At 62, Yin Tongyue is eager to thrust Chery back into the spotlight for the younger generation.
During the April 12 brand event of iCar, Chery’s inaugural new energy vehicle brand, Yin, chairman of Chery, invoked “youth” 22 times in his ten-minute speech, likening himself to a “five-star hotel bellboy,” with the aim of catering to young customers.
His eagerness transcended mere slogans. iCar unveiled two new product series that evening, including the electric off-road vehicle model iCar V23 and the off-road multipurpose vehicle (MPV) model iCar X25. Alongside the initial model, iCar 03, the brand has now introduced a total of three product lines: 0, V, and X, each tailored to target different market segments.
In the latter half of 2023, Chery collaborated with Smartmi CEO Su Jun to establish iCar, with the goal of transitioning its focus to the NEV business in less than six months. Serving as the chief product officer of iCar, Su Jun is tasked with devising innovative designs. At Smartmi, Su Jun spearheaded the development of numerous smart home products, such as air purifiers and humidifiers. Notably, over 10 million units of the air purifier were sold globally within five years, setting a record. This expertise has enabled Su Jun to distill a formula for creating popular products, which he now applies to the development of new offerings for iCar.
In collaboration with Su Jun, iCar sold 10,000 units of the iCar 03 within a month of its launch, with 2,113 units sold in the first ten days of April, marking an 81% increase compared to the previous month. During the event, Yin expressed his confidence that Chery’s monthly NEV sales would witness a significant surge.
Transitioning from its longstanding reliance on fuel-powered vehicles, which accounted for 71.3% of total sales with 1.3413 million units sold in 2023, Chery is now embracing the electrification trend. However, unlike its old rivals Geely and Chang’an Automobile, Chery has yet to establish a prominent NEV brand of its own.
This divergence from their anticipated trajectory is not what Chery had envisioned. Yin once shared internally that, in 2024, Chery would shed the label of not selling NEVs, recognizing that the domestic market increasingly leans toward NEVs for profitability, particularly through the promotion of plug-in hybrid and all-electric vehicles.
In February, iCar’s first model, iCar 03, exceeded Chery’s sales expectations, necessitating overtime work to expand production capacity. This experience solidified Chery’s commitment to iCar, with reports suggesting that the company now views the brand as a “special economic zone” to be developed with full vigor.
While the successful sales of iCar’s inaugural model have positively impacted Chery’s transition toward NEVs, intensifying competition prompts more automakers to explore novel marketing strategies. At the onset of 2024, William Li (also known as Li Bin), chairman and CEO of Nio, conducted multiple live streams to bolster engagement with his brand. Wei Jianjun, chairman of Great Wall Motors, also announced plans to host an online preview of the navigation-on-autopilot (NOA) feature developed by his company.
Having collaborated with Huawei and Su Jun respectively, Chery has keenly felt the shifts in its business environment. The company’s response thus far has primarily prioritized the development of Luxeed. According to a Chery insider, Huawei imposes stringent requirements across all facets of Luxeed products. In resource-constrained situations, Huawei is noted for not compromising on various demands, prompting the Chery team to explore diverse methods to meet these requirements.
Yin highlighted Huawei as a “role model” during the launch of the Luxeed S7 in April, citing its relentless pursuit of product and technology perfection from which Chery is learning. In an internal address at the end of 2023, Yin also announced Chery’s comprehensive benchmarking of Huawei, both in organizational structure and culture.
However, according to a report by 36Kr, some employees believe that the new management style is incompatible with Chery’s culture. Since the end of 2023, overtime has become more common, with stricter attendance oversight, deviating from the company’s previous adherence to an eight-hour workday.
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Su Jun has previously shared his philosophy on creating popular products, emphasizing the importance of convergence, which entails heavy investment to enhance a product’s efficiency, akin to Apple’s iterative approach to the iPhone. Conversely, divergence necessitates continuous trial and error, which can be more resource-intensive.
This strategic approach is evident in iCar, with all three models prioritizing off-road capabilities, tailored to target distinct market segments. Given the recent sales performance of the iCar 03, Su Jun’s theory appears to be bearing fruit.
For Chery, collaborating with Su Jun presents a more cost-effective avenue for transitioning to NEVs. In the Luxeed project, Huawei primarily handles design aspects, while Chery focuses on meeting Huawei’s specifications. With Su Jun, Chery takes the lead in collaboration, outsourcing certain aspects such as product design. This collaborative model enables Chery to develop its unique automaking style, applicable across various vehicle models, thereby leveraging its experiences to build sub-brands.
Instead of relinquishing its “soul” to Huawei, collaboration with Su Jun may facilitate the exploration of new offerings tailored to specific market demands in a more agile manner.
Nevertheless, the paramount concern for Chery remains its own evolution: the imperative to relinquish outdated practices and embrace a forward-thinking mindset to safeguard its future.
KrASIA Connection features translated and adapted content that was originally published by 36Kr. This article was written by Tian Zhe for 36Kr.