Chery Automobile

Chery was founded in 1997 to prop up the economy in remote Wuhu, a region of China that received little industrial development. Its first factory used machines and engine technology purchased from Ford Europe for US$25 million. It did not begin auto production until 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.

In 2003, Chery founded a research and development organization, and began working with foreign manufactures to improve its technology. Chery was sued by GM Daewoo for illegally replicating the Chevrolet Spark (also known as Daewoo Matiz). Chery claims that they licensed the vehicle design prior to General Motors' purchase of Daewoo, but Chery's claims are unsubstantiated, with Chery's failure to disclose a license contract that Chery claimed to have signed with Daewoo Motors prior to its sales to GM. The copied vehicles are Daewoo Matiz (Chery QQ) city car and Daewoo Magnus (Chery Eastar) mid-size sedan. Chery's replicated Daewoo vehicles remain inferior to original Daewoo vehicles sold under Chevrolet brand according to J.D. Power's 2005 Chinese Initial Quality Survey. Additionally, they scored much worse in crash tests. However, they are 25% cheaper and come with more standard features. 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. Chery began production of it first self-designed engine in 2004, just one year after development began. It also adopted DURR Paint Systems in its paint shop in 2004. 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, to be one of the first Chinese automobiles sold in the United States. The plan calls for five new car lines to be imported. The cars would include a basic, inexpensive model, a larger sedan, a sporty coupé, a sport utility vehicle, and a sport wagon. Aesthetic design would be handled 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 will produce some of the transmissions. Lotus Engineering (known for their racing car chassis expertise) is aiding Chery in car design and quality. Ricardo Consulting Engineers Ltd is also devolping a hybrid powertrain for Chery. Bricklin plans to have 250 dealers in the United States selling 250,000 cars in 2008. In March 2005, Chery received an export credit from China's Export and Import Bank of 5 billion yuan (US$605 million) to begin trading overseas. Chery also received a 2.4 billion yuan (US$290 million) loan from the China Development Bank to further finance its research and development. Chery has also attracted Western suppliers to Wuhu, including Tower Automotive, Siemens, and TRW. Delphi will also supply parts for Chery's vehicles. In 2006, billionaire George Soros invested $200 million into Visionary Vehicles which will later be reinvested into Chery. 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. Visionary hired Pierre Gagnon from Mitsubishi Motors North America as Chief Operating Officer in March 2005, only to terminate his employment one month later. Gagnon felt that Visionary should be headquartered in California, while Bricklin wanted to keep the company in New York. As of June 2006, 75 dealers have committed $4 million to receive Chinese cars sometime in 2009.
Recent developments

By 2006, Chery was exporting to 29 countries. It is expected that the Chery QQ will hit the markets in Europe in late 2006, the introduction price is expected at €5000, making it the cheapest car in Europe together with the Dacia Logan. 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. Under the terms of the agreement, the total investment in the joint venture is 50 million RMB (approximately USD 6 million). China Automotive Systems and Chery Auto will have 77.3% and 22.7% shares respectively in the joint venture. Upon the completion of facility construction in 2007, WHAS is expected to reach a total production capacity of 300,000 sets of power steering systems and components annually. Most products of the joint venture will be supplied to Chery Auto. Once this new facility is operational, Chery Auto will also invest in a second factory in Pakistan to increase the exports to other parts of the world. However, with the new facility in Wuhu, China Automotive Systems will also commence developing sales to China's eastern market. Chery engines began export to North America in early 2006 with plans to begin export to Europe in 2007. It is also rumored that Chery is planning an IPO either in 2006 or 2007. In mid 2006, Chery purchased a failing commercial vehicle manufacturing facility from China's First Automotive Works. They intend to start production of their first branded commercial vehicles in 2008 and aiming for an annual output of 300,000 vehicles a year by 2010.