SHANGHAI -- China's Chery Automobile wants to increase its share of overseas sales to a third of total sales, up from a quarter currently, but plans to do so organically and not through acquisitions, its CEO, Chen Anning, said.
Chery is open to forms of cooperation such as joint ventures but is not actively looking for mergers in its bid to crack markets such as Western Europe, Chen told Reuters in an interview on Wednesday.
"Today our rough ratio (for overseas-domestic sales) is one-quarter to three quarters and I'd like to increase that to one-third to two-thirds," he said declining to give a timeline.
"We're today not active in the merger and acquisitions market, in the big deals so to speak. We are open for cooperation as always, but fundamentally, we have consistently organically grown our markets by our own capability and sometimes with cooperation," he said.
"Down the road, if there's a feasible and valuable opportunity that exists, we may look into it, but that's not the fundamental motivation of us going to the international market, we've been doing this through dealers in over 16 to 18 markets," Chen said.
Chery's global ambitions come as local rival Great Wall Motor initially said it was interested in acquiring all or part of Fiat Chrysler Automobiles, owner of the Jeep and Ram vehicle brands. Great Wall later cooled talk of a deal. China's Geely bought Swedish automaker Volvo in 2010 and is reaping the gains of that deal, with Geely Holdings scoring its fastest earnings growth in eight years in the first half.
Chen said that Chery's aim was to enter "more stable, more important" markets such as Western Europe where he said customers were open to new brands and demand was high for clean energy products.
At next month's Frankfurt auto show, Chery plans to unveil vehicles from a new brand that will target European markets. The models will be more premium and priced higher than Chery's current product portfolio but will remain affordable and contain connectivity features, Chen said.
Chery sells electric and gasoline vehicles and also has joint ventures with Jaguar Land Rover and Kenon Holdings.
It currently has a global distribution network of over 1,100 outlets with showrooms in countries such as Turkey, Morocco, Brazil and Argentina. It also has 14 manufacturing bases abroad, including in Brazil, Iran and Venezuela.
Cautious on N.A.
Chen said that the company was cautious on North America, citing uncertain political and economic policy winds.
"I think we will have to wait a few years to see stabilization in the economic policies and political strategies. And we may decide to start in North America but today is too early and we're cautious."
Yale Zhang, head of Shanghai-based consultancy Automotive Foresight, said growing through organic means was less risky than acquisitions but slower and could make it harder for Chery to enter developed markets.
With respect to Chery's stance on mergers or acquisitions, "risk is possibly one consideration for them but they are a mid-sized state-owned enterprise, so I feel that they may not have sufficient funds," he said.