Shanghai Auto Show 2019 Interview: The reasons behind Jetour’s formidable initial success

Jetour X90 at the Shanghai Auto Show

If you are a regular BSCB reader, the initial success of Chery’s new brand Jetour over the past few months is no secret to you. But if you’re just discovering our site, chances are Jetour doesn’t ring any bell at all as its Chinese success has gone mostly under the radar. All the more reason to start following us! It’s our job at BSCB to study brands and models as they become successful so an interview with the Jetour team was an imperative for me at the Shanghai Auto Show. Thanks to Ray Bierzynski, Executive Vice President at Chery Automobile, I was able to set up an interview with Mr. Li Xuey, Jetour’s General Manager, making BSCB the only foreign media to interview Jetour at the Shanghai Auto Show. But first let’s unpack Jetour’s success in a few figures.

BSCB was the only non-Chinese media to interview Jetour at the Shanghai Auto Show 2019.

With only the X70 SUV, Jetour has achieved 50.067 sales in its first 5 months in market and 69.095 in its first 7 months – all very close to a fantastic 10.000 units per month average – making it not only the most popular new brand launch in China over the past 12 months (above Bestune 25.530, Dorcen 12.612 and Nio 11.914) but also the most successful new brand launch in China in the past decade. Yessir, although that’s for the 5-month figure, Jetour losing this title to WEY over its first 7 months. In the 5-month score detail, below Jetour (50.067) we find WEY (44.618), Lynk & Co (33.783), SWM (32.011), Cowin (31.469) and Jeep (31.229). Over its first 7 months Jetour (69.095) places 2^nd over the past decade below WEY (86.427) but above Lynk & Co (52.264), Jeep (49.334), Cowin (44.351), SWM (40.895) and Baojun (38.877).

Jetour is the most successful new brand launch in China in the past decade, based on first 5 months wholesales and retail sales.

Two significant caveats to this formidable start is that firstly, it is by no means a gage of long-term success as we have seen WEY already diving (November -44%, December -45% and January -50%) a mere 1.5 year after its launch. Secondly, wholesales tend to be inflated by demo volumes at the start of every nameplate’s career, instead retail sales are a better reading tool to determine the potential longer-term success of the brand. And Jetour passes the retail test with flying colours, recording 35.285 deliveries at the 5-month mark, once again #1 this decade above WEY (33.374) and Lynk & Co (25.116), however slipping below WEY at the 6-month mark at 41.259 vs. 48.446 while Lynk & Co remains at a distance at 33.175. Now that we are up-to-date regarding Jetour’s initial success, let’s talk to the brand’s General Manager to try and uncover the secrets behind these scores.

Jetour X70 in its camping setting at the Shanghai Auto Show

BSCB: First I’d like to backtrack a couple of years to 2017 when the Jetour brand was created. Then, the Chery Holding Group already had in its stable of brands Chery, Qoros, Exeed, Cowin and Karry. Why create yet another one?

Mr. Li Xuey (Jetour): What triggered the creation of the Jetour brand is firstly our observation that in the Chinese market there was growing interest and demand for automotive tourism. (BSCB note: This is still a nascent concept in China as illustrated by the rarity of car rentals). Families that need a large, robust and sophisticated vehicle to go on road trips and discover the country. The name Jetour itself is derived from the word “Tourism” or “Touring” the country. Secondly, in the Chery Group there are a lot of different subsidiaries and one of them is a network of camping sites, so we were able to create synergies between Chery’s own camping network and a brand that is focused on enabling our customers to explore and “tour” the country.

Jetour X95

BSCB: Your current range includes the X70, X70S and X90, plus the upcoming X95, all SUVs. Is the Jetour brand only going to sell SUVs?

Mr. Li Xuey: I believe that in future we won’t be categorising cars into segments such as SUVs or MPVs, but rather based on what usage we have for the car (BSCB note: arguably, usage is what the SUV – Sport Utility Vehicle and MPV – MultiPurpose Vehicle expressions already stand for). Given we aim at enabling families to travel and explore, at the moment we are focusing on SUVs and MPVs. (BSCB note: that means one or two MPVs could be on the cards next for Jetour).

Jetour merchendising

BSCB: Will the Jetour brand ultimately replace Cowin? (BSCB note: Cowin only sold 4.605 units over Q1 2019 vs. 29.086 for Jetour with a range almost exclusively composed of large SUVs potentially competing with Jetour models).

Mr. Li Xuey: As it happens, Jetour and Cowin are two independent brands. Their management, shareholders and operations are totally different. As you know the Chinese market is very large with an annual capacity of around 30 million units currently. There is room for many brands. Inside the Chery Group we have Qoros, Jaguar Land Rover (BSCB note: through a JV), Exeed, Tiggo (BSCB note: the Chery sub-brand dedicated to SUVs), Jetour and Cowin, each brand focusing on a different segment a little bit like Audi, Volkswagen and Skoda for the VW Group. And for us Cowin, focusing on economical cars, is equivalent to Jetta, the new brand launched by the VW Group in China.

Jetour X70 Coupe

BSCB: Which brands do you see Jetour competing with on the Chinese market?

Mr. Li Xuey: We have two main sets of competitors: the first one is the Chinese top-selling brands such as Geely, Haval, Changan and GAC, and the second one os the Korean and European brands with SUVs priced between 100,000 and 150,000 yuan. (BSCB note: that would include the very successful twins Hyundai ix35 priced from 119,900-161,900 yuan and Kia Sportage priced from 137.900-144,900). But again for us in the future the competition won’t be about price and/or size but about usage.

BSCB: Jetour sold 50,000 units in its first 5 months. According to our files, no other new brand has managed that feat in China, at least in the past decade. What’s your secret?

Mr. Li Xuey: In my opinion there are 3 main reasons behind this success. The most significant one is the product. We designed these cars 3 years ago and we wanted them large (all Jetour models are available in either 5- or 7-seat configurations), with intelligent features and a modern design. Secondly is our dealership network. In 2018 in 7 months we opened 321 new Jetour dealerships and in 2019 in just 3 months we opened 400 more. Off these 400, only 100 came from the Chery Group (mainly ex-Karry dealerships converting to Jetour) but the rest are new to our network, meaning they have abandoned the carmaker they were representing to come with us. Finally I believe the third element of this success is our single-minded strategy focusing on “Touring” families. We have fan clubs, owners clubs and we communicate a lot with our customers so we feel we have a pretty good understanding of them.

The Jetour X70 has been one of the surprise successes of the past few months.

BSCB: Where is Jetour most popular in China? In other words in which Tier cities (from 1 to 5)? 

Mr. Li Xuey: I think one of our strengths is how spread-out we are across different Tier cities. For example in Beijing and Shanghai (Tier 1) we have 4 dealerships each, in Guangzhou 3, in Lhasa 2, in Dali (Yunnan province) 2 and in Lijiang 1, the last two being relatively small cities, yet we are also very well represented there. So we feel we can compete in any market.

BSCB: What is your mid-term sales objective in China? 

Mr. Li Xuey: Our sales target for 2019 is 150.000 units, up to 300.000 units in 2020, and by 2022 we want to reach half a million annual sales in China. (BSCB note: that’s well above Chery’s 2018 annual wholesales of 422.787 and equivalent to what Mercedes – 503.108, BYD – 500.032 or Roewe – 470.805 are currently selling).

BSCB: Are you planning to launch the Jetour brand outside of China?

Mr. Li Xuey: We are already planning sales in Latin America and the Middle East and have received strong interest from dealer groups in South East Asia, so the Jetour brand will indeed be introduced to more countries in the near future.