In recent weeks, a significant buzz has emerged around Chery Automobile's plans to launch an initial public offering (IPO) in Hong Kong, with aspirations to raise around $1 billion and achieve a valuation nearing 100 billion yuanThe company recently witnessed a noteworthy shift in its shareholder structure, as one of its primary investors, Qingdao Xinchengshun, significantly reduced its stake from 12.11% to just 3.34%. This sharp reduction has paved the way for four new players, including Wuhu Kingsman and Qingdao Chengtou International, who have transitioned from indirect investors to major direct shareholdersThis calculated move signifies a strategic play to facilitate Chery's pathway to a public listing.

Amid the decelerating growth rates in the electric vehicle market, Chery’s decision to initiate its IPO reflects not merely a need for capital but an urgent strategy to seize competitive ground in technological innovation and global expansion

Advertisements

The company aims to solidify its position in a fiercely competitive landscape, especially as rivals like BYD and Geely have already established substantial advantages.

The potential success of Chery's IPO depends on how effectively it can position itself within the realms of electric vehicles and global outreachAs its competitors have set formidable benchmarks, Chery's strategic choices will be crucial in defining its future within the automotive landscape.

Reflecting on Chery's tumultuous path toward IPO, one cannot overlook the years of struggle characterized by setbacks and resilienceFrom its initial attempts to go public in 2004 to its current IPO aspirations, the journey has indeed been anything but straightforwardOver the last two decades, Chery has seen its share of promising prospects dashed by various external and internal challenges, continuously reminding observers of the rocky nature of its commercial saga.

The company's first endeavor to list on the stock market can be traced back to 2004. At that time, Chery aimed to enter the capital markets through a backdoor listing; however, this plan was thwarted due to equity disputes with SAIC Motor Corporation

Advertisements

In the years that followed, Chery faced a daunting funding gap of approximately 30 billion yuan and made several attempts to initiate an IPO, only to be sidetracked by fluctuating market conditions.

The 2008 financial crisis posed arguably the most severe setbacks for Chery, resulting in another failed attempt at going publicWhile the entry of strategic investors in 2009 was seen as a precursor to an IPO, issues related to related-party transactions ultimately derailed those plansEven a hopeful proposal for a backdoor listing in the realm of electric vehicles in 2016 succumbed to regulatory hindrances.

Despite the disheartening failures, Chery's unwavering resilience stands outThrough product innovation and strategic reassessments, the company navigated through turbulent waters and reached a significant turning point in 2022 when it attracted investment from Luxshare Precision, a major player in Apple’s supply chain, substantially enhancing its resource base and financial capabilities.

From 960,000 units sold in 2021 to a projected 2.6 million in 2024, Chery has demonstrated phenomenal growth, driven in large part by its strategic advancements in the arenas of electric mobility and smart technology

Advertisements

Distinguishing itself in international markets, it has maintained a leading position as China's top exporter of passenger vehicles for 22 consecutive years, poised to export a significant 1.14 million vehicles in 2024—a remarkable 21.4% increase from the previous yearChery’s financial performance also reflected this momentum, with revenues soaring to 480 billion yuan in 2024, signifying over a 50% increase year-on-year—a solid foundation for renewed IPO aspirations.

Walking through Chery's protracted journey to public listing is a somber reminder of the ebbs and flows that can define a substantial corporate historyThe wait of 20 years has not only allowed a fledgling enterprise to mature but has simultaneously crafted a narrative where a titan must grapple with both its past affluence and contemporary challenges.

Chery's transformation from a low-cost car manufacturer to a tech-driven automobile enterprise illustrates an ambitious pivot in its business ideology

• Promoting Safe and Orderly Development of Nuclear Energy
• Nvidia Loses $240B in Market Value Overnight
• U.S. JOLTS Job Openings Exceed Expectations
• Elevating the Full Chain of China's Automotive Industry
• Anthropic Seeks $2B at $60B Valuation

Central to this evolution is Chery’s relentless commitment to technological innovation, marked by over 27,000 patents filed, placing it among the world's most patent-rich automotive manufacturersThese technical competencies have helped establish formidable barriers against competitors in the burgeoning electric and smart vehicle sectors.

Perhaps the two decades of patience have not merely lent Chery an opportunity for a public listing but have also set the stage for redefining the competitive dynamic among Chinese automakers.

The saying “Thirty years east of the river, thirty years west of the river; don’t bully the youth for being poor” resonates strongly with Chery's storyFrom embarking on its journey in Wuhu in 1997 to projecting over 2.6 million units in sales by 2024, Chery has traversed an arduous pathThe question remains: can it leapfrog to new heights and restore the former glory of independent brands?

Central to Chery’s narrative is the indomitable spirit of Yin Tongyue

Born in Chaohu, Anhui, this “farm boy” ventured into the auto industry after graduating from Hefei University of Technology in 1984, quickly rising through the ranks of FAW VolkswagenHowever, by 1995, at just 33 years of age, he chose a more challenging path—returning to Wuhu to embark on the journey of creating a car brand that belongs to the Chinese people.

At that pivotal time, Chery had virtually nothing to its name: scant funding, little experience, and even factory space that had to be adapted from an abandoned brick factoryHowever, through tireless efforts over 500 days and nights of struggle, Chery ignited its first independently developed engine in 1999, marking a significant technical victory and debunking the myth that Chinese manufacturers could never produce their own vehicles.

Yin's philosophy—“If we can’t succeed, we’ll jump into the Yangtze River!” became a hallmark of Chery’s audacious spirit

By 2001, Chery launched its first self-developed car, the “Fengyun,” which not only captured significant market share but also marked the inaugural leap for the Chery brandIn 2003, the QQ model took the market by storm, altering the landscape of the domestic microcar segment with its appealing price point and design.

Chery's ascent was not purely coincidentalThe brand’s core technical foundations—spanning engines, gear systems, and chassis development—boast an indelible mark of “Made in China.” This foundation enabled Chery to dominate the domestic sales charts among independent brands for several years, writing a compelling chapter in the annals of Chinese automotive history.

However, lurking behind the notable successes were underlying concernsDespite impressive technical achievements and sales records, Chery’s failure to leverage these into capital market triumphs remains a blemish in its growth narrative

Through shifts in strategy and organizational constraints, Chery has missed opportunities as rivals like Geely, BYD, and Great Wall leveraged public markets effectively to fuel their ascension.

In its early attempts to pursue public listing through backdoor arrangements, market instability and management complications halted progressEven as the electric vehicle sector surged in 2016, a similar endeavor faltered due to qualification issuesThese missed occasions gradually dimmed Chery’s competitive edge within the capital market arena.

Now, as Chery finds itself standing on the precipice of a historic moment once more, its forecast of 2.6 million sales in 2024, paired with revenues of 480 billion yuan—the latter soaring over 50% year-on-year—represents a rejuvenated narrative filled with renewed hope for an IPOParticularly compelling is Chery’s unprecedented export volume, consistently leading as China’s top passenger car exporter for over two decades

As Chery builds momentum toward a new IPO, the capital markets are beginning to pull back their curtains.

Yin, once a trailblazer of independent brands, now faces a different realityChery has seemingly passed the moment of youthful acclaim, morphing into a “middle-aged trailblazer” attempting to reestablish itself in a rigid industry framework.

As Chery tackles a bet on its future with its impending IPO, it finds itself amidst substantial shifts in the competitive automotive landscapeFrom launching the “Yaoguang 2025” strategy to welcoming Huawei into its ecosystem, Chery embraces a transformative approachYet, after a protracted 20-year journey of trying to enter public markets, will this venture culminate in an enviable success story or remain shrouded in uncertainty?

Chery’s global strategy acts as a pillar of confidence in its endeavors

By initiating overseas operations back in 2001, it has carved a niche that signals strength compared to competitors like BYD, which primarily targets the domestic sceneThis international outreach not only fortifies Chery's revenue streams but also enriches its narrative within capital marketsThe ability to stake a claim in international domains positions Chery with a more robust risk management profile amid escalating domestic competition.

Initially focused on low-end microelectric vehicles, Chery missed pivotal opportunities to rival competitors like BYD and NIOHowever, as the landscape for electric vehicles evolved into a lucrative sector, Chery strategically recalibrated its focus towards high-end technological advancements, redefining both its technical and market approaches.

Collaborating closely with Huawei has injected vigor into Chery’s technological pursuits

The Chery Zhijie R7 model significantly enhanced its position in the pure electric SUV segment, with alone monthly sales crossing 15,000 units in December 2024. Yet, this reliance on a tech partner also introduces elements of risk—Chery's ability to sustain a distinctive brand identity while avoiding the pitfall of being perceived as excessively tethered to another brand poses a crucial challenge.

Industry analyst Wu Xiaobo has assessed major trends shaping China's automotive market in 2025—BYD for manufacturing, Huawei for intelligence, and Xiaomi for marketingThese shifts not only illuminate rising competition but also pose formidable pressures on traditional car manufacturers striving to adapt.

Amidst BYD’s overwhelming presence stemming from scale and supply chain prowess, Huawei’s technological conglomeration, and Xiaomi’s adept marketing, how will Chery carve its niche in this evolving tapestry?

The answer could reside within its dual-strategy approach

On one hand, collaborating with technological giants like Huawei allows Chery to leapfrog its competition in smart innovationConversely, its established global presence permits it to carve out a relative leniency for sustained developmentShould Chery successfully balance internationalization efforts with high-tech advancement while consistently innovating across its product lines, it may well secure an advantageous position moving forward.

Chery understands that unlocking the gates to the capital market demands exceptional endeavorIts past experiences—a trail of stalled IPO plans—now converge into a tightly-knit strategy with “Yaoguang 2025.” However, it’s essential for capital markets to focus on long-term growth trajectories rather than mere transient sales figures.

The fabric of Chery's narrative hinges on its capacity to interlace its fiscal narratives with sustainable future growth