Chery's Rise: A Blueprint for Automakers?

In 2024, the Chinese automotive market found itself embroiled in fierce competition, with new energy vehicles (NEVs) directly challenging traditional gasoline-powered cars amid rapidly evolving conditions in the international landscapeYet, against this backdrop, Chery Automobile proudly emerged with a report card that placed it head and shoulders above its competitors.

Chery's total sales for the year surpassed 2.6 million units, marking a staggering 38.4% increase compared to the previous yearThe firm also entailed revenue figures of 480 billion yuan, which represented a 50% growth, coupled with a significant improvement in profit marginsIn the realm of NEVs, Chery sold 584,000 units—demonstrating a remarkable year-on-year increase of 232.7%. Furthermore, export numbers soared beyond 1.14 million vehicles, keeping Chery at the pinnacle of China's automotive export successes for over two decades

Each metric stands as a prime example of the burgeoning strength of Chinese automotive brands.

When compared to its peers, Chery's achievements are starkly impressiveRecent years have seen some automotive manufacturers overly fixate on the NEV segment, resulting in considerable losses in the gasoline vehicle marketOthers have fallen victim to price wars, leading to increased sales but at the cost of profits.

Chery, however, has showcased a multifaceted stability: gasoline vehicle sales continued to thrive, NEV figures skyrocketed, and exports reached new heightsIt is apt to metaphorically classify Chery's performance in 2024 as that of an all-around "honor student," exhibiting not only excellence across various fields but also a methodical thought process and efficient learning techniques, thus setting the industry standard.

But what exactly lies behind this exceptional report card for Chery?

At the core of Chery's accomplishments is the robust logic behind its profitability—an essential factor in any automotive enterprise's operational capacity

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While sales numbers are undoubtedly significant, the ability to generate profit stands as the crucial measuring stick of a company's viabilityProfits do not merely serve as an operational lifeline; they are the fundamental guarantee for investment in research and development (R&D), brand elevation, and market expansion.

A high profit margin not only signifies ample resources for R&D and the upgrade of production lines but also positions an automaker favorably to promote its brand and explore market opportunitiesConversely, low profits or sustained losses risk ensnaring a company in a damaging cycle.

Chery's chairman, Yin Tongyue, has eloquently underlined this perspective by stating, "Profit is the lifeblood of enterprise development; without profit growth, any growth becomes meaningless."

In 2024, Chery validated its impressive profitability with a wealth of striking figures: a 50% annual revenue increase, net assets generating a return on equity (ROE) as high as 35.0%, surpassing even numerous light-asset e-commerce giants.

This surge in profit margins fundamentally results from two pivotal strategies: enhancing quality and effectiveness, alongside precise market positioning.

Chery has consistently embodied the principle of "earning smartly." By leveraging technological innovations to cut costs, the company succeeded in bringing unit production costs to industry-leading levels

Moreover, it has optimized its product lineup to focus on high-value-added modelsWithin Chery's operational framework, profit growth is not driven by high-volume sales at low margins; instead, it derives from sustained unit profit margin enhancements.

An illustrative case is the Tiggo 7 series, which has captured the market's attention with its stylish design and exceptional performanceThe model surpassed one million units in global sales and achieved the title of the top exporter among Chinese A-Class SUVs for three consecutive yearsThis success story evidences the marriage of increased sales with a marked enhancement in unit profit margins.

The precision of Chery's market approach is equally noteworthy; its success is not relegated to a singular market segment but spans a comprehensive spectrumSteady growth in the gasoline vehicle sector, soaring NEV sales, and record-breaking export performance reflect a balanced development strategy that ensures diverse and stable profit sources

It is fair to assert that every penny earned by Chery holds substantial value.

The NEV segment particularly shines here, with Chery's figures for 2024 showing sales of 584,000 units, a staggering 232.7% increaseThis not only bolstered Chery's overarching profitability but also established a formidable competitive brand presence in the realm of new energy.

When considering globalization, if profit represents the "physical strength" of an enterprise, then Chery's global strategy exemplifies its "endurance." Amid the wave of globalization, the concept of "going abroad" is hardly novel for Chinese automotive manufacturersHowever, the ability to establish a sustained local presence remains elusive to many.

Pioneering globalization for Chinese carmakers, Chery not only achieved record-breaking export figures in 2024 but transitioned from merely "venturing out" to "staying put," thereby crafting a classic template for the internationalization of Chinese brands through local market engagement, innovative partnership models, and value articulation.

The company's 2024 export figures were remarkable: it exported 1.14 million vehicles, representing a 21.4% growth year-on-year, while reaching a cumulative overseas customer base of over 4.5 million

This achievement places Chery in the top echelons of Chinese car manufacturers, significantly marking it as the fastest firm to surpass one million units in annual exportsIts products are now present in over 110 countries and regions globally, impacting markets in Europe, the Middle East, South America, and Africa.

Crucially, Chery's success transcends the act of selling vehiclesIts global strategy posits that "product output" is merely the first step, while "service output" and "value output" are paramountChery has instituted complete localized after-sales service frameworks across multiple overseas markets, including repair stations, parts supply chains, and online support services to provide seamless user experiences to customers worldwideThis service model not only elevates consumer satisfaction but also enhances brand credibility in the global market.

For instance, in Brazil, Chery has not only become the market leader but has also earned the reputation of being the most trustworthy automotive brand, thanks to a myriad of innovative after-sales services

The company successfully offers flexible financing solutions and even establishes dedicated consumer service centers, emphasizing a commitment to local adaptation.

On another front, Chery's globalization efforts are characterized by innovative models of operationTraditional automobile manufacturers often focus primarily on "exporting products," but Chery has spearheaded a shift towards "localized manufacturing," pursuing additional innovative collaboration techniques.

In the fiercely competitive European market, for example, Chery adopted a "reverse joint venture" strategy, partnering with Spain's EV Motors to jointly invest in the establishment of a manufacturing plantThis facility not only meets the stringent emission and technological standards required by the European market but also effectively reduces supply chain costs through local production, thereby facilitating Chery's further entry into premium market segments

This cooperative framework not only strengthens the company's bonds with local markets but also empowers Chery with greater leverage within the global supply chain.

Meanwhile, in the Middle East, Chery has constructed production bases and collaborated with local governments and distributors to launch numerous localized modelsOne focus has been optimizing vehicle cooling systems and air conditioning performance tailored specifically for the region's unique climate, garnering praise from consumers in Saudi Arabia and the UAE.

In Africa, Chery is not only delivering cost-effective products but also driving local automotive industry growth through technology transfer and talent training programsCollaborating with governments in countries like Egypt and South Africa, the company has established assembly plants while training a significant number of local technical workersThis "self-sustaining" development model illustrates how Chery positions itself not just as a car manufacturer but as a contributor to local economic growth.

In summation, Chery's globalization approach cannot be boiled down to simple expansion; it reflects a higher-order global business philosophy

Chery is committed to not only exporting products and services but also disseminating technology, management practices, and cultural values with a diligent, "old ox" mentalityThis philosophy has shaped its strategy, enabling Chery to steadily cultivate every overseas market while striving to evolve into a globally influential brand.

In a fast-evolving commercial world, many firms chasing short-term profits often overlook the significance of long-term strategyHowever, Chery's ascent reveals a narrative that underscores the vital role of persistent long-termism in its triumph.

Reflecting upon its foundational period, Chery's inception was humble; in 1997, a handful of engineers constructed their first engine using handmade tools in a less than ten-square-meter "grass hut," igniting the dream of automobile manufacturing.

During that early stage, Chery faced challenges with a lack of substantial capital, luxurious R&D teams, and a comprehensive technological framework

Nevertheless, its team adopted a "hands-on" attitude, tackling one technical challenge at a timeWhile many competitors remained caught in the tangential realm of imitating foreign technologies, Chery pressed forward with a roadmap for an autonomous R&D initiative—this grounded long-termism established the company as a trailblazer for technological innovation and ingrained the "grass hut spirit" as a cultural hallmark.

For Chery, the essence of long-termism resides in technological innovation and philanthropic R&D expenditureThe company has always maintained the conviction that technology constitutes the essential competitive barrier for enterprises rather than a mere tool for short-term strategiesTherefore, even amid industry downturns, Chery has steadfastly upheld its R&D investments, resulting in continuous breakthroughs across multiple domains.

To illustrate, Chery's advancements in NEV technologies can be traced back over a decade

Transitioning from initial battery module research to today’s comprehensive vehicle electrification platforms, Chery has consistently positioned itself as a front-runner in the industryThe new NEV models rolled out by Chery in 2024, including the Fengyun A8, Exeed Xingji Century ET, and iCAR V23, not only surpass competitors in terms of range but also elevate user experiences with advanced smart technologiesThese achievements are a testament to the fruits of their long-term R&D investments.

In the internal combustion engine sector, even as NEVs gain rapid traction, Chery remains committed to enhancing its gasoline vehicle technologiesThe Chery engine family has garnered multiple accolades, including the "Top Ten Engines of China Heart" title, owing to its efficient fuel economy and exceptional power performance, ensuring the competitiveness of Chery gasoline vehicles in international markets.

The company's unwavering commitment has solidified its footing in both technical and market domains, culminating in a comprehensive "explosion period" in 2024. Reflecting on Chery's leadership insights, "True success is not measured by quarterly performance, but scrutinized through a decade's lens." Chery's investiture over decades has yielded bounteous returns today, establishing a model for China’s manufacturing prowess.

Chery's growth trajectory underscores the reality that steadfast long-termism constitutes a genuine protective moat for enterprises

This philosophy is not only a continuation of the "grass hut spirit" but also serves as the ultimate interpretation of a long-term strategy.

As for future aspirations, Chery’s 2024 achievements exemplify a dual harvest of technological advancements and market gains, serving as a blueprint for the entire sector to learn fromFrom sales and profit metrics to brand positioning and social responsibility, Chery has delivered an impeccable performance grounded in a solid foundation.

Nonetheless, for Chery, the successes of the past year are merely the starting pointThe year 2025 is anticipated to be one of meticulous cultivation, during which Chery aims not only to consolidate its existing market position but also to transition from being a market participant to being a standard-setter within the industry.

In the NEV sector, Chery plans to unveil a series of pure electric and hybrid models across its brands in 2025. In the realm of intelligent driving, the company will integrate more advanced smart driving systems within its NEV offerings, leveraging end-to-end technology for the swift scaling of NOA production

As it continues its global footprint, Chery will bolster investments in the European market while strategically localizing its production to introduce models that accommodate the specific preferences of emerging markets in Southeast Asia, Africa, and the Middle East.

The year 2025 is set to present a host of challenges and opportunities for CheryWhether in the intensified focus on NEV development or the ongoing execution of globalization strategies, this automaker, which commenced its journey from a modest "grass hut," is poised to assert itself as a formidable Chinese force in the global automotive arena.

In that light, Chery has transcended the success of a mere business; it embodies a symbol of an eraIts journey denotes the rise of Chinese brands amid a globalizing framework, verifying that Chinese manufacturing is capable, not only of catching up with global standards but also of shaping the future.

Today, Chery's value extends beyond mere sales and profit numbers; it stands as a vibrant example of how Chinese enterprises can maintain strategic poise and achieve value elevation within a complex international milieu, successfully ushering in a "moment of glory" for Chinese brands on the world stage.