Reads like a Mad magazine parody and made me laugh, although sadly, there is quite a ring of truth in the post.
Some data on Chery Automobile Co., from '05 Guide to China's Auto Market:
Ownership: Chery Automobile Co. - 100%
Models produced: Fengyun, QQ, Qiyun, Son of East, Tiggo
Capacity
2004: 350,000
2003: N.A.
Production
2004: 79,565
2003: 91,223
Unit Sales
2004: 86,567
2003: 85,349
Chery is a smaller player in the China market. The Big 5 controlled 69% of China's rapidly growing market in 2004: First Automotive Works Group, Shanghai Automotive Industry Corp., Chongqing Changan Automotive Group, Beijing Automotive Industry Corp. and Dongfeng Motor Corp. Combined sales of 3.49 million commercial and passenger vehicles in '04, up 24% from 2003. Most of their growth came from companies' joint ventures. But growth of passenger vehicles slowed to 15% last year from 76% increase in 2003 - this is significant because the wisdom is that few of the remaining Tier 2 automakers (there are over a dozen, Chery included) have the resources to compete in the price-driven market that is developing in China.
A quote from this guide:
"More auto companies will report losses and some may go bankrupt before the industry consolidates and restructures into a few big players," said Hu Song, an analyst at Haitong Securities in Shanghai, in an interview with Xinhua news agency.
The Chinese Ministry of Commerce says that makers with capacity of less than one million will not be able to survive, and those with capacity of less than two million will face strong restructuring pressure.
"Faced with intense price pressure in China, and reluctant to be forced into shotgun alliances, some tier 2 companies such as Chery Automotive Co. are looking at exports to Europe and North America as a possible relief valve."
Source: Excerpts from Automotive News 2005 Guide to China's Auto Market
www.autonews.com/chinaguide
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