Chery looks beyond Europe and U.S. auto markets

Chinese auto maker Chery Automobile intends to boost its production output to hit one million vehicles per year by 2010, company sources say.

Starting this year, the decade old company based in Wuhan city expects to increase its production capacity by 200,000 to 700,000.

The homegrown auto manufacturer clinched the position of China's fourth largest producer of passenger cars in 2006, with sales of 305,200 automobiles, a 62% rise from the previous year. The company captured 7.2% of the local market share last year, up from 6.7% in 2005.

Just last week, Chery inked an agreement with U.S. Chrysler Group to sell Chery cars under the Chrysler Group brand in North America and Europe. Under the contract, Chrysler will choose four to six Chery models to be exported. According to Xinhua, sales in both foreign countries have been forecasted to hit 300,000 to 500,000 by 2019.

In a bid to tap into the European and U.S. markets, Chery also has plans in the pipeline to set up a joint venture with Quantum LLC, a U.S. subsidiary of the Israeli company, the Israel Group. Once the company is given the green light by the Chinese government, the RMB 5.8 billion project is expected to start production in 2009, churning out an average of two million vehicles per year.

Established in 1997, the first Chery automobile was only rolled off the assembly line in 1999. In 2001, Chery made its maiden trip overseas by exporting automobiles to Syria.