Yin Tongyue:Chery & JAC never get closer

On October 31, 2009, Mr. Yin Tongyue, the Chairman and General Manager of Chery Automobile Co., received an interview by reporters from the Jinghua Times.

Chery has never held merger talks with JAC.

Jinhua Times: Chery has built plants in other places successfully. JAC has just established a joint venture of medium and heavy truck. Some reports said that those two automakers from Anhui Province were drifting apart from each other. What is your view about that issue?

Yin Tongyue: The rumors between Chery and JAC were not made by us. Although those rumors attracted a lot of attention, Chery and JAC are coming closer rather than drifting apart. Some leaders of Anhui Province have once hoped that Chery and JAC should reach a merger deal. However, both of us have never sit together to talk about that issue.

Chery has problems as to the production capacity.

Jinhua Times: Chinese auto market enjoyed an explosive growth in 2009. A large number of automakers have to face the problem of capacity shortages. What is Chery's estimate about the future development of market?

Yin Tongyue: In the second half of 2009, Chery met some capacity problems. And that is why Chery established another plant in Dalian, a decision aimed at expanding our production capacity. We are also digging out potentials of expanding capacity within our company.

In terms of the demand level, the auto market demand of 2010 will not become worse since the Chinese auto market is accelerating the pace to enter family life, which has become an irreversible trend. In the second-class and third-class markets, demand is quite strong.

On the basis of this year, the government should adopt some polices which are more reasonable in 2010. There should be at least 10% growth for Chinese auto market in 2010. The total sales of vehicles in 2010 will probably reach 14.5 million to 15 million.

Chery should ensure the dealerships of Kirin to gain profit.

Jinhua Times: The dealership network of Kirin is a new one. How can Chery ensure that the dealers will gain profit in the preliminary stage?

Yin Tongyue: On one hand we have taken effective control measures on the issue of investment spent in 4S shops. Our standard is not to found a high-rise building shop. Chery's concern is about setting higher requirements in terms of satisfaction and software. On the other hand, with the follow-up models continuing to enter, I believe the dealers' operational conditions will get better and better. Chery has been in co-operation with dealerships for so many years and been caring about the interests of dealers. That's why our cooperation is so solid. We have hardly heard some news that certain dealerships abandoned the business or had trouble with manufacturers. (Translator: Qinghua/Hanxin)

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