Chery says the cost of setting up yet another brand in Australia is worth it

Chery is launching its third brand in Australia this year with Lepas, but it says the cost of establishing this new marque is mitigated by its ability to utilise existing infrastructure.

Though it’ll be sold through a “totally independent sales network”, Lepas will be able to use the same back-end systems as other Chery Group brands in Australia, with some existing dealerships also being tapped as “service agents”.

“The viability of that brand is no longer reliant on the entire business working for that brand. Actually, that brand is reliant upon now just the front-end in that, can it attract customers? Can it sell and provide options to customers that they want?” explained Chery Motor Australia chief operating officer Lucas Harris.

“The back-end infrastructure, we already have it set up anyway, and whether or not we have this brand or not we still have to have that back-end infrastructure.

“So, I think our planning around trying to use the Group arrangement as a tool to fuel the ability to find extra customers, and it's not too much different.”

While Chery is unusual in having three brands and another three coming in 2027, Mr Harris likened the level of complexity to brands with large model lineups.

“There are some brands in the market which have 18 different models and then some models they have 15 different variants. That adds a huge amount of complexity.

“I've been looking at VFACTS lately for model variants on a certain ute category. And there are some variants which sell double digits, low double digits every month, but they still offer them.

“Why do they offer them? They have the infrastructure there to support it in the back-end, and maybe that’s 20 units a month that they wouldn't otherwise get. And so, what's the harm in adding it?

“Now, I'm not suggesting that having a whole brand is the same as having an additional variant. It is slightly more complicated, and yes, we have to employ more people, and we need separate teams, particularly for marketing. We need separate networks. But frankly, I think we can do it and make it viable.”

The company not only needs to spend money establishing a dealership network – set to number 50 locations by the end of 2027 – but also marketing an unknown name with a specific pronunciation (it's the first syllables of 'leopard' and 'passion' respectively) and shoring up resale values, all in a market with over 70 brands competing for market share.

Lepas hasn’t announced pricing for its models, but Mr Harris made clear it wasn’t going to be positioned as a 'premium' brand.

That will leave Lepas to occupy the same mainstream segments as sister brands Chery and Omoda Jaecoo. As an example, its upcoming L4 EV will overlap with the Chery E5, Jaecoo J5 EV, and potentially an electric version of the upcoming Omoda 4.

Though sometimes referred to as two separate brands, Omoda Jaecoo is a single brand albeit with two ranges of models within.

By the end of next year, the Chery Group will have six brands here: Chery, Omoda Jaecoo, Lepas, iCaur, Jetour and Freelander.

Lepas and Omoda Jaecoo are export-only brands, with many of their models sold under other brand names in China. For example, the Jaecoo J8 is sold in China as the Chery Tiggo 9, and the Omoda 9 as the Exeed EX6.

There are even more offered overseas. In China alone, Chery brands comprise the Exeed and Luxeed premium marques, the latter a collaboration with Huawei under the Harmony Intelligent Mobility Alliance; as well as Freelander, iCar and Jetour.

Chery also recently reactivated its Rely brand after it was shuttered in 2013 after just four years on the market.

It had been launched in 2009 in China alongside another brand, Riich, which befell the same fate in 2013 as part of a ‘One Chery’ brand strategy the automaker has subsequently abandoned in favour of a sprawling array of standalone marques.

It’s unclear if Chery would be willing to retire any of its latest crop of brands – the oldest of which is Exeed, established in 2017 – as it did with Rely and Riich.

“The automotive market just sprung up in the last, what, 30 years for China right? And it's super-fast. And again, this whole China speed that's happening. And this momentum that's happening with Chery in terms of all these brands,” explained Chery Group’s global design director, Steve Eum.

“Chery initially has gone through a lot of brands before and some of them of course survived and some haven’t.

“[Chery is] just a super-fluid organisation. So, whether we have 10 or 20 brands, it really doesn't matter. They'll juggle.”

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