Chery will soon launch the Omoda 5 (left) and E5 (right) in the UK
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 hands full.
Chery may be a successful exporter on a global scale, but here the company is having to start from scratch, despite strong ties to the UK through 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 an easy question to answer, but I hope that in five years we can get a similar market share as Kia. That’s quite a challenge, I think you’ll agree, but I think we should aim higher, right? If your goal is small, you might end up being smaller.”
What is your pitch to clients? Price?
“The price will be right. It’s not final yet, but the Omoda 5 should cost around £30,000-£33,000 for the EV and £25,000 for the petrol. The PCP finance offer will go live soon, potentially around £300 monthly payment for both the EV and petrol.”
What are the times?
“Omoda 5 and E5 are here now. We’re doing a big launch in London next month. The second one will be Omoda 9, possibly early next year. Then Omoda 7, then Omoda 8, then Omoda 9. [Omoda] 3.
The higher the number, the larger the model. So 3 is more like a Ford Puma or Nissan Juke.
“Jaecoo is the fourth quarter of 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 of a premium brand for us, not as high as a Range Rover but higher than Jeep.
“We want to be close to the Range Rover feeling. When you see the car, you know it’s similar. The textures, the design, everything.”
You have a joint venture in China with JLR. Is there a link between the two companies here?
“This will be a completely independent operation.”
You’re building the new JLR Freelander EV in China. Will it share a platform with Omoda or Jaecoo models?
“No. It’s on the Exeed platform. Exeed is the top 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 the international market.”
What international markets are there currently?
“We now operate in about 20 markets, including Turkey, Israel, Australia, Malaysia, Indonesia, Thailand and Chile.”
You didn’t mention Russia, but that’s also a big export market for you. Is that going to be a problem for your image here?
“I don’t think so. I know there are some political issues. For the people in the UK, maybe there is something [they don’t like] about Russia. But I’m a businessman; we just try to provide the best products and the best service. I don’t think it will do us much harm or anything.”
How do you go to market? Established dealers?
“Yes, [we will] have franchise dealerships. So we have 60 showrooms across the country. We have one in Chichester, just down the road from here [Goodwood]. We now have coverage in all major cities. We work with all types of dealer groups, all sizes.”
Should they have a separate showroom?
“We have 60% standalone showrooms and the rest are shared showrooms. But shared means we still have a physical partition with our own entrance; it’s not like a supermarket.”
Are you also expanding in Europe?
“We launched in Spain earlier this year. We just launched in Italy. We launched in Poland and now in the UK. As I said, we’re going to launch in a number of Eastern European countries after that, and also in the Netherlands, Sweden and Belgium. So almost all the major markets.”
Chery is subject to another 21% tariff, bringing the total to 31% in the EU. Just don’t bring in any EVs?
“We are still operating with EVs. We have prepared ourselves for this challenge. We have acquired the former Nissan factory in Barcelona. This shows our commitment to invest in Europe.”
Would that be making kits?
“Yes, probably CKD [completely knocked-down kits]. That would produce the Omoda 5.”
What have you heard so far about tariffs in the UK?
“What I’ve heard is that the UK will not follow the European Union; it will remain as it is. I think that’s a sensible move.”
What are the benefits of keeping rates at 10%?
“Chinese cars coming to Europe simply offer the customer another option. That doesn’t mean the Chinese are coming to grab and conquer.
“So 20 years ago Korea came into the UK with Hyundai and Kia. Today they each have about 5% market share. That’s it. So now people don’t think Korea is a threat, right? Same goes for the Chinese.
“Competitors here may think the Chinese could be a threat to them, but from a customer perspective it actually brings new options. People can choose.
“That is why the British government would be well advised not to do this.”
Do you have a general idea for the European market?
“No, we don’t. Every country has [someone like me] and we will report to the China office.”
Are they jealous of you for the lower rates on electric cars in the UK?
“It’s not that easy. You’re sitting 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 major rival?
“No, it’s completely different. In other markets we might see each other as competitors, but in the UK people still see MG as a British brand, right? I mean ordinary people, maybe not media people like you, who know the history.”
What is the image the average customer has of Chinese brands like yours?
“We did some research and people don’t think it’s bad. Some people think Chinese brands are value for money, higher quality, higher technology. So actually I don’t really care if people think we are a Chinese brand, I don’t hide it.”
Selling new premium brands, like you do with Jaecoo, is more difficult. How are you going to compete?
“Because we are newcomers, we can’t just start that high. It’s a question of balance. On the one hand, you have to position yourself with a strong price, right, but you also have to sell the cars. I think the price is a big challenge.”
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