Chery Automobile Layouts its 16th Production Base Overseas

On the afternoon of September 17, Chen Shulong, Party Secretary of Wuhu Municipal Committee, Yin Tongyue, Chairman of Chery Automobile, Mario, Chairman of Brazil State Investment Authority of São Paulo, Mayor of Jacarei, Hamilton, and Deputy Secretary General of the Development Agency of São Paulo, Joao, Jaca Secretary General Emerson of Rey Development Department signed a framework agreement to invest and build factories in Wuhu, Anhui Province. According to the agreement, Chery Automobile plans to invest USD 400 million to build a factory in Brazil to manufacture and sell Chery models locally.

“The Brazilian market is very large. In 2009, it reached 3 million vehicles. And Brazil does not have an automotive industry. It is an exotic vehicle and has a good investment environment,” said Jin Qibo, assistant general manager of Chery Automobile, to the China Business News.

According to the agreement, the Chery Brazil project is located in Yakarei, São Paulo. The project is solely funded by Chery. The overall plan is to eventually build the Chery Brazilian Industrial Park. The industrial park covers an area of ​​1 million square meters and a total investment of 400 million U.S. dollars. The project is planned to be implemented in two phases: a phase I investment of US$134 million, a two-shift 50,000-unit/year capacity plant, which is scheduled to be completed and put into operation in 2013; additional investment in the second phase will reach 400 million U.S. dollars, and 3 shifts of 150,000 vehicles/year will be achieved. The production capacity will be based on the operating conditions of the market and factories, and will introduce excellent suppliers in China to Chery Brazil Industrial Park to support Chery and other vehicle manufacturers. In the first phase of the project, Chery S12 (A1) and A13 (Fengyun 2) series models will be introduced, all of which are flexible fuel vehicles that meet the requirements of the Brazilian market. Later, other models will be gradually introduced according to the development of the market.

“We entered Brazil in 2009 when we took the Uruguay factory model to Brazil and sold it. It soon led to a lack of Uruguay factory capacity. So we are considering setting up a separate plant in Brazil.” Jin Yibo said that the company’s SUV The model has sold more than 10,000 units in the past one year and has won the title of the outstanding 2009 SUV model selected by Brazil.

The first export of Chery Automobile started in 2001 and the target market is the Middle East. Since then, Chery Automobile has successively exported automobiles to Southeast Asia, Eastern Europe (Russia, Ukraine), Western Europe (Italy), and Africa (Egypt), and has built factories in cooperation with local partners in these countries and regions to achieve local production. After the Chery Brazil plant was built, the company will have 16 production bases overseas.

"China had the world's top sales in 2009, but it only accounted for 20% of global sales, and 80% of the global market is a blue ocean. And now China is the most competitive automobile market in the world." Jin Yibo said, Chery Automobile In 2008, which had the highest proportion of overseas exports, its ratio of overseas sales to domestic sales was approximately 30:70, and Chery’s future goal was to achieve 50:50.

Chen Wenkai, the president of Gasgoo.com, told this reporter: “Chinese auto companies must go abroad to enter other people's markets instead of always fighting in their own homes. When they get their own homes, they are occupied by foreign companies, and overseas markets do not, then they survive. The opportunity is also small."

In fact, the experience of multinational automobile companies such as Toyota and Volkswagen shows that overseas markets are more important than local markets. When the financial crisis broke out in 2008, Toyota Motor Co. suffered a loss due to the decline in sales volume in Japan and North America, while Volkswagen continued to maintain profitability due to its more globally distributed layout.

“When there is a problem in a market, there are other overseas markets that can maintain stability and continue to provide blood for companies, so companies are safe.” Chen Wenkai said.