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Chery's total sales in the first half of the year exceeded one million for the first time, and its new energy sales soared 181.5%, and it is still growing at a high rate. In July, Chery sold 195,800 vehicles, a year-on-year increase of 30.1%; new energy sales soared 254.5% year-on-year to 45,400 vehicles.

Second only to BYD, Chery has become the "only two" car companies with half-year sales exceeding one million. Coupled with the "unceremonious" surge in new energy vehicles, Chery's goal of "seeing BYD's back by the end of the year" seems to be gradually approaching.

On August 5, the 2024 Fortune Global 500 list was announced. Chery made its debut on the list, ranking 385th with revenue of US$39.1 billion.

Although Chery issued many excellent "answer sheets" at the half-year node, it was revealed that it had issued 14-dimensional cost-cutting measures within the company, including design optimization, reducing the number of parts, using integrated components, and reducing unnecessary processing and transportation.

A month ago, another Chery employee revealed that he often worked overtime but received no overtime pay. In order to comply with IPO regulations, the company concealed the fact that employees worked overtime in the system, which irritated employees.

Chery, which is known as a "good student" with "excellent sales", "quietly making money", "export king" and "second in independent brands", seems to be immersed in high pressure. The bigger the goal, the greater the pressure. Yin Tongyue, chairman of Chery Group, is leading Chery New Energy to catch up with BYD, but he is also wrapped in anxiety.

New energy sales surged but fell short of expectations

"Chery will no longer be polite and will definitely be at the top of the national new energy vehicle rankings." After his "unwelcome" speech in October last year, Yin Tongyue once again made a high-profile statement in April this year that Chery will return to the top three in new energy by the middle of this year, and will become the second in the new energy industry by the end of the year, and will see the back of Wang Chuanfu (Chairman of BYD).

In the first half of this year, Chery Group sold 1.1006 million vehicles, a year-on-year increase of 48.4%, becoming the fastest growing automaker in China. Its new energy vehicles grew by 181.5% year-on-year. According to the China Passenger Car Association, in the first half of this year, Chery ranked behind BYD in the ranking of wholesale sales of automakers, leaving behind Geely and Changan, and ranked second in the domestic auto industry.

With sales volume second only to the "big brother of domestic brands", does Chery seem to have seen BYD's shadow in the middle of the year? However, it should be noted that Yin Tongyue used the qualifier "new energy" for this goal. In fact, Chery not only failed to achieve the goal ahead of schedule, but also was far from the "top three in the middle of the year" it had set.

In the first half of the year, Chery's new energy sales volume reached 181,000 units, up 181.5% year-on-year, and in July, it reached 45,400 units, up 254.5% year-on-year, a surprising growth rate. However, compared with its peers, Geely and Changan, whose total sales volume was left behind, sold 320,000 and 299,000 new energy vehicles in the first half of the year, respectively, much higher than Chery.

According to the data from the China Passenger Car Association, in the first half of the year, Chery failed to make the top 3 of the retail sales ranking of new energy manufacturers, and barely made it into the top ten, failing to meet its own expectations. With an absolute advantage of second place in total sales, focusing on the new energy field, Chery is ahead of other domestic brands such as Geely, Changan, Ideal, Seres, and GAC Aion.

The "doubling" growth has surpassed Chery itself, but in terms of the entire automobile market, Chery's new energy sales are still not as good as those of several other traditional car companies. Chery, which "sees the back of BYD" in terms of total volume, has been left far behind in the field of new energy.

In the second half of this year, the four major brands, Chery, Jetour, iCAR and Xingtu, will launch new cars, covering multiple models and covering hybrid, pure electric and other market segments. Through the fierce attack of the sea of ​​cars strategy, they will accelerate Chery's momentum and quickly catch up with BYD.

Chery, a "model worker", has difficulty creating a hit product

On July 25, Chery's electric hybrid SUV Fengyun T10 was launched on the market with a starting price of 189,900 yuan; on August 8, the Tiggo 8L with a pre-sale price range of 147,700 to 179,900 yuan will be officially launched on the market; on August 21, the Chery Xingjiyuan ES 2025 model, which has completed the high-loop extreme handling challenge, will be released on the market soon.

In the first half of the year, the "model worker" Chery followed the above rhythm, releasing a car almost every half a month, launching products intensively, and more than 80% of them were new energy products, fulfilling its promise of "unreserved" sales of new energy products.

Yin Tongyue revealed that Chery's product development efficiency has been further improved. The cycle that used to take 24 months has now been shortened to 20 months and 18 months.

Chery is launching new products intensively with high efficiency, and it wants to let the market select high-quality products under the "horse racing mechanism". "We hope to see which brand can stand out and run faster with the same resources, and then the resources will be tilted towards this brand. So let the bullet fly again." Yin Tongyue said.

Unfortunately, at this stage, no new energy product seems to stand out and become Chery's new energy representative product or sales leader. If Chery wants to truly achieve a new energy counterattack, it needs to have one or two "show-off" products like the fuel vehicle business segment.

"Sometimes deliberately emphasizing hot-selling products will result in huge losses. For example, through price wars, sales volume increases, but there is no profit. What's the point of this volume?" Yin Tongyue said that Chery pursues hot-selling products, but they must be hot-selling products with reasonable profits, which takes time.

The Chery brand itself focuses on the mid-to-low-end market, and the Fengyun new energy series is still being laid out; Jetour focuses on "travel + off-road", constantly exploring and gaining advantages in the market segments, and still uses fuel vehicles as its main products; Star ES and ET, as high-end products, have had mediocre sales since their launch, and it is difficult to say that they are hits, and Star ES comes from Starway and still shares the same brand with fuel vehicles; iCAR, as Chery's new force, only released its first product, iCAR 03, in February this year, and its brand reputation is still being built; putting aside the delivery issue of Zhijie S7, the outside world also tends to label the car as "Huawei".

Talking about Chery New Energy, small cars such as "QQ" and "Ice Cream" that Chery has consciously started to reduce are still its representative products.

"The more children you have, the easier it is to fight." Chery's new energy business, which adopts a multi-brand, multi-technology route strategy, has experienced explosive and rapid growth under this idea, but it has also made it difficult to create hit products, and there are hidden dangers such as homogeneous models, chaotic product systems, and low brand awareness.

This year, Yin Tongyue, the "boss", personally test-drove the new car, the Star Era ET. New products undergo violent tests just to gain trust, and executives are active on social platforms. In terms of marketing, Chery is also eager to increase awareness and gain attention for its products and brands by keeping up with traffic.

Under the horse racing mechanism, Chery must at least "run" out a brand or a product.

More important than quantity

"We are worried about moving too fast. It is easy for a company to run into problems if it moves too fast. Last year, Chery's (annual sales) increased by 52.6% year-on-year. This speed is actually abnormal because the market is not growing so fast." Yin Tongyue told the media that such high growth is unsustainable. He hopes that everyone can do things steadily and solidly. "It's like a farmer carrying a load. The heavier it is, the heavier it is. One day, it will break his back."

Whether it is chasing hot products but prioritizing profits, or thinking about the market rhythm under high growth, we can see Yin Tongyue's caution and steadiness.

After securing its two major advantageous sectors, fuel vehicles and overseas markets, which are also high-profit sectors, Chery focused on new energy to reduce costs and increase efficiency, and strived to gain more benefits for itself in the context of a "price war".

At present, the global trend of electrification is irreversible. Although the fuel vehicle business has a higher profit margin, the gradual shrinking market share will also erode profits, especially in the Chinese market where the penetration rate of new energy has exceeded 50%.

At the same time, international trade is also relatively unstable. In the first half of the year, tariff policies in Europe and the United States have affected China's electric vehicle exports. For car companies like Chery, whose overseas market sales account for half of their business, they are more affected by the uncertainty of international policies.

Chery needs to stabilize the profits of its ever-expanding new energy business segment, and it can be seen that in the process of new energy layout, unlike the approach of "trading price for volume", Chery is unwilling to transform at a loss.

In order to seek profit growth, multi-dimensional cost reduction is one of the effective measures; forcing employees to work overtime, which has caused controversy, is essentially an unhealthy way to reduce costs and increase efficiency. Previously, Li Xueyong, general manager of Chery Automobile Marketing Company, told a reporter from 21st Century Business Herald that Chery's leaders need to work overtime on holidays and "fight together" in the market.

In fact, behind Chery’s internal competition is also an anxiety about the new energy market.

With sales soaring in the first half of the year, Chery's 20-year long road to IPO has been brought up again. If it wants to be accepted by the capital market at this time, unlike the traditional car companies telling stories in the capital market in the era of fuel vehicles, new energy plays an important role.

An industry insider told the reporter that the capital market wants to talk about new things, and the concept of fuel vehicles is a dead end, and the capital market is not optimistic. Chery has been waiting for such a long time to go public because it is waiting for an opportunity to come up with a new round of new energy products to tell a good story in the capital market. The transformation and development of Chery's new energy will play a positive role in its impact on the capital market.

Sales volume, profit, brand, IPO, the major issues facing Chery now are all closely tied to new energy, and anxiety still exists under high growth. To catch up with BYD, Chery still has a lot to do.