Chery trapped in QQ

Wen 丨 Hua Shang Tao Strategy Mother Ze Liang

【1】

Since the first car off the production line in 1999, Chery has only taken 8 years to rely on small cars QQ to sweep the north and south of the river, and also boarded the throne of the domestic independent brother.

In 2007, Chery's total assets reached 23.7 billion yuan, with nearly 20,000 employees, and Yin Tongyue, the founder of the unlimited scenery, said in public many times that Chery was preparing to go public.

However, since then, the situation has taken a sharp turn for the worse, not only has the listing failed, Chery has not even been able to launch a national product comparable to QQ - Chery is trapped in QQ.

In contrast, the independent brands Great Wall and Geely Automobile that made their fortunes in the same period have been listed for many years. In 2020, great wall and geely ended with net profits of 5.362 billion yuan and 5.57 billion yuan respectively, while Chery was only 7.37 million yuan, less than a fraction of the two, and the net profit of bicycles was only 16.4 yuan, and in some places, even a pound of pork could not be bought.

Why did Chery come to this? Looking back at its history from prosperity to decline, we may find the answer.

In 2007, in addition to announcing the listing, in the face of the slowing growth of the domestic automobile market, Yin Tongyue also put forward the idea of "slowing down the pace of expansion and improving product quality and technical level".

By the beginning of 2009, China's auto market began to develop at a rapid rate of 46.1%, Yin Tongyue still said: "In this situation, we can not blindly expand production capacity because the market is good, when the market falls into a tight, enterprises will fall into great risks." ”

However, at the same time that Yin Tongyue focused on the industry, Chery successfully broke through the sales bottleneck of 500,000 vehicles and won the sales champion of its own brand for nine consecutive years.

Yin Tongyue's firmness loosened, and he began to wonder whether the ideas he had insisted on for two years had made the mistake of conservatism.

By the middle of the year, Yin Tongyue picked up the strategy of "having more children and fighting", released more than a dozen new cars in a row, returned to the road of extensive development, and also opened the first impact on the high-end market.

Since then, similar "rebellions" have occurred repeatedly. Perhaps, it is Yin Tongyue's strategic wandering that has affected Chery's future.

【2】

At that time, China's independent car manufacturing could not escape the impression of "low-end relying on domestic production", and Chery was even more so.

QQ, which opened the market for Chery, has been synonymous with cheap cars for a long time, and Chery has fallen into a more severe cheap dilemma than other independent brands.

In order to break the game, Chery divided the brand into four: Chery, Karry, Ruiqi and Weilin. During this period, Ruilin was given the mission of impacting the high-end.

"The purpose of founding Ruiqi is to meet the needs of a part of the customer base, and the car should be elegant and expensive!" As I said, this car definitely can't be sold cheaply! Yin Tongyue swore an oath.

At the end of 2009, Chery sent the newly launched Ruiqi G5 to the famous Nürburgring Nordsch, and in the F1 race where legendary Schumacher won the championship three times, the Ruiqi G5 ran 8 minutes and 56 seconds, which was almost the same as the three high-end models in the BBA camp (BMW M36MT, Audi RS4Sedan, mercedes-Benz C-class 63AMG).

After becoming the first Chinese self-owned brand to successfully challenge the track, chery's powerful engine technology made Chery stand out for a while.

But the good times are not long, in the overall extensive development of Chery, more children and good fights in the strategic context, Yin Tongyue's "QQ addiction" has been committed again.

He put his previous vows behind and launched a mini car Ruiqi X1 priced at about 50,000 yuan, which directly crushed the high-end impression that Ruiqi G5\G6 had accumulated hard.

In the four years since, the total sales of G5\G6 high-end models have exceeded 1400 units, and Ruilin will eventually be unable to escape the fate of discontinuation.

While the impact on the high-end market failed, the tragic consequences brought about by extensive development also followed.

After bringing dozens of models to market, Chery's sales increased from 350,000 to 680,000 units, but the total profit plummeted from 314 million yuan in 2008 to 0.72 billion yuan in 2009, with a growth rate of -436%!

Since then, Chery has shouted "I'd rather have sales fall out of ten, but also implement strategic transformation", while constantly producing new cars crazy and beginning to fight left and right.

In less than 4 years, Chery has accumulated losses of more than 2 billion yuan, and at this time, Haval of the Great Wall and Emgrand of Geely have begun to emerge, and the gap between the three has also been opened.

In 2013, the People's Daily publicly reported that the auto market was "red across the board", and most of the car companies' sales volume reached double-digit growth in 2012, "only a few independent brands, there has been a certain decline."

The "individual brand" here is Chery. Among the top 30 car companies in its statistics, Chery ranks first from the bottom and is the only car company with negative growth (-18.8%).

After being named and criticized by the People's Daily, Yin Tongyue could not sit still.

【3】

In April 2013, Yin Tongyue announced the "return to a Chery" strategy, but at the end of the year, Chery released the second Qoros that hit the high-end market.

After the listing, this car was not popular, sales were dismal, with a cumulative loss of 6.6 billion yuan in three years, in order to stop the loss in time, Yin Tongyue had to sell it to Baoneng Group.

The following year, Yin Tongyue set up the Kaiyi brand and tried to flip the market. However, because it is highly similar to Chery's product line, Kaiyi, which has poor sales, cannot escape the fate of being sold.

In 2018, Chery's debt ratio has reached a staggering 75%, and at the same time, China's auto market has also experienced negative growth for the first time in 28 years, and the growth rate of China's hottest SUV market has begun to slow down.

At this moment, his men put a project that focuses on SUVs, Jietu, in front of Yin Tongyue.

From its own consistent thinking, now is certainly not a good time to meet consumers. But after falling, Yin Tongyue also began to reflect on the correctness of individual decisions and whether he should listen more to the team's opinions. In order to verify this problem, this time, he supported a product that he was not optimistic about at all.

At Jietu's press conference, Yin Tongyue even said: "If Jietu succeeds, I will be penalized; if Jietu fails, they (Jietu's founding team) will be penalized." ”

However, what is interesting is that the shortcut that is not optimistic about Yin Tongyue has created a way for Chery to survive with a very high cost performance. Less than four years after its listing, Jetway has sold nearly 500,000 units, and its sales executive expects to sell at least 200,000 units in 2022 if it is not restricted by chips.

Perhaps "afraid of Chery's delay in Jietu", in July 2021, Chery Jietu changed its name to Jietu Automobile and designed a new brand LOGO, which was independent from Chery's product lineup.

In January 2022, Yin Tongyue announced last year's sales results of 960,000 vehicles, which is still some distance from the "million vehicles" target he shouted nine years ago. At this time, he was busy setting up a new flag for 2 million vehicles next year.

Can he achieve this goal? The results are unknown.

However, Yin Tongyue's repeated renegades on his word did make Chery fall off the altar and be thrown away by his opponent. Fortunately, Chery is hot in overseas markets such as Russia and Brazil, and it can also transfuse blood for consecutive years of losses. However, if Yin Tongyue wants to reach the top again and regain his position in the domestic automobile market, the problem of rebellion must indeed be changed.

【References】

[1] China Quality News "Enterprises not doing branding will be too much smoke"

[2] CBN "Chery Automobile's net profit last year was only 7.37 million yuan"

[3] The Economic Observer, Chery's Sales: The Secret That Cannot Be Said

[4] China Youth Daily, "Yin Tongyue's Cruel Words: Chery's Annual Sales of Millions of Vehicles will Be Achieved by 2012 at the Latest"

[5] Sohu Auto feature "Yin Tongyue - Taking Your Own Road And Not Going Overseas"

[6] Zhongan Online, "Yin Tongyue: It is better to implement strategic transformation than to decline sales"

[7] The Paper, "In order to sell this new product of Jietu, Chery Chairman Yin Tongyue and executives "bet" penalty station"

[8] People's Daily Auto Channel "2013 China Automobile Sales Ranking Announced"

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