Analysis of Chery Automobile Industry and Competitive Landscape

This report provides a comprehensive analysis of Chery Automobile, a Chinese automobile manufacturer. Part A begins with an industry analysis, utilizing PEST (Political, Economic, Social, and Technological) factors to evaluate the business environment. It then moves on to a competitor analysis, identifying key rivals like joint venture companies (e.g., Hyundai/Elantra, Volkswagen) and indigenous manufacturers (e.g., Geely). The report highlights critical issues faced by Chery, such as challenges in competing with joint ventures and the impact of the 'Easter' model's sales. The report also examines Chery's strategic responses, including the multi-branding strategy and differentiation techniques. Finally, a competitive strength grid compares Chery with competitors like Geely and Volvo, evaluating factors such as brand reputation, customer service, and innovation. The report concludes with a bibliography of relevant sources.

Running head: MANAGEMENT
Management
Name of the Student
Name of the University
Author note

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Table of Contents
Part A.........................................................................................................................................2
A1) Industry Analysis............................................................................................................2
A2) Competitor Analysis.......................................................................................................3
A3) Critical Issues..................................................................................................................4
A4) Competitive Strength Grid..............................................................................................4
Bibilography...............................................................................................................................7

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Part A
A1) Industry Analysis
Chery Automobile is one of the automobile manufacturers which is headquartered in
Wuhu, Anhui. The company was founded in the year 1997 and it is a state-owned
corporation. The different principal products of the company include minivans, passenger
cars along with SUVs. Chery began the production of the automobiles from the year 1999
and their export from China started in 2001. Chery Automobile operates their business in a
dynamic business environment wherein it is entirely influenced by the spending of the
different customers and social trends which are collective.
With the help of PEST analysis, the different factors will be analyzed that will play a
major role in analyzing the positive and negative impact of the same on Automobile industry.
Political Aspect- In the WOO investments, the government of China provided
incentives and protection to auto makers which was strong support from R&D projects for
automobile companies along with protection of intellectual property rights. Based on the
different data from Chery Automobile company, the political environment of China is stable
and it will not affect business of Chery car.
Economic Aspect- The speedy growth of China will be helpful in affecting
automobile industry in number of ways wherein disposable income of the individuals have
increased and the capability of individuals have increased to purchase own cars. The
intervention of the government in the global business sector will be affecting business and
fortunes of Chery car and the competitors.
Social Aspect- As per the case study of Chery Automobile, the broader attitude of the
migration is negative in the market and it can impact Chery Car in order to bring international

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talent to manage their operations in the country. The level of education is high in existing
markets wherein Chery Car is present. Based on the different evidences of Chery Car Case
Study, proper building of research and development center in the local market is required
which will be beneficial for the expansion.
Technological Aspect- The Chinese Government has provided sufficient kinds of
incentives for the technological developments of automobile industry and it has been helpful
in transforming the expectations of the customers in the market as well. The technology in the
automobile industry keeps on upgrading and it is helpful for the automobile makers in
designing cars which are environment friendly in nature.
A2) Competitor Analysis
The two major competitors of Chery Automobile Companies are as follows:
 Joint Venture Companies- In the respective aspect, the different companies such as
Elantra has upgraded themselves to Hyundai to the sixth generation and it has been
one of the most successful approaches which helps the company to become more
competitive in nature. The policy related to pricing is the other aspect which has been
helpful for them in becoming competitive and it has been successful in managing their
operations appropriately. On the contrary, Volkswagen is the other competitor which
has adopted multi step policy related to pricing and it has helped them in securing
competitive position in the market in comparison to Chery Automobile. Indigenous Automobile Manufacturers- Geely is one of the major competitors in the
IAM wherein the respective company has been and they have earned huge number of
shares in the market wherein there has been increase of CN¥208.799 billion in the
revenues which has been earned by them. Geely is introducing different new models

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in the market which will be helpful for them in increasing their market share and
improve their position in the market in comparison to Chery Automobile.
A3) Critical Issues
The different critical problems which were faced by Chery wherein it was being
noticed that the different existing models of Chery could not compete with JVCs and the
middle-end Sedan EASTER was tardy and the word of mouth approach was the other
unsatisfactory aspect which affected the overall financial health of the company negatively.
Moreover, the sales of EASTER only gained 13000 units in comparison to the other
competitor PASSAT which was the major competitor of the company Chery Automobile and
it affected the overall profitability and generation of revenues of Chery Automobile in a
negative manner as well.
In order to improve the overall scenario of the critical issues which were faced by
Chery, it can be identified that there are critical success factors which can be considered by
them in order to improve the scenario and gain competitive advantage in the overall
automobile competitive business environment. Chery Automobile company tried to adopt the
multi-branding strategy wherein the company in which the organizational structure was
changed in 2010 and they implemented divisional organization structure which consisted of
the COWN unit and it helped in improving their operational efficiency. Moreover, with the
implementation of differentiation technique which was followed by Chery Automobile, it
tried to provide the different customers with the similar featured cars with lower pricing
strategy that helped them in managing their brand image appropriately.
A4) Competitive Strength Grid

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Your
Offering/Key
Competitors
Reputation Variety Location Uniqueness Customer
Service
Chery
Automobile
Prestigious
Brand
Multi-
Brands
China Yes, it is
present
Excellent
after sales
service
Geely Good
Brand
There is
inclusion of
the
different
Volvo
buses and
SUVs
Globally Yes, the
innovation
and
developmen
t are the two
major
prospects
which helps
them in
competing
with Chery
Automobile
and it
improves
the overall
efficiency of
the
organization
in
There is
innovative
after sales
services
which are
being
provided to
the
customers in
comparison
to the other
competitors
such as
Chery
Automobile
which will
be beneficial
in low cost
of products

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comparison
to the other
competitors
present in
the market
development
and unique
pricing
strategies
Volkswagen Excellent
Brand
Motorsports
and Hybrid
cars
Globally Excellent
Advertising
Yes, it is
present and
the different
attractive
features help
Volkswagen
in becoming
most
effective
brands in the
market
From the overall competitor grid, it can be identified that Chery Automobile
Company has different competitors present in the market which can affect the overall brand
image of the company. However, with the multi-branding strategy, it has been beneficial for
them in gaining competitive advantage.

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Bibilography
Baker, M.J. and Saren, M. eds., 2016. Marketing theory: a student text. Sage.
Cacciolatti, L. and Lee, S.H., 2016. Revisiting the relationship between marketing capabilities and
firm performance: The moderating role of market orientation, marketing strategy and organisational
power. Journal of Business Research, 69(12), pp.5597-5610.
Felix, R., Rauschnabel, P.A. and Hinsch, C., 2017. Elements of strategic social media marketing: A
holistic framework. Journal of Business Research, 70, pp.118-126.
Frow, P., Nenonen, S., Payne, A. and Storbacka, K., 2015. Managing co‐creation design: A strategic
approach to innovation. British Journal of Management, 26(3), pp.463-483.
Hofacker, C.F., De Ruyter, K., Lurie, N.H., Manchanda, P. and Donaldson, J., 2016. Gamification and
mobile marketing effectiveness. Journal of Interactive Marketing, 34, pp.25-36.
Hollebeek, L.D., Conduit, J. and Brodie, R.J., 2016. Strategic drivers, anticipated and unanticipated
outcomes of customer engagement.
Luo, B., Wang, C. and Liang, L., 2017. Chery Automobile. Asian Case Research Journal, 21(01),
pp.37-80.
Sheth, J., 2017. Revitalizing relationship marketing. Journal of Services Marketing, 31(1), pp.6-10.