Chery still lags behind other automobile brands in China though slight increase in the month-on-month sales

Gasgoo.com（Shanghai Nov 16）-Chery has achieved growth in sales for three consecutive months when the sales exceeded 42,000 last month with an increase of 20% on a monthly basis according to the sales data of automobiles in China which was recently released in October.

Though, Chery still has a long way to go when compared with others. Despite the sales of Chery has increased significantly in the past 3 months, the performance of Changan, Greatwall and Geely turned out to be more enviable. In the first ten months of this year, the cumulative sales of three companies has reached 787,500, 587,400 and 417,400 respectively while that of Chery has just been 350,500, even slightly lower than that of last year. Chery still lags behind a lot with respect to product and distribution channel. Therefore, so as to catch up with others, the key step lies in making breakthrough in these two aspects according to an investor of Chery 4S store.

Product development and distribution channel turn out to be two hardest issues for Chery during the transformation in the last two years. In 2013, Chery announced that the multi-brand strategy had failed. Then it implemented a strategic transformation and reunification, re-sorting out all products and dividing them into four major ranges. In addition to alternative energy vehicles, 9 models available have been divided into different ranges.

Meanwhile, it is safe to say that the revolution of distribution channel seems a disaster for Chery. On one hand, due to the transformation, the personnel upheaval has remained for two years. Gao Xinhua, taking the place of Huang Huaqiong, becomes Chef Executive Officer of its sales company while a number of subordinates of middle level desert jobs. On the other hand, the serious loss of franchisers in first-tier cities leads to a rapid decline in sales channels.

A sales manager of Chery 4S store in Beijing said that there had been a number of Chery 4S stores going out of business in recent years including those long-time followers of Chery. To some extent, the reduction of franchisers results from the purchase limitation policy in Beijing. More importantly, however, the frequent change of Chery has led to that franchisers have lost their hearts. Franchisers including Zhongruichen and Huabaolu have chosen to depart from Chery.

This can be ascribed to that the construction of distribution channel has moved from third-and fourth-tier cities to fifth-and sixth-tier cities based on Chery’s strategy. However, as franchisers in Beijing all know, Chery has given up on them.