• Chery to launch CKD Tiggo 8 Pro and Omoda 5 by July 2023
• Chery believes its products are superior to Japanese and Koreans
• Most pertinent question Malaysians want to know is – how long will Chery stay this time, and will its after-sales be better than Geely’s Proton?

How do you tell if someone understands the inner workings of China’s automotive industry? It’s when they understand the Chinese lingo BBA, which is short for Benz, BMW, Audi – the hierarchy of the leading luxury brands in China. At least that's what we thought.

To the folks at Chery however, it’s not BBA, but BBE with the last letter referring to Exeed, Chery’s upscale brand to unseat Audi. Did we hear a chuckle from you? But that’s how Chery is. There is no limit to their ambition.

For now, the upscale Exeed brand is aimed at Japanese and German brands like Toyota and VW in China, while the company’s namesake Chery brand is aimed at domestic Chinese brands like Geely and second-tier Asian brands like Hyundai and Kia. The aim for the future however, is to replace the A for Audi in BBA with E for Exeed.

Foolish or not, we will find out in about 10 years. The first Exeed model was just launched earlier this week and if Toyota’s and Hyundai’s experience with Lexus and Genesis are an indicator, it takes around 10 years, or two generations of products to establish a luxury brand – and that’s for the very well-established and trusted Toyota and Hyundai.

Also read: 11 photos why Chery should introduce the Exeed Yaoguang in Malaysia

Like many Chinese brands, there’s a lot of chest thumping bravado and strong sense of ‘can do’ spirit at Chery.

Outsiders may see this as empty talk, which is understandable because the Japanese will just keep their heads down and deliver the results. But when you are young Chinese upstart and everyone looks at your brand like it’s some automotive comedy with an oddly spelled name, you have nothing to lose.

So, you beat the gong, rattle the gates, shout at top of the mountain, anything to get attention as you make a bold proclamation that you and your team are then bounded to. How else are you going to beat established rivals who have a 50 – 100 years head start from you?

At Wednesday’s meeting with the Malaysian press, Charlie Zhang, Executive Vice-President of Chery International is keen to point out that Chery has been the one flying China’s flag to the rest of world, as Chery is China’s No.1 exporter of passenger cars for the last 20 years.

Main export destinations include Egypt, where Chery is the No.1 brand with an 18 percent market share, followed by Kazakhstan (9 percent), Ecuador (6 percent), and South Africa (5 percent).

But this factoid has zero relevance to us Malaysians (our driving conditions have little in common with those countries). Proton-badged Geely cars aside, Malaysians are still doubtful of Chinese car, especially when a Perodua or a Toyota makes so much more sense.

Nevermind about Chinese, Malaysians are only starting to warm up to Korean makes, and that’s only because Bermaz is doing a great job with the Kia Carnival. The same cannot be said for the folks at Hyundai Sime Darby. In short, it was the Malaysians who made progress for Korean marques (Kia), not the Koreans.

And why should we believe that it will be any different with the Chinese? Afterall, it was Proton's established name and its wide dealer network that made Geely succeed in Malaysia.

Yes, Geely's new products gave Proton some much-needed boost, but 60 percent of Proton's sales came from PIES models, not the Geely-sourced X50 or X70.

Knowing that Malaysians are still not convinced with the quality of Chinese cars, Zhang flashed another slide that shows built quality data gathered by the independent American market research agency J.D. Power, showing Chery’s improvements over the last 15 years.

J.D. Power says Chery now has a score of 215 problems per 100 vehicles, which better than international brand’s average of 216 (lower scores is better).

But quality is just one factor. Malaysia is a very resale value-driven market, and good resale value is something that takes times a very long time to build.

Chery however, intends to sidestep all that by giving Malaysians a substantially better car than Korean and Japanese rivals offer. They believe that the superiority of their products will push through whatever doubts customers will have.

“I visited the dealerships of our competitors. I am very confident. The products that we will launch here (in Malaysia), in terms of design, technology, performance, the EV portfolio, we are very, very strong,” said Zhang.

“If you compare the new products that we are going to have, compared to existing models from Perodua, even Toyota or Honda, I think we are not at the same level. Our cars are very beautiful. The design, the interior, is very different,” he added.

Chery also has a wide portfolio of battery EVs and plug-in hybrid models – plug-in charging-capable electrified vehicles that Chinese carmakers often refer to as ‘New Energy Vehicles’ – that will be made available to Malaysia as soon as the market is ready to support such products.

Zhang says Chery’s range of plug-in hybrids are unrivalled, with electric range of close to 100 km, which essentially allow daily commuters to drive it like a battery EV model.

“This is very, very important. In the future, 100 percent of the vehicles we will sell will be electric – either plug-in hybrid or battery electric. This is something very, very important. That is why I believe we have a good opportunity here. Over the past couple of days, I have a chance to meet the officials (at Malaysian government) and explain to them our product portfolios and product strategy,” said Zhang.

The first of Chery’s new generation products under the new Chery Malaysia company will be launched in July 2023.

The 7-seater Chery Tiggo 8 Pro and 5-seater Chery Omoda 5 – both locally assembled (CKD) at a yet-to-be-disclosed location in Malaysia – will spearhead Chery’s return.

We look forward to Chery’s re-launch in Malaysia. We sorely need some new competition to break the four-way control of Proton-Perodua-Toyota-Honda, four brands that control nearly 85 percent of Malaysia’s new car sales.

Also read: CKD Chery Tiggo 8 Pro and Omoda 5 to start production in June 2023 - deal with Malaysian partner signed

Chery might be re-entering Malaysia on a high note but there’s a strong deja vu feeling because we've heard the same message from Volkswagen 10 years ago.

Sometime around 2013, when Volkswagen was still at its peak and Dieselgate was kept well hidden. Then CEO Professor Dr. Martin Winterkorn was whipping his generals around the world with his Strategy 2018 goal of overtaking Toyota within 10 years, and Malaysia was identified as an important growth market.

A high-powered delegate of Volkswagen board members flew into Malaysia on a private jet. They visited dealers of all major brands here – Proton, Perodua, Toyota, Honda, and Nissan (which still mattered back then).

The local VW office also arranged to fleet of competitor vehicles – from Malaysia’s best-selling Perodua Myvi to a Toyota Vios and Honda City, to a Toyota Corolla Altis and Honda Civic, as well as the Honda Accord and Toyota Camry – for the board members to test drive.

The Germans concluded that their VW cars are far superior than anything the Japanese and Malaysian rivals have to offer. They couldn’t understand why Malaysians are not buying more of their Volkswagen Polo and Vento.

They concluded that it must be a marketing issue, something which can be easily solved with money, with they have plenty (just like Chinese companies today).

Filled with overflowing confidence in their products, Volkswagen Group Malaysia announced a bold 100 percent jump in sales for 2014. The then sales chief of China+ASEAN region Soh Wei Ming, a Singaporean national, was aiming for an ‘eventual’ 10 percent market share, or 50,000 cars per year target - the level Nissan was doing then.

We all know how that story ended. VW crashed and burned so badly that it never recovered until today. Far from challenging Toyota, VW now sells just around several thousand cars a year. The Polo / Vento that VW board members say is a far superior product, has been chased out of Malaysia.

Dieselgate is irrelevant to Malaysia because we hardly sold any TDI engines here. VW’s downfall in this part of the world was 100 percent due to its own hubris, itself a result of their 0 percent understanding of their customers’ needs.

Malaysian buyers are not as stupid as the Germans think. We just not see our cars from the eyes of a German engineer, and why should we? In what world is a German the arbiter of what is the best car for us Malaysians? 

The visiting VW board members test drove all the competitor Japanese models, visited competitor showrooms, but never once did they talk to a customer, or see for themselves the many angry customers at their service centres (then).

The Japanese at Toyota, Honda, and Perodua however, live and breathe customer needs.

Toyota executives for example, don't necessarily drive competitor cars at high speeds. They do however, check on their service centres, get their shoes dirty to see how farmers in Chiang Rai and Cameron Highlands use a Toyota Hilux, speak to Toyota Hiace tourist van drivers in Bangkok, experience driving the Toyota Avanza in Jakarta traffic and flash floods.

Speaking to customers, seeing for themselves how customers use their cars, is the foundation of Japanese management, they call it genba (sometimes also spelled as gemba).

In 2017, Geely in typical Chinese fashion said Proton will become the No.3 biggest passenger car brand in Southeast Asia by 2027.

Today, Proton is still nowhere near in achieving that, and is still hobbling at No.6. Meanwhile, the Toyota-Daihatsu-trained Perodua quietly took the No.3 spot in ASEAN last year, and they don’t even bother talking about it.

Why? Because Perodua knows such that chest thumping has zero relevance to their customers who are waiting 6 months for their 2023 Perodua Axia. That’s empathy, that’s staying focused on the only goal that matters – customer satisfaction. Achieve that, all other business goals will naturally fall into place.

Also read: EQ is more important than IQ - Perodua explains why it doesn't measure success by numerical KPIs

We want to cheer Chery on, but we also want to remind them to not repeat the mistakes of the proud Germans at VW. The Germans failed to understand that few customers here buy a car because of its technical superiority. When Malaysians buy a car, they are buying into their trust in the brand, rather than the car’s engineering superiority.

The centre of a car company’s business is people, not cars. Get this right and Chery will surely win the hearts and minds of Malaysians.

There is no doubt about the superiority of today’s Chery products (see it in July, you will be wow-ed) but people, not products, close the first sale; while service centres, not showrooms, push the second sale. Just ask the Koreans at Kia on why their superior products were ignored by Malaysians until Bermaz was appointed as the new distributor.