Chery Reveals the Secret Behind the Low Prices of Chinese Cars

KatadataOTO – The price of Chinese cars in the country is relatively low compared to their Japanese rivals. This is not only the case in Indonesia, but it also happens in various parts of the world.

For example, the latest PHEV (Plug-in Hybrid Electric Vehicle) from Chery can be priced below IDR 500 million, while other PHEVs in Indonesia are sold for IDR 1 billion and above.

Then, various Chinese electric cars are offered starting from IDR 200 million. Meanwhile, a Japanese-made EV (Electric Vehicle) like the Toyota bZ4X is priced at IDR 1.1 billion.

According to PT CSI (Chery Sales Indonesia), as one of the manufacturers from the land of the bamboo curtain, there are several factors behind the low prices of Chinese cars, including in the country.

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“Chinese car manufacturers don't just produce cars for the Indonesian market, but for the global market. The volume is large all at once,” said Budi Darmawan, Sales Director of PT CSI in Jakarta recently.

He further explained that Chinese car sales in their home country are many times higher than the figures in Indonesia.

According to him, this high-volume production is what allows Chinese manufacturers to sell cars at a tendentially lower price.

“And it cannot be denied that they control the entire supply chain, from upstream to downstream, so that makes the price (of Chinese cars) cheap,” he said.

The cars produced in large quantities then have their specifications adjusted according to the regulations and consumer needs in the destination country.

He did not deny that a price war could eventually occur among Chinese car manufacturers in the country.

“But of course, at a certain point, it's impossible for a manufacturer to want to sell at a loss,” said Budi.

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This is what underlies Chery's strategy of gradually increasing prices, from the introductory price to the normal price.

For your information, one of Chery's newest models, the Tiggo 8 CSH, is sold for IDR 499 million as an introductory offer.

When it reaches 1,000 orders, the price will increase to IDR 509 million. Meanwhile, when it reaches 3,000, the normal price of IDR 519 million will be applied.