Summary of Key Points
Against the backdrop of a new energy vehicle penetration rate exceeding 65% and the fuel vehicle market share dropping below 35% for the first time, Chery has released another new fuel vehicle model (the 2027 Aireze 8 PRO) within two months, targeting the mid-to-high-end fuel sedan market priced between 100,000 and 150,000 yuan. The rationale behind this move is that fuel vehicles remain Chery's core source of profit, supporting its transition to electric mobility. However, its main fuel sedan model, the Aireze 8, has seen declining sales due to three major pressures: a shrinking market, the impact of new energy vehicles, and competition from peers. The new model aims to revitalize the market through performance and intelligent upgrades.
Why Is Chery Still Focusing on Fuel Vehicles When New Energy Vehicles Are Dominating the Market?
It's not that Chery is stubborn; rather, fuel vehicles are still essential as they serve as a critical source of profit for the company.
1. Still in Demand: There is still a market for compact fuel vehicles in the 100,000 to 150,000 yuan price range. July data shows that models like the Volkswagen Lavida and Nissan Altima still rank highly in their respective segments, indicating that consumers have not completely abandoned fuel vehicles.
2. High Profitability: In 2025, Chery's fuel vehicle business accounted for nearly 60% of its revenue, with a gross profit margin of 15% (significantly higher than its new energy division), meaning selling a fuel vehicle generates more profit than a new energy one.
3. Export Revenue: Chery has been the top exporter for 22 consecutive years, with fuel vehicles accounting for over 60% of its overseas sales, making them a vital source of revenue.
4. Transition Needs Financing: Investing in electric mobility requires substantial funding for research and development and factory construction, which can be funded by the profits from fuel vehicle sales, essentially using fuel vehicles to support the transition to new energy.
Why Has the Sales of the Aireze 8 Declined So Rapidly?
The Aireze 8 is Chery's best-selling sedan, with over 170,000 units sold globally in 2025. However, its domestic sales in July plummeted from 17,000 units in December 2025 to just 5,724 units. The main reasons include:
1. Shrinking Market: Sales in the 100,000 to 150,000 yuan segment declined by 27% year-over-year, meaning there is less market share available.
2. Competitive Pressure from New Energy Vehicles: Models like the BYD Qin PLUS and Shenlan L03 offer similar prices to fuel vehicles but are more affordable in terms of fuel and electricity costs (especially during high oil prices), attracting consumers.
3. Fierce Competition: Competitors such as Geely Starry and Volkswagen Lavida are continuously upgrading their features, such as adding intelligent systems and better engines, leaving Chery behind if it does not keep up.
How Will the New Aireze 8 PRO Turn Things Around?
Chery's new model aims to address the shortcomings of fuel vehicles by focusing on two key areas:
1. Performance: By leveraging technology from the CTCC (China Touring Car Championship), the new Aireze 8 promises better handling and power, giving consumers a "racing" experience even in a household car.
2. Intelligence: Equipped with the Qualcomm 8255 chip (commonly used in new energy vehicles) and the Falcon 500 intelligent driving system, the new model offers features like automatic parking and lane keeping, making it as sophisticated as new energy vehicles.
Is Chery's Move a Short-Term Solution or a Long-Term Strategy?
This move is actually a combination of both short-term profit preservation and long-term transformation support:
- Short Term: The goal is to boost the sales of the Aireze 8, stabilize its market share in the mid-to-high-end fuel sedan segment, and maintain current profits.
- Long Term: The profits from fuel vehicle sales will be reinvested in new energy initiatives (such as battery and motor research and development). Once the new energy business becomes profitable, Chery can gradually reduce its reliance on fuel vehicles. After all, transition to electric mobility is a gradual process that requires stabilizing its core operations first.
In summary, Chery is currently focusing on both fuel vehicle sales and transitioning to new energy technologies. Fuel vehicles are still crucial for its financial stability, serving as the foundation for its transformation. The launch of the new Aireze 8 PRO is an attempt to maximize profits in the current market window while buying more time for its new energy efforts.