Chery - History & Company Profile

Chery Automobile

"Chery" redirects here. For similar words, see Cherry (disambiguation) or Cherie (disambiguation).
Chery Automobile (in Chinese: 奇瑞汽车; English pronunciation: [ˈʃɛɹiː]) is an automobile manufacturer in China. In Pinyin it is "Qirui" and its English transliteration should have been "Cheery" but there was a mistake in the transliteration process and it was decided by the company to not correct the error.[citation needed] It is owned by the local government of Wuhu (but is scheduled to be privatized), and sold about 305,000 vehicles in 2006. It is the largest independent Chinese auto manufacturer and one of the fastest growing automakers in the world.

History

Early years

Chery was founded in 1997 to prop up the economy of Wuhu, a region of China that has received little industrial development. Its first factory used machines and engine technology purchased from Ford Europe for US$25 million. It began auto production in 1999 using a licenced chassis from SEAT's Toledo. The company was an illegitimate company under Chinese law of the time and had to be registered as a "Car Parts Supplier." Thus, the company was not able to obtain a license to sell their cars in all of China. In 2001, Shanghai Automotive Industry Corporation (SAIC) bought a 20% stake in the company, allowing Chery to use SAIC's national retail sales license. In 2001, Chery began exporting its cars to Syria, becoming China's first car exporter. Chery also received its ISO-9001 certification. In September 2002, Chery received its ISO/TS 16949 certification, the highest quality certification at the time.

2003 to present

In 2003, Chery founded a research and development organization, and began working with foreign consultant firms to improve its technology and quality. In its relentless pursuit of quality, Chery hired a Japanese engineer from Mitsubishi to head Chery's Lean/Six Sigma production systems, which were first applied to their cars in 2003. They adopted DURR Paint Systems in their paint shop in 2004, becoming one of only 5 factories in the world to have this advanced paint system. SAIC sold its stake back to Chery in 2004 due to rising tension between Chery and its other partners General Motors and Volkswagen

In 2005, Chery was upgraded to ISO/TS 16949:2002 production quality, the highest and strictest quality control system in the global auto industry. They also began working with Malcolm Bricklin's company, Visionary Vehicles, hoping to be one of the first Chinese automobiles sold in the United States. The plan was to import five new car lines. Bricklin planned to have 250 dealers in the United States selling 250,000 cars a year by 2007. However, after 2 delays and various disagreements over finances and car design, the deal broke down. Instead, Chery is pursuing its own export plans and is designing a large array of cars for the American and European market and Chinese market. Aesthetic design is being aided by Bertone and Pininfarina of Italy known for their designs for Ferrari and Lamborghini. AVL of Austria is also working with Chery to produce 18 engines, including a turbodiesel, for the new line of cars. The new engine brand, called ACTECO, meets Euro IV emissions standards and uses advanced technologies such as aluminium alloy cylinder blocks/heads and direct fuel injection. Bosch is helping Chery to design modern transmissions. Lotus Engineering (known for their racing car chassis expertise) is aiding Chery in car design and quality. Ricardo Consulting Engineers is also devolping a hybrid powertrain for Chery for use on China's first hybrid vehicle.

Design copying controversy

Chery gained international notoriety over well-publicized illegal copying of foreign automobiles, namely General Motor's Korean subsidiary GM Daewoo Auto & Technology's Daewoo Matiz(sold as Chery QQ) city car and Daewoo Magnus(sold as Chery Eastar) mid-size sedan. Chery attempted to negotiate a local Chinese production licenses of those vehicles with bankrupt Daewoo Motors prior to General Motor's purchase of the bankrupt automaker's assets in 2002, but the negotiations were never closed. Nevertheless, Chery proceeded with the production of these former Daewoo vehicles without a formal license, triggering General Motors to sue Chery for copying in December 2004 citing "extreme similarities". GM Daewoo claimed their investigation results showed the Chery QQ shared a remarkably identical body structure, exterior design, interior design and key components. "Chery even used a camouflaged Matiz car to pass auto tests to acquire authorization from the government over production and sales of QQ." With the court's inability to come to decision, GM opted to drop its case in November 2005 to preserve its business interests in China. However, GM reserves rights to sue Chery again if it attempts to bring the vehicles in question to European and North American markets.

Production facilities

Chery produces most of its cars in China. In 2003, Chery built a plant in Iran, China's first foreign car plant, and at the Modiran Vehicle Manufacturing Company saw its QQ put into production in 2005. Also in 2005, another Chery plant became operational in Russia. Chery is planning to begin production in Malaysia in late 2006 and saw its cars being built at the former Daewoo Motor Egypt plant at Maddi, Cairo under the Speranza brand name. Chery has signed an agreement with Mauricio Macri-owned company Socma to form Chery Mercosur, a joint-venture which will produce the QQ and Tiggo in Montevideo, Uruguay from 2007 onwards. [1] After selling 1 million cars in the US, Chery intends to build a facility there as well.

Chery sales history

2000: ~2,000
2001: ~28,000
2002: ~50,000
2003: ~90,000 (8th in China)
2004: ~86,000 (10th in China)
2005: ~188,000 (5th in China)
2006: ~305,000 (3rd in China)
2007: ~392,000+ (Estimated)

Models

Out of production
2000–2006 Fulwin/Windcloud (风云) (codename A11) — 1.6L sedan

In production
2003– QQ3 (codename S11) — 0.8L & 1.1L city car
2003– Cowin/Flagcloud (旗云) (codename A15) — 1.6L sedan
2003– Oriental Son/Eastar (东方之子) (codename B11) — mid-size sedan
2005– Tiggo (瑞虎) (codename T11) — 1.6L & 2.0L & 2.4L compact SUV
2006– A5 (codename A21) — 1.6L & 2.0L sedan
2006– V5 (codename B14) — 2.0L & 2.4L minivan
2006- QQ6 (codename S21) — 1.1L & 1.3L city car
2006- Karry a small panel van.

Upcoming models
2006- codename A18
2006- codename S22
2007- codename S12
2007- codename T15
2007- codename B12
2007- codename S16
2007- codename B13
2008- codename M14
2008- codename P12
2008- codename F11
2008- codename B22