Chery Automotive U.S. Market Entry: Marketing Plan Analysis
This paper presents a market analysis component of a marketing plan for Chery Automotive, a Chinese automobile manufacturer seeking entry into the American market. It identifies key target markets based on income levels and environmental preferences, examines the competitive landscape dominated by General Motors, Ford, and Daimler-Chrysler, and highlights the growing threat posed by Japanese manufacturers. The analysis evaluates market opportunities stemming from rising demand for compact, fuel-efficient, and hybrid vehicles, while acknowledging threats including entrenched competition and the potential revival of domestic American automakers. Industry classification under NAICS code 423110 and recent sales decline trends in the North American market are also discussed.
- Introduction to Chery Automotive and Its Product Range: Chery's vehicle lineup and broad customer appeal
- Overview of the American Automobile Market: Dominant players, market dynamics, and foreign competition
- Target Market Identification: Income-based and eco-conscious consumer segments
- Industry Classification and Market Trends: NAICS classification and declining domestic auto sales
- Suppliers, Substitutes, and External Environment Analysis: Suppliers, substitute products, opportunities, and threats
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What makes this paper effective
- The paper applies a structured marketing framework by segmenting target markets based on both income level and environmental values, demonstrating layered consumer analysis.
- It grounds its competitive analysis in concrete statistics — such as the 600,000-unit and 650,000-unit sales declines in 2005 and 2006 — giving the argument measurable credibility.
- The paper balances opportunities and threats clearly, acknowledging both the opening left by American automakers' focus on large vehicles and the risk posed by established Japanese competitors.
Key academic technique demonstrated
The paper demonstrates systematic external environment analysis consistent with early-stage marketing planning. By identifying customer needs, competitive forces, industry classification, and macro-level market trends in sequence, it models the kind of situational audit that precedes strategic decision-making. The use of NAICS classification to ground the analysis in a regulatory and statistical framework shows attention to industry context beyond anecdotal observation.
Structure breakdown
The paper opens with a product and customer overview, then moves outward to describe the broader competitive landscape. It narrows back inward to define specific target market segments, including a novel ecological non-owner segment. It then addresses industry classification and recent sales data before closing with a supplier, substitute, and SWOT-style environmental assessment. This funnel-and-return structure moves from product to market to environment and back.
Introduction to Chery Automotive and Its Product Range
The Chinese producer Chery Automotive manufactures a wide series of automobiles that must be positioned in the market based on product features and customer demand. In the first instance, Chery automobiles will appeal to all automobile owners as well as non-owners who are interested in purchasing a car. As such, the Chinese cars will be addressed to buyers across all income levels, including those who desire a luxurious vehicle as well as those seeking a compact hybrid.
Overview of the American Automobile Market
The American automobile market is a dynamic one in which new technologies are developed continuously and new features are constantly incorporated into vehicles. The major players in the American automobile market are General Motors, Ford, and Daimler-Chrysler. They sit at the heart of the American economy and industry and influence the population across numerous areas:
A less favorable characteristic of the American automobile industry is that major domestic manufacturers such as Ford and General Motors are generally focused on producing large and luxurious vehicles that consume large amounts of fuel and are relatively expensive to maintain. Meanwhile, American consumers are demanding increasingly fuel-efficient cars. This opens the door for foreign manufacturers focused on producing compact, lower-consumption vehicles. On the American market, however, Japanese manufacturers currently hold supremacy in this category. Therefore, Chery Automotive may encounter serious competition from long-established Japanese carmakers such as Toyota, Nissan, and Honda.
In order to overcome this competition and ensure the success of its operations in the United States, automobiles manufactured by Chery Automotive will have to meet several consumer demands and expectations:
Target Market Identification
Based on product characteristics, two primary target markets can be identified. The first target market consists of individuals with above-average incomes, for whom a car represents more than a means of transportation. For this segment, Chery will position vehicles in the luxury category, such as the Eastar model.
Compact and fuel-efficient vehicles will be directed toward a second target market, which can be further divided into two sub-segments. The primary sub-target market consists of individuals with medium and below-medium incomes who wish to purchase a compact car for financial reasons. The second sub-target market consists of individuals with both medium and above-average incomes who are concerned with preserving the environment and will therefore seek out fuel-efficient vehicles.
A new and largely uncharted target market can also be identified: individuals who do not currently own a car and have never owned one, due to ecological convictions. Chery Automotive can address this group by communicating the environmental benefits of its compact and fuel-efficient hybrid vehicles.
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