Chery's Ambitious Plans for Omoda and Jaecoo in Europe
Chery's Strategic Investment in Europe
Chinese car manufacturer Chery Auto is embarking on a significant investment plan to enhance its Omoda and Jaecoo brands within the competitive European automotive market. The company's head has indicated that Chery is prepared to invest billions of euros to ensure brand acceptance among European consumers over the next three years.
Launching Omoda and Jaecoo
Chery is making its entry into Europe with the official launches of the Omoda and Jaecoo brands this year, focusing initially on petrol engine vehicles. Sales have commenced in select countries such as Spain, Italy, Poland, and the United Kingdom, with plans to expand further. The company is also gearing up to introduce hybrid and fully electric models in the upcoming months, as environmental consciousness rises among consumers.
Market Observations and Aspirations
Kevin Cheng, the CEO of Omoda and Jaecoo for Italy, has highlighted that the brands are closely observing established competitors like Kia, Hyundai, Nissan, and Volkswagen to evaluate market strategies and benchmarks. He mentioned that Kia took nearly two decades to build its reputation in Europe, which sets a challenging but motivating benchmark for Chery.
Cheng confidently stated, "Our goal is to achieve that within three years." This ambitious target reflects the company’s determination to fast-track market acceptance.
Investment and Market Challenges
The specifics of Chery's investment strategy for marketing and brand development remain confidential, but Cheng confirmed it involves a substantial financial commitment in the billions. Though the Omoda and Jaecoo brands have not revealed specific sales figures in Europe, they reported nearly 150,000 global vehicle sales from January to August.
Amid this growth, Chery faces challenges, particularly with the European Union's proposal for an additional 20.7% tariff on Chinese-made electric vehicles. Cheng pointed out that compared to some other Chinese automakers, Chery is encountering relatively lower tariffs, which could potentially benefit their operations.
Building Relationships and Future Production
To mitigate tariffs, Cheng emphasized the importance of fostering strong relationships with the EU. Producing vehicles locally is a strategic move that could help Chery circumvent these financial barriers. The company is set to initiate production at its newly acquired Barcelona factory, marking its first manufacturing footprint in Europe, in partnership with a local entity.
Exploring Further Manufacturing Options
Moreover, the group is considering the establishment of a second manufacturing site in the region, potentially looking into Eastern Europe to broaden its production capabilities. The Italian government is also in discussions with Chery, alongside other Chinese manufacturers like Dongfeng Motor, to lure further investment into the country.
As Chery Auto pushes forward with its Omoda and Jaecoo brands, it aims not just to sell cars but to weave itself into the fabric of the European automotive landscape.
Frequently Asked Questions
What are Chery's main objectives in Europe?
Chery aims to establish its Omoda and Jaecoo brands, investing heavily to achieve significant market penetration within three years.
When did Chery start selling Omoda and Jaecoo in Europe?
Chery officially launched the Omoda and Jaecoo brands in Europe in the current year, with sales starting in various countries.
What types of vehicles will Chery offer in Europe?
Chery plans to initially focus on petrol engine vehicles, with future offerings including hybrid and fully electric models.
How does Chery plan to overcome tariff challenges?
Chery intends to build relationships with the EU and establish local manufacturing in Europe to avoid or reduce tariffs.
Where will Chery's European production take place?
Chery's first European manufacturing site will be at its newly acquired factory in Barcelona, Spain, with possibilities for a second facility in Eastern Europe.
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