2023 Automotive industry Chery industry chain special report: Gain momentum to win overseas markets, gather momentum to "new"

Company profile: From 0 to 1, out of the "strange" win

Overseas market, "strange" win

In 2022, the passenger car industry exported 2.529 million units, +56.7% year-on-year. Entering 2023, the overseas market continued to maintain a high boom, as of October 2023, the total annual cumulative output of 3.306 million units, the same ratio of +67.3%, accounting for 84.3% of the total automobile exports, passenger car exports maintained a strong. In the 23M1-M10 vehicle export ranking, Chery ranked second with a total export of 742,000 units, a year-on-year increase of 1 times. In terms of export structure, Chery's exports accounted for 19.3% in October, 23, gradually approaching the export level of SAIC (20.5%), and far ahead of other independent brands.

From zero to one, successful counterattack

Chery started in 1997, the real control of the Wuhu municipal State-owned Assets Supervision and Administration Commission, when the establishment of the name "Anhui Auto parts Industry Company", does not have car production qualifications. In the same year, the company introduced a second-hand engine production line of Ford Motor with $29.8 million, and officially embarked on the road of car manufacturing. In 1999, Chery's first engine and car independently developed successfully rolled off the production line. In 2001, Chery exchanged 20% of its equity for SAIC's car production qualification, and changed its name to SAIC Chery, and Chery Fengyun was officially mass-produced. In the same year, 10 Chery Fengyun were exported to the Syrian market, and Chery took the first step to go to sea. In 2003, SAIC announced its official withdrawal from Chery, and Chery obtained automobile production qualification in the same year. After 2003, Chery developed rapidly, the millionth car successfully rolled off the assembly line in 2007, and by 2021, the global user exceeded 10 million, achieving a successful counterattack.

Comprehensive layout, diversified development

Chery Group: Established in 2010, Chery Group has laid out six business segments with the automotive industry as the core. Automotive segment: Core segment of the group. The business field covers the research and development, production and sales of passenger cars, commercial vehicles, minicars, special vehicles, special vehicles, powertrain and other products. It has more than 10 automobile manufacturing enterprises such as wholly owned Chery Automobile, Chery Commercial Vehicles, and joint venture Chery Jaguar Land Rover, Kaiyi, Qoros, and Ruiffo Special Vehicles. Parts sector: Chery Technology's products include chassis, body accessories, safety, power, electronic and electrical systems, and investment projects cover the entire industry of auto parts. Intelligent sector: With Wuhu Xiongshi Automobile Technology Co., Ltd. as the main operating body, Xiongshi Technology focuses on the technology development and ecological development of the whole industrial chain of intelligent automobile industry, including automatic driving, vehicle networking, data operation, etc., to achieve Chery's intelligent layout. Service sector: Ruiyuan International business covers two major areas: automobile production service and automobile consumer service. It involves seven business types, including circular economy, smart logistics, testing and certification and intellectual property services, automobile aftermarket, mobile travel, two-way trade, cross-border e-commerce and free trade zones.

Automotive plate -- core industry plate

The automotive sector is the core industrial sector of Chery Group, which is divided into passenger car and commercial vehicle business. In terms of passenger car business, the existing product brands such as Chery, EXEED Star Road, Jieto, Chery Jaguar, Chery Land Rover, Kaiyi, etc., have achieved a comprehensive brand layout from "entry level" to "luxury level". In terms of commercial vehicles, the existing product brands such as Kairui, Kairui New Energy, River, Wanda Bus, and its business covers a series of products such as new energy logistics vehicles, minivans, trucks, large and medium-sized buses, special vehicles, and special vehicles.

The overseas market has gained strength. In 2012, Chery exported 180,000 units (group caliber), +12.4% year-on-year; In 2022, Chery's exports reached a new level of 400,000 vehicles, and the annual export of 451,000 vehicles was +36.6%, and the CAGR of 12-22 was 9.9%. From January to October 2023, Chery Group exported 742,000 vehicles in total, double the year-on-year increase, far exceeding the annual export level in previous years. Domestic and export sales structure: Export volume accounted for 15.6% of total sales in 2020; Since 2023, exports have become an important increment of Chery, as of October, exports accounted for 51.1% of the total sales, domestic sales of 605,000 units, accounting for 48.9% of the total sales. Under the background of Chery's in-depth layout of overseas markets and the continuous recovery of domestic demand, domestic and foreign sales are expected to maintain synchronous growth.

Winning weapon: Close to the people price appearance, accurate market positioning

People's price appearance, accurate market positioning

People price cut into the domestic market. In the late 1990s, Jetta, Santana and Fukang were relatively active in the domestic auto market. In 1996, the reference price of Jetta was 148,500 yuan, Santana 138,500 yuan and Fukang Shenlong 142,000 yuan, which was much higher than the per capita disposable income of that year. In the low-end market, it is mainly an economic car of about 70,000 yuan such as Alto and Xially, and the price of 7000-100,000 yuan is short of classic sedan models, while Chery Fengyun appears with a price of 88,000 yuan, filling the gap in the price of 7000-100,000 yuan.

Explore subdivisions and compete in the SUV market. Chery: Focus on the SUV market of 100,000 to 150,000 yuan. According to the retail sales of the easy car list, the monthly sales level of Tiger8 has achieved recovery growth, and monthly sales of more than 10,000 from May to September, a total of 56,000 vehicles, far more than the main models such as Arezer 8 and Jetway X70. Matching the basic needs of users: Equipped with Kunpeng Power 2.0TGDI engine and relying on strong innovative self-developed technology, the maximum power is 187kW, the peak torque is 390N·m, and the official fuel consumption is about 7L per 100 kilometers, which ensures the power performance and also takes into account the fuel economy of the vehicle. Meet diverse needs: The Tigo8 series has Tigo8, Tigo8 PRO Champion edition, Tigo8 New Energy Champion edition, Tigo8 Kunpeng edition, Tigo8 PLUS. Among them, the Tighu-8 new energy champion edition has super competitiveness such as ultra-long endurance of 1000 km + and "the same price of oil and electricity", becoming a new force in the hybrid market. High warranty rate: Chery Automobile conducted a vehicle and engine disassembly test on a Tighu8 driving 100,000 kilometers, and measured that the warranty rate of 100,000 kilometers was 65%.

Seize the opportunity to go to sea and realize the global layout. Unexpected encounter with overseas markets, Chery officially "go out". In 2001, Samir, a Syrian businessman, saw Chery Fengyun for the first time at the Beijing Auto Show. In October of the same year, the first 10 "Fengyun" cars of Chery were exported to Syria through Tianjin Port and began to enter the international market in batches, achieving the breakthrough of Chery's complete vehicle export to overseas markets. In August 2006, Chery was jointly identified by the Ministry of Commerce and the National Development and Reform Commission as the first batch of "National automobile export Base Enterprises". Dislocation competition: In October 2004, Chery Automobile officially landed in the Egyptian market; Landed in Chile in 2007; In 2007, Chery launched in Indonesia, and then entered Iraq, Algeria, Lebanon and other markets. Twenty years after going to sea, Chery Automobile has exported to more than 80 countries and regions around the world, including 46 countries and regions along the "Belt and Road", which has formed dislocation competition with mainstream car companies. From "going out" to "going in" transformation: Chery has established six overseas research and development bases, 10 factories, and has more than 1,500 overseas dealers and service outlets.

Future drive: government and enterprise linkage, to the "new"

Men of science and technology move toward the "new" and maintain long-term competitiveness

Global R&D layout, fruitful results: Chery has six R&D centers: Wuhu Headquarters, Shanghai R&D Center, European R&D Center, North American Product Research Institute, South American Product Research Institute and Central Asia Product Research Institute. In 2002, Chery Industrial Design Center was awarded the title of "National Industrial Design Center" by the Ministry of Human Resources and Social Security. More than 2.6 million patents have been applied for. Continue to increase research and development investment: On September 16, 2022, Chery announced that in the next five years, Chery plans to invest 100 billion yuan in research and development, train 20,000 + R & D personnel (50% for software development), establish 300 Yaoguang laboratories, committed to supporting cross-science and cross-border technology research, to create a new automotive ecology.

Chery Automobile builds a new brand matrix with "Chery, Star Road, Jietu, iCAR" as the core, comprehensively accelerates the new energy, constantly upgrades the functional value, experience value and emotional value, and strives to meet or even exceed user expectations. In 2023, 135 new technologies will be launched for users, including the super hybrid platform under the Mars architecture, the E0X high-performance electric platform and the intelligent and ecological technologies supporting the above two platforms. These include the third generation hybrid technology, battery technology, electric drive technology, CHERY full stack self-developed CHERY-OS, Lion Zhiyun 6.0 intelligent cockpit technology, intelligent driving technology, Galaxy ecology, etc.

The technical path is clear - Mars architecture. Chery Mars architecture, including the two core technologies of physical platform architecture and EEA electronic and electrical architecture, is a new high-end intelligent electric platform for the new four modernizations (electrification, sharing, intelligence, and networking). In 2023, Chery Automobile released the Mars architecture - Super hybrid platform, which is the latest car-building platform based on hybrid development and compatible with efficient fuel power under the Mars architecture, and will be gradually used on Chery models under the Mars architecture. The new platform is composed of 18 modules, and adopts the 14+4 modular design concept, among which: 12 modules are shared, accounting for 67%; 2 modules were optimized, accounting for 11%; There are 4 intelligent dedicated modules, accounting for 22%. A unified interface standard is adopted between different modules of the new platform. Standardized interfaces can significantly save new car development cycles.

The business layout is increasingly clear, and the growth potential is self-evident

Apple with left hand, Huawei with right hand. In February 2022, Lichun Precision signed the "Strategic Cooperation Framework Agreement" with Chery Automobile, intending to jointly establish a joint venture company to engage in the development and manufacturing of ODM vehicles for new energy vehicles. At the same time, it is agreed that Licun Limited (the controlling shareholder of Licun Precision) will purchase 19.88% of Chery Holdings, 7.87% of Chery shares and 6.24% of Chery New Energy shares held by Qingdao Wudaokou for 10.054 billion yuan." Lichun has always had the status of the king of Apple foundry, Lichun and Chery formed a double sword combination, is expected to win Apple orders. On December 16, 2020, Chery and Huawei signed a comprehensive cooperation framework agreement. According to the agreement, the two sides will cooperate comprehensively in the fields of intelligent vehicle electronic and electrical framework, intelligent network connection, intelligent cockpit, on-board computing and autonomous driving, intelligent energy, and intelligent vehicle cloud services. The two sides will jointly study and explore 5G innovation application scenarios, and carry out in-depth cooperation in 5G+V2X, vehicle-road collaboration, and autonomous driving. The first pure electric coupe will be released this year, and it will also be the first car to be equipped with the HarmonyOS 4 operating system.

Local (Wuhu) has become a solid base for enterprises

Erect half of the province's world-class trillion automobile industry map. Complete industrial chain: In recent years, Wuhu has taken new energy and intelligent connected vehicles as the first industry, the first planning and the first support. At present, the city's auto and parts industry chain has gathered nearly 400 industrial enterprises above designated size, more than 1,400 upstream and downstream enterprises in the industry chain, and cultivated 4 listed enterprises. In 2022, the output value of the automobile and parts industry in Wuhu exceeded 200 billion yuan, an increase of 30.8% over the same period last year, and the total vehicle output was 1.111 million units, an increase of 36.5% over the same period last year, ranking first in the province in total automobile sales. The system is clear: Policies - Wuhu formulated the "Focusing on the first industry to build an internationally competitive new energy automobile industrial Cluster Action Plan" and issued "Several policies on supporting the high-quality development of new energy vehicles and intelligent connected automobile industry". Execution -- Wuhu has established a leading group for industrial cluster construction led by the Municipal Party Committee and the municipal government, established the Wuhu Automobile Industry Ecological Construction and Development Center, coordinated and promoted major planning, policies, projects, projects, funds and other important work arrangements for cluster construction, and coordinated and solved key and difficult problems. Supervision -- According to Anhui Province's new energy automobile industry cluster construction monitoring indicators, Wuhu City decomposed the task list of 75 items, monitored and evaluated the cluster construction situation on a monthly basis, and formed an integrated work promotion mechanism of "strategic planning - support policy - action plan - project list - closed-loop implementation".