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November 23, 2005

CHINA: Chery not yet ready to tackle US market

Chinese car maker Chery is not yet ready to export its vehicles to the United States because of worries it might struggle to woo consumers in the world's largest vehicle market, its top executive said on Wednesday.

Chinese car maker Chery is not yet ready to export its vehicles to the United States because of worries it might struggle to woo consumers in the world’s largest vehicle market, its top executive said on Wednesday.

But the unlisted firm is optimistic about growth within China, expecting to sell 180,000 units this year, and 5% more in 2006, its president Yin Tongyao told Reuters.

Chery already exports 10% of its cars but it is reluctant to take on the world’s largest car market just yet, Yin reportedly said.

“We have investigated US consumers, but entering the US market is like swimming in water that is too deep – we are scared of drowning,” Yin told Reuters on the sidelines of an industry forum.

“We need more time to prepare… US technology and US consumer habits are too different,” he reportedly added, declining to say when exactly Chery might enter the market. “There are still things at home we haven’t finished off.”

Reuters noted that Privately held US firm Visionary Vehicles has signed a deal with Chery and aims to sell 250,000 of its vehicles in 2007 and eventually one million units annually.

However, the news agency added, the company’s chief executive Malcolm Bricklin said in September the launch of the cars could be delayed by a few months because of changes in product specifications.

At home the firm is flourishing though, with market share of around 6-7%, up from 3-4% at the end of last year, Yin told Reuters.

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