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January 27, 2016

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Is it too late? Qoros plans development of electric cars

Tian shi, di li and ren he – or the combination of the right time, the right place and the right people doing the right things – is an ancient Chinese philosophy that Qoros is trying to embrace as one of the newer players in China’s car market.

The eight-year-old company, a joint venture between Chinese carmaker Chery and Kenon Holdings from Israel, recently launched a new business unit focused on electric cars, after finishing another struggling year to gain a market foothold.

In 2015, Qoros deliveries rose 170 percent to about 14,000 units, a figure too small to provide economies of scale in a market of more than 24 million car sales.

Chen Anning, the company’s chairman who stepped in as acting CEO after Phil Murtaugh resigned earlier this month after less than a year in the job, said it’s high time for Qoros to ride the new trends and find its place in an historical transformation to clean-energy driving.

When the company was established, the Chinese auto market was still in its heyday and Qoros set out to carve its niche as a maker of high-quality, Chinese-branded vehicles. It was a gamble in a market where domestic brands have traditionally taken a back seat to foreign nameplates.

What appeared to be signs of a booming new energy car market opened up a new frontline of competition. Sun Xiaodong, vice president of Qoros for marketing and sales, predicted that every car model on the market will eventually have a new energy variant, though it may only account for 10 percent of sales considering the current limits of technologies and costs.

The new Qoros strategy is to maintain its conventional portfolio of a sedan, hatchback and two SUVs, while adding one new energy car, either fully electric or hybrid, by mid-2017. After 2020, a platform will be launched as the dedicated infrastructure for new energy car manufacturing.

Explaining the timing of that development, which again makes Qoros a relative Johnny-come-lately, the company said it takes into account government support and infrastructure, supplier readiness, consumer awareness and acceptance, and most importantly, the company’s own readiness.

“We don’t want to rush in before we feel very comfortable with the fundamentals,” said Dan Cohen, vice chairman of Qoros, who represents shareholders from Israel. “That has been the shareholders’ vision from day one and now it is the right time.”

The new energy car market promises a breakaway from the world’s traditional brand hierarchy, giving every player the opportunity to parlay new technologies to establish new identities.

But in this brave new world, Internet companies are now muscling their way into high-tech car manufacturing with their typical can-do spirit and marketing fanfare. Whatever new world order emerges, the top dogs will have to be as good at spin as they are at manufacturing expertise.


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