WUHU, Anhui – Chery’s independent sales and marketing network is falling apart, according to a report in Shanghai Securities News.
As its marketing system spirals into chaos, the most profitable Cowin department has become the hottest commodity. Rely and Riich sales networks are already selling Cowin products behind closed doors.
“We’ve been merged into the Chery sales network,” a Rely and Riich dealer said. “Selling Rely and Riich has been a losing business,” he continued. Ma Deji, vice president of Chery Automobile and general manager of Chery Automobile Sales Co., confirmed the unprofitability and the introduction of Cowin products into these sales networks. But he claimed that the Rely and Riich divisions are only being adjusted, not canceled.
In fact, all four independent sales and marketing networks are undergoing adjustments. But such adjustment may trigger larger crisis. An insider suggests the current plan takes care of Rely and Riich dealers’ interests but will hurt Chery in the long run.
The sales division which owns QQ performs well in volume but does poor in profit, therefore Chery is already cutting production of QQ cars. Rely and Riich’s unprofitability is a well-known fact and the Kerry division is not looking too well either. Cowin being the only profitable brand at the moment is sharing its products with Rely and Riich but both brands have not merged into Cowin. This creates two chains of command which will lead to higher management costs and chaos.
But there is a reason for maintaining the current structure. Chery Automobile president Yi Tongyue stated before: “We will achieve the strategic transformation from quantity to quality even if it means losing a lot of volume.” Cowin is obviously the victim of the transformation but would Chery itself be next? Time will tell.