Chery's Best-Selling Model Faces Withdrawal Wave

In a fiercely competitive automotive market characterized by a phenomenon known as "involution," the launch of new models represents a pivotal moment for manufacturersSuccess can lead to booming sales, while failure often results in public outcry and damaged reputationsRecent events surrounding the debut of Chery's new energy sub-brand, iCAR, and its latest model, the V23, have illustrated the precarious nature of vehicle launches and the subsequent consumer reactionAmid debates over its configuration and pricing, the V23 has sparked controversy almost immediately following its introduction.

Following examples like XPeng’s G9, which changed its configurations just a day after its launch, iCAR has also faced scrutinyOn the very first day post-launch, the brand adjusted key consumer rights associated with the vehicle.

An after-sales representative from Chery based in Wuhan noted, "After the changes in consumer rights, the enthusiasm for the new vehicle has not matched the pre-sale hypeCoupled with the imminent expiration of national subsidies this year, most customers are in a wait-and-see mode." Here lies a challenge for iCAR as it navigates this intricate landscape.

As a freshly minted brand backed heavily by Chery, iCAR faces the daunting task of survival amidst intense industry competitionThe question remains: how can it thrive in such a turbulent market?

“Hot Model Faces Order Cancellations”

On December 16th, iCAR V23 made its formal debut, a full eight months after it was initially unveiled.

Given the usual pace at which new vehicles are released today, such a lengthy promotional phase feels somewhat excessive

Advertisements

However, during this period, iCAR expended considerable effort in marketing its new model, embedding keywords such as "fun," "trendy," "intelligent,” and “the first boxy car for young people” into consumer consciousness.

iCAR kicked off the V23's pre-sale at the Guangzhou Auto Show in November, attracting over 31,000 orders thanks to its competitive price range of 110,000 to 150,000 yuan and the prior months of advertisingMany believed that the V23 was poised to become a market hit.

However, the launch did not proceed as smoothly as anticipated.

During the three-hour launch event, feedback from attendees indicated it was dull and lacked substanceWhen the official prices from 99,800 to 139,800 yuan were revealed, consumers expressed their dissatisfaction, especially as experiencing the vehicle's smart features required purchasing an additional technology comfort package for 10,000 yuanConsequently, the total price for the technologically advanced version became 109,800 to 149,800 yuan, a mere 200 yuan less than the expected pre-sale price.

In today's market, the “cost-performance ratio” determines whether a new car can emerge as a blockbusterSetting the pre-sale price higher than the official prices without creating a significant price gap has become a common strategy to generate hype among automotive brandsHowever, in iCAR’s case, the product launch failed to spark interest, leading to a wave of cancellations due to configuration issues.

A staff member from Chery’s after-sales service reported that the following day, they were inundated with calls from customers wanting to cancel their orders.

Following the launch, some hosts in iCAR’s online broadcast channels resorted to humorously labeling the vehicle as a “box for young people's leeks” and referring to it as “V200.”

In light of the rapid cancellations, iCAR scrambled to amend the user benefits associated with the new vehicle to regain consumer confidence

Advertisements

Su Jun, the chief product officer of Chery iCAR, took to Weibo to announce a restructuring of consumer privilegesThis includes allowing every pre-order customer to obtain 50,000 points, with an additional 50,000 points gifted by the company, enabling a no-cost upgrade to the technology comfort package, or any item from their storeMoreover, if users missed their national subsidy due to delivery delays, iCAR pledged complete refunds for depositsEven customers who had locked in their orders and received their vehicles would enjoy these updated benefits.

In reality, the reasons for perplexing order cancellations stemmed not only from pricing and benefits but also from issues concerning the vehicle’s configuration.

The entry-level model of iCAR V23, priced at 99,800 yuan, boasts only a 300-kilometer range; the mid-tier model, selling for 109,800 yuan, offers a modest 401 kilometersIn comparison, Dongfeng's Dolphin, priced at 99,700 yuan, delivers a superior 420-kilometer electric range in its base modelAdditionally, the V23 lacks features such as ventilated seats, rear air vents, and uses fabric seats in its lower-tier models, leading to further criticism.

Thus, from being presumed a surefire hit, the iCAR V23 has instead found itself in the midst of an order cancellation crisis, shifting perceptions about its market fate.

Transitioning Begins

Throughout this year, Chery has accelerated its shift toward new energy markets, systematically aligning its five significant brands.

As a key focus of Chery's new energy ambitions, iCAR has been positioned for significant growth

Advertisements

Chairman Yin Tongyue has expressed his commitment, emphasizing that iCAR represents a "new special zone" for Chery GroupThey will extend unlimited support to ensure iCAR achieves a prominent place in the new energy market.

In February of this year, iCAR launched its first product, the iCAR 03. It garnered considerable attention due to its "boxy" design and a formal price that was 20,000 yuan below the pre-sale estimate, which enabled it to capture significant market share in the compact SUV segment.

According to Pacific Automotive data, the iCAR 03 achieved cumulative sales of 41,400 units within the year, averaging over 4,000 units per month since its official launch due to strong initial performance.

By introducing iCAR, Chery has enhanced its positioning in the new energy sectorCurrently, Chery has five notable new energy brands, including Jetour and Exeed, while iCAR focuses on creating a youthful and individualized brand persona.

As a result of this multi-brand development strategy, Chery's new energy sales have surged, with total sales reaching 480,900 units in the first eleven months of this year—a remarkable 214% year-on-year increase, comprising 20.86% of total sales, compared to 18.93% for the entire previous year.

However, unlike many traditional auto manufacturers making a swift pivot to electric vehicles, Chery continues to maintain a degree of focus on fossil fuel-powered cars

In recent years, its FuZhen Power division has developed proprietary technologies such as 8AT transmissions and mechanical four-wheel drive systems.

This strategy can be largely attributed to the fact that nearly half of Chery's sales come from international markets.

Many nations still exhibit limited acceptance of new energy vehicles, particularly in regions like Russia, where gasoline-powered cars predominantly prevailGiven the global situation and Chery's international expansion strategy, a completely swift transition to electric vehicles may not be feasible.

Recent statistics revealed that in November, Chery's export volume peaked at 104,900 units, contributing to a total of 1,046,200 units exported thus far this yearThis marks the first time the group has surpassed a million units in exports within a single calendar year.

Due to the distinctive nature of the group's sales strategy, Chery exhibits a more accommodating stance toward the pace of its new energy transitionsNonetheless, the competitive "involution" underway in China's new energy sector leaves little room for errorThe case of the Zhijie S7 is illustrative; despite repeated adjustments and relaunches throughout the year, its sales remain lackluster compared to its peers, like the more successful AITO Wenjie series.

This vehicle only sold 29,000 units throughout the year, with a mere 315 units sold in NovemberHowever, with the addition of the Zhijie R7, monthly sales jumped to 11,000 units, sustaining the overall brand sales at 114,000 units for the year.

With the accelerated growth of its five new energy brands, Chery's transition is well underway.

Advertisements

Advertisements

Your email address will not be published.Required fields are marked *