Chery to create luxury car brand for China

Local Auto Giant Has Hired Former McKinsey Consultant Paul Gao

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Known for small cars, Chery wants to introduce a Chinese luxury car line
Known for small cars, Chery wants to introduce a Chinese luxury car line

SHANGHAI ( -- Chery Automobile Co. is trying to establish a new luxury car company for China.

Paul Gao, a former consultant for McKinsey & Company Inc. China, said Chery has hired him to lead a new joint venture with an undisclosed foreign investor.

A source close to Chery said the new company is Chery Quantum Auto Co., established in December 2007 with Israel Corp. The Tel Aviv-based industrial conglomerate holds a 45% share, with Chery owning the rest.

According to Mr. Gao, the new company's purpose will be to "follow in the footsteps of Toyota by creating a Lexus for China."

The name of the new luxury brand has not yet been decided. Its vehicles will be developed for export, he said, as well as sold onto the domestic Chinese market.

Mr. Gao would not give a date for the brand's launch. He said he was now in the process of recruiting its core engineering and management team. The new company's executives will be "very experienced experts," hired away from overseas divisions of global carmakers and not Chinese joint ventures, Mr. Gao added.

Chery's domestic sales fell 6% last year amid perceptions of inferior quality. The automaker has come under criticism for developing more projects -- vehicle models and business ventures -- than it can manage successfully.

Nonetheless, Mr. Gao says the greenfield venture for luxury vehicles will be in keeping with a new company philosophy of devoting more energy to fewer tasks.

"Chery's focus now is on doing a few things and doing them right, rather than trying to do too many things and not doing them well," he said.

This story was first published by Automotive News China, part of the Automotive News Group of Crain Communications Inc. Crain is also the parent company of the Ad Age Group.

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