China In The Lions Den: Chery Enters Europe With DR3
Whenever I talk to Chinese carmakers, they dream of going to Europe and the U.S.A. I tell them that GM, Volkswagen, Daimler, BMW et al would be dead, would they not have gone to China. “Why do you want to go to markets that are not going anywhere?” They still want to go. “Why to you want to enter a cage of wounded lions?” They still want to go. And here they go again: Chery shows its DR3, a four-door hatchback, known in China as the Fulwin2, at the Bologna Auto Show from December 4 to 12. They want to take it to the European market in June next year.
According to China’s Global Times, the DR3 comes with a 1.5-liter/4-cylinder engine, a 5-gear manual transmission, and a maximum horsepower of 108. In China, the car sells for 53,000 yuan ($7,800). If they could maintain that below €6000 price, it could carve out a nice niche in Europe. But after shipping, customs and VAT, it will be in the sub €10,000 range, and there is plenty of homegrown competition in that range. Which isn’t selling as well as it used to anyway.
Old Bologna hands recall that in 2006, Chery had shown up with a DR3, which promptly was called “RAV4 inspired” (or worse.) The idea was a CKD production with a Fiat engine. It turned into a small scale boutique operation, called “DR Motor” which buys bodies from Chery and brings them up to European specs.
If Chery will import them directly, I predict brisk sales for the first 100 or so of this car. Remember the wounded lion part? European carmakers, all experts when it comes to the capabilities of the Chinese auto industry (the Europeans have been in China long enough to know) are absolutely paranoid when it comes to Chinese cars daring to show up in their back yard. As one German engineer once told me after a few beers: “If you crash enough cars, you will always find one crash that looks real ugly.” Soon in a Youtube near you.
Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.
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Maybe the Chinese want to come to Europe and the US for two reasons a) they are still two of the three biggest markets in the world and potentially high profit and b) the prestige of being able to compete in foreign markets, especially those of countries that developed the modern automobile.
http://www.discuss.com.hk/viewthread.php?tid=12998261&extra=&page=3 OT this bloke travels into middle kingdom, perhaps our main man Bertel can do some deciphering for most of us. Pretty nice road I had to say.