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Invest 400 million euros! Chery sets up a new joint venture

2024-05-30 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)04/21 Report--

On April 19, local time, Chinese carmaker Chery and Spanish car company Ebro-EV Motors signed an agreement to set up a new joint venture in Barcelona, Spain, to jointly produce new electric vehicles with a total investment of 400 million euros.

At present, the Chinese Embassy in Spain and the people's Government of Wuhu City have all released the news that Chery and Ebro-EV Motors have reached an agreement, but as of press time, Chery has not officially announced this news.

It is understood that Chery is the second Chinese carmaker to set up a factory in Europe after BYD. Unlike BYD's way of building a factory from scratch in Hungary, Chery produces and distributes by acquiring an existing plant in Spain, a former Nissan plant that closed in 2021. At that time, Nissan closed the plant and at one point led to the loss of about 2500 workers. The factory, which is the Zona Franca factory in Barcelona, was acquired by EV Motors in March and will create 1250 jobs when the joint venture agreement is signed.

According to the agreement, the plant will start production this year and is expected to produce 50, 000 vehicles a year by 2027 and increase to 150000 by 2029. After it is put into production, the pure electric and fuel versions of Oumengda 5 will be the first models to be produced.

Omenda is a new product line of Chery, launched in July 2022, positioning the compact SUV, the current price range is 7.99-114900 yuan. As the first model of Chery 4.0 product evolution, O'Mengda also launched four-wheel drive version, hybrid version and pure electric version. It is worth mentioning that ou Mengda's sales in the domestic market are hardly ideal. Retail data show that Omengda sold 862 vehicles from January to March this year, of which 443, 226 and 193 were sold from January to March, respectively. However, in the international market, Omenda has been sold in more than 30 countries around the world. According to statistics, the cumulative wholesale volume of OMengda in the first half of 2023 exceeded 60,000 vehicles, of which nearly 90% was contributed by overseas markets.

In addition to the Oomengda model, the joint venture will also produce the plug-in hybrid model Jaecoo 7 (the domestic equivalent of the "Discovery 06" model) and restart the established Spanish car brand Ebro, which has been discontinued since 1987, using the technology and production platform shared with Chery.

Data show that Ebro-EV Motors is a Spanish car company, founded in 1954, early production of agricultural vehicles and machinery, then acquired by Nissan in 1987, and began to transition to electric in 2015; Ebro pure electric pickup truck was released at the end of 2022.

At present, China has become the first exporter of passenger cars, at the same time, more and more Chinese car companies are planning to build factories overseas. It is understood that the overseas factories of Chinese car companies are mainly concentrated in Southeast Asia, Central Asia, Latin America, Africa and other regions, and the overall number of factories has reached dozens. Among them, Chery is the Chinese auto company with the largest number of overseas factories, with KD plants in Malaysia, Mexico, Brazil, Argentina, Venezuela, Russia, Iran and Egypt.

According to the data, the cumulative sales of Chery Group in 2023 was 1.8813 million vehicles, an increase of 52.6 percent over the same period last year, of which the cumulative export sales for the whole year was 937100 vehicles, an increase of 101.1 percent over the same period last year. For comparison, the overseas markets of Great Wall and Geely were 316000 and 274100 respectively in 2023, up 82.48 per cent and 38 per cent respectively from a year earlier.

The latest data show that from January to March in 2024, Chery Group sold a total of 529604 vehicles, an increase of 60.3% over the same period last year, of which 253418 cars were exported, an increase of 40.9% over the same period last year, accounting for 47.85% of the total sales. It is not difficult to find out from the data that overseas markets are important to Chery. Chery has become China's third largest carmaker and largest passenger car exporter.

As for why Chery chose to set up a joint venture in Spain to build cars, or related to local car development. Spain is the second largest car producer in Europe after Germany, producing nearly 2.5 million vehicles in 2023 and is expected to reach about 2.3 million in 2024, the Financial Associated Press reported.

At present, Chery is still expanding its overseas scale. According to media reports, the head of Chery's UK region said that the company plans to enter the British market this year and build a plant there by 2030. At that time, it will compete with South Korean carmaker Hyundai Kia Group for market share.

With regard to the future sales performance of overseas markets, Citic Securities expects that overseas sales of Chinese car companies may reach 3 million in 2025 and 5.5 million in 2030, with independent brands and new forces accounting for 25% and 40% of overseas sales in 2030.

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