I am convinced that Chery QQ is the most influential car from the last 10 years.
“Which car? Why did I never hear about this one?” I hear you thinking.
Still they have produced more than a million of these cars in the last few years.
This year, Chery was exporting more than 400,000 cars to Asia, East Europe, Africa and South America.
Some background first. Chery started out as a license-producer, making Seat cars in 1999, in the backwater town of Wuhu. Nobody noticed. At that time, there were ten car factories in China, most of them 50/50 joint ventures with Chinese government owned car plants with multinationals. Most successful ones were First-Auto-Works-VAG producing Audi in the north and SAIC-VAG “SVW” producing Volkswagens in Shanghai.
Ten years ago, in 2003, when the story begins, cars were quite expensive in China.
It was a very profitable, but small market, dominated by a handful players – all joint-ventures with foreign companies.
When nobody was looking, Chery launched a car on the market with a very low price under their own brand. It was a rip-off/copy/shanzhai of the Daewoo Matiz/Chevrolet Spark, but at an even lower price.
Here was a small four-seater at a price HALF of the second cheapest car on the market.
Within a year, car prices fell with 30% all across China in response to the very low price alternative of Chery QQ.
After two years, Chery was exporting hundreds of thousands of cars across Asia.
There has been much media attention in the last five years for the Tata Nano, the affordable micro-car that would raise the living standards of the masses.
However, it has been a commercial fiasco. Millions of dollars invested, and sales are less than 10,000/year.
In reality, the real affordable microcar, giving automotive power to more than a million families across the world is the Chery QQ, starting at 2,100 euro.
The second effect of Chery QQ is the snowball effect. They showed the world that anybody can build a car. If they can do it in Wuhu, Anhui, they surely can do it in Chongqing, Dalian, Shenyang and Wulumuqi, right?
There is a lot of prestige in car-factories.
Every governor of a province in China wanted to have his own car factory.
Therefore, starting in 2005, there have been car plants sprouting out of the ground all across China.
The new thing is that all these are fully owned Chinese companies, some private but most are partly owned by the province/municipality.
Today there are 38 Chinese brands of cars, most of which have not yet been signalled outside of China.
The innovation is bursting and new variants of small, medium and large cars appear every month.
There is an enormous overcapacity, which drives the prices to the bottom, so there will be consolidation in the coming years.
The coming ten years will be the Decade of the Chinese Car.
Goran Christiansson's Blog 