Chery weighs bringing Omoda and Jaecoo to China to boost domestic sales, report says

• The 2 overseas brands would target China’s premium market, with marketing teams being assembled.
• Chery Group’s domestic sales fell 38.48% in the first 8 months of the year, while exports rose 68.16%.

Chery (HKEX: 9973) is reportedly considering bringing its overseas-focused Omoda and Jaecoo brands to China, seeking to build on its international momentum to revive domestic sales.

Marketing teams for the businesses are being assembled, and the brands are expected to target China’s premium market, local media Leiphone reported on Sunday, citing multiple independent sources.

Chery has approached professionals who previously worked for luxury brands including BMW, Mercedes-Benz and Audi, the report said. It did not disclose a launch timeline, model lineup or distribution plans.

The move under consideration reflects a widening divergence between Chery’s domestic and overseas businesses. Rising exports have lifted the group’s overall sales, while domestic volumes remain below year-earlier levels.

Chery Group sold 280,128 vehicles in August, up 15.4% year-on-year, according to data compiled by CnEVPost. Exports rose 52.14% to 196,984 vehicles, accounting for 70.32% of the total.

The group’s domestic sales totaled 83,144 vehicles in August, down 26.59% year-on-year, despite an 11.92% increase from July.

In the first 8 months of the year, Chery Group’s total sales rose 10.84% to 1,914,481 vehicles. Exports increased 68.16% to 1,343,334 vehicles, while domestic sales fell 38.48% to 571,147 vehicles.

Chery established Omoda as an independent brand in 2021 for young consumers worldwide and introduced Jaecoo in 2022 to target premium buyers overseas. The brands are commonly known together as O&J in international markets.

In April, the 2 brands announced that their combined cumulative global sales had surpassed 1 million vehicles.

Europe has been a key market for Chery’s overseas growth. The group previously said it sold more than 208,000 vehicles across 24 European countries from January through July, up 201% year-on-year.

Chery has also said the Jaecoo 7, Jaecoo 5 and Omoda 5 have each ranked among the UK’s 10 best-selling models this year, helping the brands build their overseas sales base.

Meanwhile, some of Chery’s existing brands remain under pressure. Hong Kong-listed automaker Chery Auto previously reported that Jetour and Exeed sales fell 10.64% and 37.79%, respectively, in the first 8 months of the year.

Exeed was recently placed under Chery’s international business, overseen by Zhang Guibing, Chery Auto’s executive vice president and general manager of its international business group, Leiphone said in Sunday’s report.

If the plan goes ahead, Omoda and Jaecoo would mark another attempt by Chery to expand in China’s premium market. How the brands would be differentiated from its existing offerings, divide their product portfolios and organize distribution remains unclear.

Overseas revenue accounted for 69% of Chery Auto’s H1 revenue, but lower foreign-exchange gains weighed on its financial performance.