In spite of the crisis that the country’s auto market is going through, Chery has not cut back on business activities in Russia. In fact, the company is planning to expand the range of vehicles available to Russian customers, as well as to increase the pool of dealerships in the country.
Xu Jiangsheng spent 5 years working in a similar position in Spain with Haier, the largest Chinese home appliances manufacturer. He first came to Moscow 10 years ago, when the city looked very different from the way it is today. Even during his first visit, Jiangsheng was impressed with the Russian capital – the people, the unique architecture and the city’s own special flair. He liked everything except for the weather, especially the winter. It was tough getting used to such low temperatures. Even back then, Mr. Xu noted that Moscow is a city with a lot of energy and that you can turn into the most ambitious plans into reality here. Over the past 10 years, this energy allowed Chery to establish itself on the Russian auto market.
Xu Jiangsheng has been permanently living in Moscow for 9 months and is starting to understand Russian culture and customs, as well as learning first-hand how to make a Chinese auto brand successful on the Russian auto market.
“In spite of the fact that the situation on the Russian auto market, and the economy in general, is not the most simple, we at Chery understand that the country has tremendous potential for growth,” Mr. Xu says with confidence, “I must point out that, judging by my interactions with people here, people who live in Russia have a lot of patience. They probably learned how to be patient from the long winters.”
The Russian car market has not stabilized yet. For example, sales in Russia amounted to 2.3 million cars in 2014, but forecasts for this year amount to just 1.3 million cars. But there are also some positive aspects of the Russian market – it’s large capacity, as well as fairly low levels of motorization. These other factors will stimulate growth in car sales after the market downturn is over.
Before working in Russia, Mr. Xu worked in Spain for several years. He recalls that the work culture in Spain resembled the work culture of Europeans in general. It’s different in China. Russia is located between Europe and the East but, according to Mr. Xu, still adheres to European business management standards. “At the same time, I notice a lot of Russians have Asian management habits,” he says, “For example, many people work over the weekend, which is almost unheard of in Europe.”
When Mr. Xu first came to live and work in Russia, he struggled for a long time with finding a balance between European and Eastern styles, which he encountered in business, the economy and even everyday life. His partners and colleagues from the Russian Chery office helped him find this balance.
During his time in Russia, Mr. Xu has done a lot of traveling in the European part of the country. He also visited several cities located past the Urals. He was, of course, impressed by the scale of the country, by its beauty and nature, the different cities and their local flair, as well as the warm welcome he received everywhere.
Xu Jiangsheng is in charge of developing the Chery brand in Russia. Locals are very familiar with the brand, which is first and foremost due to Chery’s extensive history. The company has been on the Russian market for over 10 years. Over the years, Chery has been able to transfer its technical competencies to the Russian market. According to Mr. Xu, Chery will introduce three new crossovers in Russia in 2016-2017 – Tiggo 5, Tiggo 3 and Tiggo 2. “It doesn’t matter whether or not we’re in a crisis right now,” he says, “The company needs to keep working with its client base in Russia and is simply obligated to offer the newest and most up to date cars available.”
The attitude Russian buyers have toward Chinese cars has changed radically over the past few years. Of course, all Chinese companies that have been operating in Russia played a role in this change in perception, including Chery. This is more than just the work of marketing. It also entails constant technical improvements made to the cars Chery supplies to Russia. The integration of new facilities for the manufacture of new cars allows Chery to guarantee good quality and durability of their products.
There is also the work done by the customer service department in the company, specifically the after-sales service division. Chery has over 100 dealerships in Russia. The company constantly works closely with the dealership network in order to ensure that customers have access to good quality, timely support. The Russian Chery team has achieved great results in the customer service sector. Just recently, the team received an award from the company’s head office. They had placed second in the world in the international Chery customer service competition “Super Skilled 2016.”
“It’s no secret that the quality of a car directly impacts consumer attitudes toward the brand,” the Deputy CEO of Cherry International says, “But the efforts of the whole team also play a part in creating a positive image. The Chery office in Russia has a lot of employees that have been there since the beginning. They are loyal to the company and its goals and do a lot in order to make sure our values are communicated to the Russian auto market.”
Being efficient on a market that’s going through a downturn is impossible without having a special long-term strategy. Chery has a strategy like this, and one of the most important points on the list is localization of production in Russia. The company is currently discussing plans to localize production with our Russian partners and is looking for a production facility.
Another important area is the expansion of our consumer audience. Once the new Chery crossovers are introduced, the company will be able to offer Russian clients the most popular models, attract the attention of younger motorists and increase customer loyalty.
A company needs an effective dealership network in order to have good sales numbers. Further development of the dealership network is also a part of Chery’s strategy in Russia. Extensive development is planned even on very competitive markets like Moscow, St. Petersburg and other big cities.
Note from Capital Ideas:
Chery Automobile Co., Ltd. is a Chinese auto company founded in 1997. CHERY currently manufactures 900,000 cars of 21 different models. Chery Automobile Co., Ltd includes 6 automobile plants and 11 assembly plants all over the globe. The company is a leader among Chinese car manufacturers in terms of export volumes. Chery cars are supplied to 80 countries, including 4 European countries. Chery was named the most recognizable Chinese brand in Russia at the 15th annual “Automobile of the Year in Russia 2015) At the end of April of this year.
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