Marketing plan for Chery Automotive

Marketing Plan for Chery Automotive - Market Analysis

The Chinese producer Chery Automotive manufactures a wide series of automobiles and they will have to place them onto the market and address them based on product features and customers' demands. In a first line of thoughts, the Chery automobiles will address all automobile owners as well as non-owners who are interested in purchasing a car. As such, the Chinese cars will be addressed to all sorts of incomes as well as to those individuals who like either a luxurious car either a compact hybrid.

The American automobile market is a rather dynamic one, in which new technologies are being developed every day and new features are constantly being incorporated into the cars. The major players on the American automobile market are General Motors, Ford and Daimler-Chrysler. They sit at the heart at the American economy and industry and influence the population on numerous areas, such as:

out of 10 American auto works are employed by them they impact 7 million American jobs, as compared to 1.8 million jobs influenced by Japanese and other car manufacturers they spend tens of billions annually on research and development in order to improve the automobiles they purchase almost 80% of all auto components manufactured in the United States they build 7 out of 10 cars and trucks produced in America and are among the largest exporters they spend more than $12 billion on health care and provide it to 2 million Americans (Weber Chevrolet, 2008) less favourable particularity of the American automobile industry is the fact that the major American car manufacturers, such as Ford or General Motors, are generally focused on producing large and luxurious vehicles, which consume large amounts of fuel and rather expensive to maintain. And the American consumer demands more and more fuel-efficient cars. This opens the door for foreign manufacturers who are focused on producing compact cars which consume less fuel. But onto the American market, the Japanese manufacturers hold supremacy over these types of cars. Therefore, the Chinese manufacturer might encounter serious competition from long established Japanese car manufacturers, such as Toyota, Nissan or Honda. And in order to overcome this competition and ensure the success of their operations on the American territory, the automobiles manufactured by Chery Automotive will have to meet several demands and wants of customers. These would refer to:

The stated functionality of the Chery automobile would be that of serving as a transportation means

It would have to be sold at highly competitive prices, even lower than the Japanese cars

It would have to serve customers' needs better than the American cars, meaning that they would be smaller, cheaper, consume less fuel and would be easier to upkeep

It would also have to serve the need for luxurious but ecologic car.

Based on product particularities, two types of target markets can be identified. As such, a first target market will be formed from those individuals who register above medium incomes and to whom a car is more than a means of transportation. Onto this target market, the car manufacturer will place automobiles in the same category as the luxurious Eastar.

The compact cars and the fuel-efficiency vehicles will be addressed to another target market. This can be divided into two sub-categories, based on their characteristics. As such, a primary sub-target market will be formed from those individuals who register medium and below medium incomes and who wish to purchase a compact car due to financial reasons. Then, the second sub-target market will be formed from those individuals who register both medium as well as above medium incomes, but care about preserving the environment; these individuals will purchase the fuel-efficient cars.

A new and uncharted target market can be identified and it would consist of those individuals who do not currently own a car, nor did they ever, based on ecological reasons. In this order of ideas, Chery Automotive can address them by presenting the benefits upon the environment of the compact and fuel-efficient hybrids.

Given that the Chinese vehicles will be sold onto the American market, it is only natural to look at the automobile industry from a statistical perspective, such as the classification system implemented by NAICS. From this stand point, the Chinese cars will fall under the category 42311, detailed on 423110 - Automobile and Other Motor Vehicle Merchant Wholesalers. These regulations have been installed starting with 2002 (Official Website of the North American Industry Classification System, 2008).

All signs indicate a drawback of the American automobile industry, which materializes in the fact that more and more Americans choose to purchase foreign cars in the detriment of the American vehicles. This trend has been common in the North America of the past years and is expected to continue. Both years 2005 and 2006 ended with a substantial decrease in sales, compared to the previous year, respectively 2004 and 2005. The decrease was of 600,000 units in 2005 as compared to 2004 and of 650,000 units in 2006 as compared to 2005 (DesRosiers, 2007). Chery Automotives is not currently a part of the American car market as it has yet to enter this new territory.

The market of car components is highly similar to that of automobiles in the meaning that sales and revenues have decreased and they are also facing fierce competition from the Japanese manufacturers. Among the most relevant suppliers of auto components, one could name the AYD North America, Delphi or Smart Dealer Parts.