Chery Automobile

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Chery
"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.

Contents

[edit] History

[edit] Early years

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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 certification at the time.

[edit] 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 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. The vehicles will not use the Chery name in the United States as General Motors felt it was too close to the nickname Chevy, derived from its wholly owned subsidiary Chevrolet.

[edit] Auto Piracy and Chery

Chery gained international notoriety over well-publicized piracy 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 auto piracy 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 GM's inability to seek justice in Chinese court and the pressure from Chinese communist party, 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. The affected vehicles are three Matiz clone and derivatives(QQ3, QQ6 and A1) and Magnus clone and derivatives(Eastar, V4, B12, and B22). The IP rights issue has become such a concern that DCX is rumored to have contacted GM for possible licensing of GM Daewoo vehicle IP on the behalf of Chery after it signed a 25-year cooperation and exclusive distribution agreement with Chery in early 2007.

[edit] Recent Developments

Chery QQ vehicle
Chery QQ vehicle

By 2006, Chery was exporting to 29 countries. On May 4th 2006, it was announced that Chery would form an alliance with China Automotive Systems. The joint venture company, under the name of Wuhu Henglong Auto Steering Systems WHAS, will be based in Wuhu, Anhui, near Chery Auto's headquarters. China Automotive Systems and Chery Auto will have 77.3% and 22.7% shares respectively in the joint venture. Chery's ACTECO engines began to be exported as small generators to North America in early 2006 and to Europe in 2007. In mid 2006, Chery purchased a failing commercial vehicle manufacturing facility from China's First Automotive Works. Chery intends to start production of their first branded commercial vehicles in 2008 and is aiming for an annual output of 300,000 vehicles a year by 2010. Italy's Fiat automobile company signed a deal with Chery to use ACTECO engines in their cars beginning in 2007. Under this plan, Chery will provide Fiat with 100,000 engines a year. DaimlerChrysler entered a joint venture with Chery in early 2007. DaimlerChrysler lacks a small car for the North American market and wants Chery to produce a car for them to sell under the Dodge brand in North America.

[edit] 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.

[edit] 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)

[edit] Models

[edit] Out of production

[edit] In production

[edit] Upcoming models

[edit] See also

[edit] External links

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