Chery UK boss: we want to be as big as Kia in five years

Chery has bold targets for the UK as it launches two brands: Omoda in the volume segment and the more premium Jaecoo. The Chinese company has its work cut out.

Chery may be a successful exporter globally, but here it has to start from scratch, despite a strong UK connection via its joint venture with JLR in China.

Autocar Business spoke to country director Victor Zhang at the Goodwood Festival of Speed about his ambitious plans for the company here.

What are your sales targets in the UK? 

“It’s not easy to answer, but I hope in five years’ time that we can get a similar market share as Kia. That is quite challenging, you’ll agree, but I think we need to aim higher, right? If your target is small, maybe eventually you get smaller.”

What is your pitch to customers? Price? 

“The price will be good. It’s not finalised, but the Omoda 5 should be around £30,000-£33,000 for the EV and £25,000 for the petrol. Soon the PCP finance offering will go live, possibly around £300 monthly payment for both the EV and petrol.”

What are the timings?

“Omoda 5 and E5 is here now. We’re doing a big launch in London next month. The second one will be the Omoda 9, possibly early next year. Then the Omoda 7, then the [Omoda] 3.

“The bigger the number, the bigger the model, so 3 is more Ford Puma or Nissan Juke size.

“Jaecoo is fourth quarter this year, with the J7 [BMW X3 rival].”

What are the differences between the two brands? 

“Omoda is more for urban commuting, more futuristic and fashionable. It’s more like Kia. Jaecoo is more like a premium brand for us, not so high as a Range Rover but higher than Jeep.

“We want to be close to the Range Rover feeling. If you see the car, you will know it’s similar. The textures, the design, everything.”

You have a joint venture in China with JLR. Will there any link with the two companies here?

“This will be totally independent operation.”

You’re building the new JLR Freelander EV in China. Will it share a platform with Omoda or Jaecoo models?

“No. that’s on the Exeed platform. Exeed is the highest brand for the Chery group, so it’s more like Lexus for Toyota. Higher than Jaecoo.”

Do you sell Jaecoo or Omoda in China?

“No, these brands are only for international markets.”

Which international markets at the moment?

“We’re in around 20 markets now, including Turkey, Israel, Australia, Malaysia, Indonesia, Thailand and Chile.”

You haven’t mentioned Russia, but that’s a big export market for you as well. Is that going to be a problem for your image here?

“I don’t think so. I know there are some political issues. For UK people, maybe there’s something [they don’t like] about Russia. But I’m a business guy; we just try to bring the best products and best service. I don’t think it will do us big harm or anything.”

How are you going to go to market? Established dealers?

“Yes, [we will] have franchise dealerships. So we have 60 showrooms across the country. We have one in Chichester, close to here [Goodwood]. We have coverage in all the main towns and cities now. We partner with all types of dealer groups, all sizes.”

Do they have to have a stand-alone showroom?

“We have a 60% stand-alone showrooms and the rest are shared showrooms. But shared means we still have physical partition with our own entrance; it’s not like a supermarket.”

Are you expanding in Europe as well? 

“We launched in Spain earlier this year. We just launched in Italy. We launched in Poland and now the UK. As I mentioned, then we’re going to launch in some eastern European countries and also in the Netherlands, Sweden, Belgium. So almost all of the important markets.”

Chery has been subject to anther 21% tariff, bringing the total to 31% in the EU. Do you just not bring in EVs?

“We are still operating with the EVs. We have prepared ourselves for this challenge. We bought the former Nissan factory in Barcelona factory. This shows our commitment to invest in Europe.”

Would that be making kits?

“Yes probably CKD [completely knocked-down kits]. It would make the Omoda 5.”

What have you heard so far on tariffs in the UK?

“What I’ve heard is that the UK will not follow European Union; it will stay as it is. I think that is a wise move.”

What are the advantage of keeping the tariffs at 10%?

“Chinese cars coming to Europe provides just another option for the customer. It doesn’t mean the Chinese will come to grab and to conquer.

“For example, 20 years ago Korea entered the UK with Hyundai and Kia. Today they have around 5% market share each. That is all. So now people don’t think Korea is a threat, right? It’s the same for Chinese.

“Competitors here might think the Chinese may pose danger to them, but from the perspective of a customer, actually it brings a new options. People can choose.

“That’s why the UK government is correct not to follow.”

Do you have an overall head for the European market?

“No, we don’t. Each country has [someone like me] and we will report back to the China office.”

Are they envious of you, with the UK’s lower tariffs on EVs?

“It’s not that easy. You sit in this chair [and] you will always think that chair will be better. We all have our difficulties or challenges.”

Is SAIC’s MG a key rival?

“No, it’s totally different. In other markets, maybe we see each other as a competitor, but in the UK people still consider MG a British brand, right? I mean ordinary people, maybe not media people like you, who know the history.”

What is the perception that average customers have of obviously Chinese brands like yours?  

“We’ve done some research and people don’t feel like it’s a bad thing, Some think Chinese brands represent value for money, higher quality, higher technology. So actually I don’t care too much if people think us as a Chinese brand, I don’t hide it.”

Selling new premium brands, as you’re doing with Jaecoo, is trickier. How will you compete?

“Because we are new entrant, we can’t just start so high. It’s a balance. One side is you need to position yourself with a strong price, right, but you still need to sell the cars. I think the price is a very challenging thing.”