Good start for Chery in Malaysia, bigger push in 2024

While Chery was in Malaysia as far back as 2003, it would like to treat its reappearance not as a ‘return’ but more as a new start. It was a different period in the Malaysian market when the carmaker began selling its passenger cars here, the first from China to do so. And back then, the business was managed by a local company, rather than with involvement by Chery.

Times have changed and while the government’s focus on EVs and the incentives (tax exemption) it is offering that have seen the sudden influx of brands from China in the past year, Chery started off not selling an EV. But its entry is not surprising – it is, after all, the largest exporter of passenger vehicles from China and has been for 21 years. So it was a matter of time that it would come into the Malaysian market again.

It’s been less than a year (since May 2023) that Chery has been back in Malaysia and it has certainly made impressive progress. At today’s slick and well presented media briefing, the Chery Auto Malaysia team provided a summary of what had been achieved in the past year, as well as a glimpse of what to expect this year.

Over 4,500 units in 4 months
Following the official launch in July, local assembly of the OMODA 5 and Tiggo 8 began at the Inokom plant in Kedah in August, with deliveries to the first 800 customers starting from September. By year end, 4501 units of both models were delivered to customers around the country. The OMODA 5, with its advanced styling, accounted for the larger proportion of sales.

Building the network
Well before owners began using their vehicles, Chery Auto Malaysia made sure that the aftersales network was in place to support them. Before September, there were 23 Chery outlets, of which almost half were 3S, which provide both sales and aftersales.

The push to quickly grow the network continued during the fourth quarter and there are now 31 outlets, of which 18 are 3S or 4S (which have body repair services as well). This year, another 16 outlets will be added and they will only 3S or 4S, with 6 to be the latter.

Aftersales a high priority
Aftersales support is important for Chery Auto Malaysia and right from the start, the company has made sure that there are sufficient stocks of parts so customers will not be inconvenienced waiting. They have obviously noted the anger and frustrations of owners of another brand who have had to wait months for parts and aim to make sure Chery customers don’t go through that experience.

The company has also contracted Tiong Nam Logistics to handle storage and distribution of spare parts. Tiong Nam Logistics is one of the largest logistics service providers in the Asia-Pacific region with experience in the business going back almost 50 years so it should be able to ensure that Chery service centres get the parts they need

In connection with this area of aftersales support, the company has the Chery Insurance Program (CIP) which is in partnership with three insurance companies. CIP offers a broad range of benefits, with claims up to RM20,000 being assured of speedy processing. That’s important to an owner whose vehicle has been damaged and wants repairs finished as quickly as possible.

The sales numbers may be small – it’s only been 4 months – but what’s important is how those who are now owners feel about the brand. According to Chery Auto Malaysia’s Vice-President, Lee Wen Hsiang, a sales satisfaction survey of more than 1,000 customers showed an exceptionally high score of 94 points out of 100.

“From the start, we have made it a priority to resolve all customer issues promptly and this commitment remains a top priority for us at Chery Auto Malaysia in 2024 and beyond,” he said.

He added that when Chery made its appearance, there were some comments about certain negative aspects of the brand (perhaps based on experiences and perceptions from 20 years ago) and every effort was made to show that the brand is very different today. After all, it is now Chery – the owner of the brand – that is handling the business so it would want to ensure a bright future in Malaysia.

Three new models in 2024
Looking ahead, there will be at least three new model launches this year. One of them is already known and it is the OMODA E5, an EV. This will be launched before the end of the first quarter and orders are already being taken.

The second model will be the Tiggo 7 Pro for those who prefer a slightly smaller SUV than the Tiggo 8, with less seating space. As with the other two models already in the market, the features list will be extensive and generous and it will be powered by a 1.6-litre TGDI engine with 197 ps/290 Nm and a 7-speed DCT. This will go on sale during the second quarter of the year.

The third model remains a secret but is said to be a small model and will be at a ‘more affordable price’ level. It will be promoted as ‘My First Chery‘ to bring Malaysians into the Chery family. The OMODA 5 is priced at around RM109,000 so expect the new model to be less than that.

It was confirmed that it will not be an EV and looking at Chery’s range, there are a number of possibilities but we’ll have to wait till the fourth quarter of the year to know which one.

Chery Auto Malaysia does not intend to go fully electric as it knows that local conditions will still see demand for vehicles with combustion engines. It has a range of plug-in hybrid models in China but since the government does not want to provide incentives for this category of electrified vehicles, there is no point in offering them here as they would be uncompetitive.

Besides, even in China, despite the government’s push towards New Energy Vehicles for more than 10 years, the percentage of fully electric vehicles is around 40% of the market today. Leo Chen, Executive Vice President of Chery Corporate Malaysia, expects that Malaysia will still see strong demand for combustion engine models for some time to come so Chery Auto Malaysia will offer a mix to cover as many segments as possible.

“It has been an interesting past year for Chery,” said Mr. Lee, emphasising that moving forward, Chery Auto Malaysia will be fully dedicated to constant improvement and customer satisfaction. When asked if the sales volume for the year would be 4,500 x 4 (18,000) units, he said, “That won’t be wrong… but we actually have a higher target than that number for 2024.”