The development of new energy vehicles and the automobile industry is taking place in the forms of regrouping and restructuring. This offers Chery a great opportunity to develop and promote the brand. As one of the most influential and famous auto brand, Chery Auto has achieved an extraordinary growth rate and has become the pride of Chinese national automobile industry. Nevertheless, there is still certain potential in product quality, service and business culture which develops the brand image further. In consequence, issues regarding to manufacturing, service and business culture are needed to improve and strengthening.
However, the brand advantage of Chery Auto is not protruding. Compared with international automotive corporations, Chery Auto is not dominant in brand recognition and brand core value. Furthermore, multi-brand strategy leads to dilution of major brands. There are many sub-brands under Chery; nevertheless, no sub-brand achieves big sales. None of Chery Auto’s four sub-brands, Chery, Rely, Karry or Riich, is dominant in the automobile market. Its position in market is not stable. The purpose of this study is to find out appropriate branding strategies for national independent automobile manufacturer, Chery Auto.
This part consists of general background of Chinese automotive industry and brief description of Chery Auto. The situation of repeating construction and wasting of resources in Chinese automobile industry is serious. With the rapid expansion of Chinese automotive industry, substantial vehicle producers sprang up. Until 2008, there are 130 whole vehicle producers in China. 7, 82 million automobiles were sold by the top 10 vehicle producers of China, which accounted for 83% of its total sales. Only 1, 59 million cars were sold by the rest of more than 100 automobile enterprises. National Development and Reform Commission, 2010) 1. 1 Chinese Automobile Industrial Restructuring The purpose of restructuring is to revitalize national automobile industry by saving costs, purchasing together and developing jointly. (National Development and Reform Commission, 2010) Early in 2004, National Development and Reform Commission had published Automobile Industrial Development Policy. In the Automobile Industrial Development Policy, existing vehicle producing enterprises’ mergers and restructurings should be guided.
Its purpose is to promote domestic automobile enterprises become bigger and stronger by expanding Chinese automobile companies’ economies of scale and improving industrial concentration and by avoiding the scattered, chaotic and low level duplicated construction. (National Development and Reform Commission, 8 2010) Back in 2004, two suggestions were put forward. One was to form several large international competitive automobile enterprises through market competition. These several large enterprises would try to step in the list of World Top 500 companies in 2010s.
The mode can be strategic reorganization which means form large scale automobile groups by reorganizing domestic vehicle producers’ assets and forge business alliances by encouraging complementary strengths and resources share and cooperation. As a result, a coordinated and developmental industrial structure of large scale automobile groups, business alliances and special purpose vehicle manufacturers will be shaped. The other suggestion was to develop a number of spare parts enterprises with comparative advantages. Make sure to realize their economies of scale and to participate in international competition actively. National Development and Reform Commission, 2004) Financial crisis speeds up Chinese automobile industry restructuring. Financial crisis leads to decrease of national and international purchasing capacity. Therefore, both domestic and overseas automotive needs declined. Domestic automobile producers face great pressure. By the impact of financial crisis, Chinese automobile production and sales sharply declined year-on-year in the second half of 2008. For instance, in the fourth season of 2008, Chinese vehicle yield negatively grew by 14, 92% and the vehicle sales decreased by 8, 15%.