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THE WAY OF CHERY TO ACHIEVE THE MOST SUCCESSFUL AUTO BRAND IN CHINA

Thesis Yan Tao Degree Programme in International Business International Marketing Management

SAVONIA UNIVERSITY OF APPLIED SCIENCES Business and Administration, Varkaus Degree Programme, Bachelor of Business Administration, International Business, International Marketing Management

Author Yan Tao Title of Study
The Way of Chery to Achieve the Most Successful Auto Brand in China

Type of Project Thesis Supervisor of Study
Virpi Oksanen

Date
14.12.2010

Pages
62+3

Executive organization

Abstract
The automobile market in China is in the state of growth. The development of new energy vehicles and the automobile industry is taking place in the forms of regrouping and restructuring. This offers Chery a great opportunity to develop and promote the brand. As one of the most influential and famous auto brand, Chery Auto has achieved an extraordinary growth rate and has become the pride of Chinese national automobile industry. Nevertheless, there is still certain potential in product quality, service and business culture which develops the brand image further. In consequence, issues regarding to manufacturing, service and business culture are needed to improve and strengthening. However, the brand advantage of Chery Auto is not protruding. Compared with international automotive corporations, Chery Auto is not dominant in brand recognition and brand core value. Furthermore, multi-brand strategy leads to dilution of major brands. There are many sub-brands under Chery; nevertheless, no sub-brand achieves big sales. None of Chery Auto’s four sub-brands, Chery, Rely, Karry or Riich, is dominant in the automobile market. Its position in market is not stable. The purpose of this study is to find out appropriate branding strategies for national independent automobile manufacturer, Chery Auto. Consequently, information concerning strategic brand building and brand equity are required. Pivotal findings of this thesis are through both qualitative and quantitative studies. Qualitative references are entirely from official websites or governmental sources while quantitative data obtained from questionnaires. Based on the research and studies, proper branding strategies are found for Chery Auto.

Keywords
Branding Strategies, Automobile Industrial Restructuring, New Energy Vehicle, Chery Auto

Note

TABLE OF CONTENTS

1 INTRODUCTION 1.1 Chinese Automobile Industrial Restructuring 1.2 New Energy Vehicles’ Condition 1.3 Chery Auto Co. Ltd 2 MARKETING ENVIRONMENT OF AUTOMOTIVE INDUSTRY IN CHINA 2.1 Automobile Industry in China 2.2 Brand Environment 2.2.1 National Independent Brand 2.2.2 Joint Venture Brand 2.3 SWOT Analysis of Chery Auto 3 BRANDING 3.1 Role of Brand 3.2 Category of Branding 3.3 Strong Brand Establishment 3.4 Brand Equity 3.5 Brand Portfolio 3.6 Strategic Brand Building 4 RESEARCH METHODOLOGIES AND SURVEY FOR CHERY 4.1 Research Problem and Research Methodology 4.2 Results of Survey 4.2.1 Personal Information of Survey Respondents 4.2.2 Respondents’ Acknowledgements of Chery 5 BRANDING STRATEGIES FOR CHERY

7 7 9 11 13 13 16 16 17 18 21 21 22 23 26 32 34 40 40 41 41 44 52

5.1 Developing Brand Equity Strategy 5.2 Brand Portfolio and Brand Hierarchy Strategies 5.3 Suggestions for Chery 6 CONCLUSIONS REFERENCES APPENDICES

52 53 54 57 59 63

TABLES AND FIGURES

Figure 1 Annual Automobile Sales in China from 2001 to 2009 (million) Figure 2 Annual Automobile Sales in China from 2001 to 2009 (million) Figure 3 Annual Sales of Chery Auto From 2004 to 2009 (million) Table 1 SWOT Analysis of Chery (Chery Auto, 2010) Figure 4 Why Is It Hard to Build Brands? (Aaker, 2002, 27) Figure 5 How Brand Equity Generates Values? (Aaker, 2002, 9) Figure 6 Respondents’ gender Figure 7 Respondents’ age Figure 8 Respondents’ occupation Figure 9 Respondents’ awareness of domestic auto brand Figure 10 Rates of respondents heard about Chery...
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