In late August, a grand commemorative ceremony was staged at Chery ZGT Plant in Aragua, Venezuela, announcing the operation of the plant. Among attendees there were Government officials, including Ricardo Menendez, minister of science and technology of Venezuela and Rafael Isea, governor of Aragua. Venezuelan President Hugo Rafael Chavez sent a video of congratulation, naming two new Chery models in person.
The plant’s completion has made Chery the only Chinese automaker that has gained a passenger vehicle assembly permit and won an import quota from Venezuela, laying a solid foundation for Chery’s future development in Venezuela. Then what makes Venezuelans favor Chery cars so much?
Firstly, the outstanding quality of Chery cars is acknowledged by Venezuelans. Chery cars entered Venezuela in May 2006, and were immediately well received by Venezuelans for its fashionable appearance and high cost performance. 3,476 units were sold in the year. Afterwards, Chery’s sales in Venezuela spiraled up. However, imports of Chery cars were restricted by Venezuela’s policies for automobile import quotas, leading to short supplies of Chery cars in Venezuela.
Secondly, Chery has brought automobile technology urgently needed by Venezuela’s auto industry which was started in the early 1960s. There are currently 15 automobile assembly plants in Venezuela with a total capacity of 250,000 units. European, American, Japanese and Korean companies dominated automobile production and sales in Venezuela. International automobile giants such as Chrysler, GM, Ford, Honda, Toyota, Mitsubishi, Volkswagen, Fiat and Renault have also built plant in Venezuela. In contrast, Venezuela’s national auto industry has grown slowly. At the same time, the Venezuelan government has been criticizing automakers like Fiat and GM for not sharing technologies with their branches in Venezuela, leading to technical stagnation of Venezuela’s auto industry. As China’s largest proprietary automaker, Chery had applied for 5,981 patents and won 4,118 by late May 2011, ranking first among Chinese automakers. It is due to a growing number of core technologies that Chery has confidence and strength to sell its cars to more than 80 countries and regions, thereby delivering cost-effective cars, job opportunities and automobile technologies urgently needed by locals. They are what Venezuela needs. Chery’s plant in Egypt is the best example. Upon entry into Egypt, Chery established a manufacturing base first, and accomplished a parts localization rate of 45% afterwards, thus not only taking technologies and management to Egypt, but also stimulating local employment and taxation and gaining high praise from the Egyptian government.
It is due to Chery’s advantages in product quality and technical innovation that has earned it attention and support from Venezuela including the Venezuelan government. The operation of the plant in Venezuela marks a great step of Chery’s strategy of “going out”. After years’ steady and fast development, Chery’s globalization has transited gradually from simply exporting vehicles to establishing bases, taking roots and constantly advancing overseas localization through diversified technical cooperation with international capital. Based on market situation, Chery has adopted diverse modes such as vehicle export, CKD, joint venture and cooperation, and all-round investment to constantly boost its market radiation and degree of localization. In the future, Chery will proceed with globalization in such aspects as product R & D, parts purchase, vehicle manufacturing and sale, accomplish optimal allocation of resources worldwide, sharpen system competitiveness, and participate in global market competition, to deliver more energy-saving, safe and environment-friendly products to consumers around the world.