with effective leading skills and having an early planning on how to manage IJV in different cultures countries. Training and......

Words: 371 - Pages: 2

Market Analysis for Chery Automobile

...Chery Automobiles International Business Project Report 2014 Prepared by: Group 8, Section B Megha PGP17/093 Swati PGP17/117 Shreya PGP17/113 Umang PGP17/121 Ved PGP17/123 Contents Background of the company 3 Growth of the company 3 Chinese automotive industry 3 External Environment Analysis 4 Business Strategy 6 Internationalization 6 Competitive landscape 8 Chery automobile - During the recession 9 Chery automobile - After recession 10 Exhibits 11 References: 15 Background of the company Chery Automobile Co. Ltd is a government owned automobile manufacturing company in China founded in the year 1997.The product portfolio of Chery consists of 15 models which includes minivans, passenger cars and SUVs including the QQ compact, the A5 sedan, and V5 crossover.  It also offers full electric and hybrid models. The exports of Chery account to 25% of its total production and it is the largest passenger car exporter since 2003. Chery has manufacturing facilities in China and their assembly operations are in around 15 countries. It has factories in Ukraine, Egypt, Uruguay, Syria, China, Iran, Indonesia, Malaysia, Thailand, Brazil, Taiwan, Venezuela, and Vietnam. Apart from that, Chery also focuses on new product development and its R&D expenses accounts to 7 % of total revenue. Growth of the company Due to certain quality issues faced by the auto exports from China, expansion plans of Chery have been challenged. Chinese products......

Words: 3636 - Pages: 15

Intellectual Property in Automobile Industry

...8 In 2004, General Motors (GM) filed a lawsuit against China’s Chery companies but also jeopardizes the health and safety of consumers. Counterfeit and Gray Market automotive components account for 3.2% of global counterfeit trade, amounting to losses of $16 billion for the automotive industry every year. Research conducted by Frost and Sullivan suggests that number is growing at a rate of 9 to 11 percent The European Union annually.6 estimates that 5-10 percent of all replacement automobile parts in circulation are counterfeit.7 A recent study by the Commercial Times found that 56% of vehicle users in China, the nations 3rd largest automotive market, have found counterfeit parts on their vehicles. Automobile Co. for alleged piracy of a mini car developed by GM’s South Korean affiliate Daewoo. GM’s investigation showed that the two vehicles share almost identical body structure, exterior design, interior design and key components. At the time the suit was filed, sales of GM’s Spark in China significantly trailed sales of Chery’s QQ, largely due to a later launch date and higher prices.9 It is believed that early in the Spark’s development, sensitive design data was compromised and ‘acquired’ by Chery. Chery then used this information to build an almost identical vehicle without investing the recourses, time and money, typically 5 required to develop such a vehicle. Consequently, Chery is able to offer their vehicle to the Chinese market at a......

Words: 3125 - Pages: 13

Chery Auto Success Story

...The Growth of Independent Chinese Automotive Companies (Second Draft for Discussion) Jianxi Luo May 6, 2005 International Motor Vehicle Program, MIT Index 1 Overview of Current Chinese Automotive Industry……………1 2 The Burgeoning Independent Chinese Auto Companies………9 3 Case Study: Chery Automobile Company………………………14 3.1 Introduction………………………………………………………… 14 3.2 Characteristic Analysis…………………………………………….. 18 3.2.1 3.2.2 3.2.3 3.2.4 3.2.5 3.2.6 Technical Capabilities………………………………………………….18 Production Management……………………………………………….24 Product Characteristics……………………………………………….. 25 Intellectual Property…………………………………………………... 29 Exportation Strategies……………………………………………........33 Enterprise Culture…………………………………………………….. 36 3.3 Comparative Analysis ……………………………………………....36 4 Conclusions………………………………………………………. 42 References…………………………………………………………….47 1 Overview of Current Chinese Automotive Industry China’s first automobile manufacturing base, FAW (First Automobile Works), was built 50 years ago. From then on for over 30 years, there was no big progress in the Chinese automotive industry on both production and technology sides. Production capacity was low, and technology was outdated. From the middle 1980’s, with the establishments of joint ventures, the Chinese automobile industry began to develop faster than before. So far, all of the world's major automakers, such as General Motors, Toyota, Ford, Volkswagen, DaimlerChrysler, Nissan-Renault, PSA Peugeot Citroen,...

Words: 15842 - Pages: 64

Chery Motor Case Discussion

...Chery Motor Company Instructor: Dr. Deena Burris Global Management 398 Amanda Holst 921128 Fall 2015 Introduction Chery Motor Company was founded in 1997 to support the local economy in the underdeveloped Chinese province of Wuhu. Chery’s lack of proper licensing made it impossible for the company to sell automobiles outside the province. In 2001, a 20% share of Chery was purchased by Shanghai Automotive Industrial Association, which allowed the small firm to utilize their retail license and begin its expansion. Also in that year, Chery exported cars to Syria and was then the first company to export cars to the mainland. Chery expanded and was highly successful between 2000 and 2006, when their automobile sales increased by 303,000 units, making them the 3rd largest domestic auto company. To maintain this growth on the global automotive market, Chery has implemented a range of competitive business strategies. Competitive Strategies Chery has followed their guiding principle of “stabilizing through the domestic market, strengthening through the overseas market and developing the domestic market through the overseas market in a flexible way.” Their ‘going out’ strategy lead to the company becoming the first car enterprise exporting complete automobiles to foreign countries in China. Chery Motor Co has implemented a cost leadership strategy to establish and defend their desired strategic position. A cost leadership strategy is an integrated set of actions taken to......

Words: 1413 - Pages: 6


...delivering the highest levels of consumer comfort, safety and convenience at competitive costs. Today’s global vehicle producers want design partners who are quick, innovative, reliable and responsive to change. They expect high quality and cost competitive products & services all delivered from a flexible and proactive business partner. What they want, Futuris delivers. Globally. Futuris is proud to create “the beauty within” for many of the world’s leading automotive brands, including GM, Ford, Toyota, Chery, Daimler, JAC and others. Copyright © Futuris Automotive Interiors. All Rights Reserved. Futuris Automotive Interiors is 100% owned by Elders Corporation, a leading and publicly listed Australian diversified industrial. Futuris Automotive Interiors is part of the Futuris Automotive Group, which includes a 35% equity holding in Air International Thermal Systems. Futuris Automotive also has a range of joint venture partnerships globally – Chery Automobile and Pangeo in China, Feltex in South Africa, and MCK Pacific (the parent company of Plexicor) in Australia. main products seating seat systems seat hardware interior trim floor carpets door trims overhead systems trunk trim nvh acoustics products controls steering systems pedal systems modular assemblies aftermarket electronic safety electronic assistance vehicle security rear seat DVD annual sales AUD$450 Million from global automotive interests employees 900 in......

Words: 391 - Pages: 2

Spill-over Effect

...disclosed its automobile policy to the outside world, and it helped international carmakers make investment decisions in China (Wang, 2004). These policies were designed to: * consolidate fragmented small domestic automobile companies by entry regulation * foster the automobile components industry by protecting it from international competition * regulate FDIs Since then, almost every big auto firm in the world has entered the Chinese market as a joint venture with a Chinese state-owned enterprise. At the same time, several domestic auto firms, such as Jili and Chery, also entered the market but were heavily dependent on foreign technology. China’s automobile production has increased tremendously, reaching 7.38 million units in 2007, which is the third largest volume after the U.S. and Japan. However, foreign-owned companies command a large market share, leaving local companies such as Jili and Chery in a difficult situation. In addition, domestic automobile parts companies are still more vulnerable than their international counterparts (Jin, 2005). It has been pointed out that the transfer of the multinationals' technology to local joint ventures has not been occurring. Technology transfer from the multinationals to local firms is seemingly controlled strictly by the multinationals. For example, GM and Pan Asia Technology 3 Moreover, a new car which is produced by local maker Hafei, utilizes the car body design of Pininfarina, install the Mitsubishi Motors’......

Words: 1144 - Pages: 5

Chery Automobile

...analysis of Chery automobile Submitted by: Resham Dhakal instructor : Ian choo Student No. P11016315 (CORP eve) Date: 2011-11-14 1 Introduction The main propose of this preliminary project is to analyses the present situation of Chinese automaker ‘Chery Automobile Co. Ltd. In order to analyses the present situation, we mainly focus on its internationalization process, its domestic market as well as international market, and its strategy of growth. And it is supported with different theories such as SWOT analysis, PEST analysis, Porter 5 Forces, 4Ps. 1.1 Chery at a Glance Chery is one of the Chinese fast growing state owned enterprise founded on 1997.with a capital of CNY 3.68 billion, and its first car came on a production on 1999. At present Chery owns for sub-brands, chery, karry , Rilich and rely. Currently Chery has 16 different module in maket and it possesses an annual production capacity of 900,000 automobiles. (Chery) . With the strategy of ‘Going out’ Chery become the first Chinese automobile company to export its production in overseas, including more then 80 countries. It offers cars, sedans, SUVs, and mini-vans on its different segment. Source – Chery International Co. ltd This figure show that, the total sale of Chery automobile is been increasing in every year, in the year 2008 its sale is 356,000 unit which is decrees by small present comparing to 381,000 on previous year 2007. Competition is the causes as......

Words: 3039 - Pages: 13

What Is Psychology?

...the opposite side of Clinical psychology, which shows the extremely diverse yet related topics of Psychology. Psychology is a science that is not a science. What I mean by that? Psychology is not a definite science, it requires a in depth analysis of a patient and the correct judgment of the scientist. It follows rules that are not rigid, and its main purpose is the furthered comprehension of the human mind. Psychology is more than a science; it’s a means to try to understand the point of human existence. Word count: 430. "How to Learn Psychology in Psychology 101 at AllPsych Online." Psychology Classroom at AllPsych Online. Web. 25 Mar. 2012. . Chery, Kendra. "Subfields Of Psychology." Psychology. Web. 25 Mar. 2012. . Chery, Kendra. "Major Areas Of Psychology." Psychology. Web. 25 Mar. 2012. . "Society of Clinical Psychology." Psychology. American Psychological Society. Web. 25 Mar. 2012. ....

Words: 492 - Pages: 2