Source | Yuan Auto

"The brand-new QQ3 has maintained monthly sales exceeding 10,000 units for four consecutive months, solidifying its status as a star product in the A0 segment."

In a recently released official sales performance announcement for July, Chery Automobile specifically highlighted the achievements of the QQ3. This pure electric compact car has been a standout performer in its segment since its launch on March 30 this year, significantly contributing to Chery New Energy's consecutive four-month sales milestone of over 100,000 units.

However, Chery appears to believe that the QQ3's sales figures are not yet satisfactory.

According to Chery Automobile's official website, the sales incentives for the QQ3 were further bolstered in August. In addition to retaining the seven original benefits, worth up to 26,000 yuan, from the initial launch period, the company introduced four new incentives, including discounted optional exterior colors and a complimentary lifetime basic maintenance package.

Notably, the benefits of discounted optional exterior colors and the complimentary lifetime basic maintenance package are exclusively available for purchases made between August 1 and August 19, with official prices set at 1,500 yuan (after discount) and 3,999 yuan, respectively.

For a model priced between 58,900 yuan and 78,900 yuan, the addition of purchase incentives worth several thousand yuan is substantial. For instance, the lifetime basic maintenance package alone could provide a significant competitive edge for the Chery QQ3. Chery's ongoing efforts to boost conversions, despite the QQ3's consistently strong sales, indicate a desire to surpass the monthly sales target of 10,000 units.

01 Aiming to Outsell the Dolphin, Priced 40,000 Yuan Higher?

Chery's decision to enhance sales incentives amid the QQ3's positive sales trend could also be seen as a response to fluctuations in its existing order backlog, necessitating the acceleration of new order conversions. However, based on official order data released by the automaker, this interpretation currently lacks concrete evidence.

According to an order data post by @Chery Automobile's official Weibo account on March 30, Chery received 56,879 orders for the QQ3 on its launch night. Additionally, based on wholesale sales data from the China Association of Automobile Manufacturers (CAAM) and the China Passenger Car Association (CPCA), the Chery QQ3 sold a cumulative total of 37,314 units from March to June this year.

In other words, assuming 10,000 units were sold in wholesale in July, Chery still has nearly 10,000 QQ3 orders pending delivery, not to mention new orders received since March 30. At this stage, the Chery QQ3 is likely still experiencing a supply shortage relative to demand. This aligns with social media discussions, where searches for "Chery QQ3" across various platforms reveal numerous comments from netizens claiming extended waiting periods for their vehicles and sharing their order details.

So, just how much does the Chery QQ3, which doesn't seem to lack buyers, aim to sell? Perhaps the BYD Dolphin, another popular model in the same segment, serves as a key benchmark.

As pure electric compact cars from Chinese brands, the BYD Dolphin and Chery QQ3 are closely matched competitors in various aspects. In terms of size, the Chery QQ3 is slightly larger than the BYD Dolphin; in terms of performance, both models' main variants offer a pure electric range of 420 kilometers (under CLTC conditions), but the BYD Dolphin has slightly higher power output than the Chery QQ3; in terms of configuration, the Chery QQ3 boasts a higher "tech appeal," with features like independent rear suspension and rear-wheel drive that the BYD Dolphin lacks.

However, despite their comparable product strengths, these two competitors have significantly different pricing strategies. The Chery QQ3 starts at 59,800 yuan, while the BYD Dolphin starts at 99,800 yuan. Even when comparing models with the same 420-kilometer range, the BYD Dolphin remains approximately 30,000 yuan more expensive than the Chery QQ3 (420 variant).

More notably, although the BYD Dolphin is priced higher, it also sells in larger volumes. Referring again to wholesale sales data from CAAM and CPCA, the BYD Dolphin's average monthly sales from March to June this year exceeded 20,000 units. While this figure includes a significant portion of export sales, even when considering only domestic retail sales, its sales volume still surpasses that of the Chery QQ3 by a considerable margin.

Given its comparable product strength but significantly lower price, the Chery QQ3 needs to focus on scaling up its sales volume to match the BYD Dolphin's profitability. The QQ3's current average monthly sales of over 10,000 units can only be considered a good starting point. From this perspective, Chery's unconventional approach with the QQ3 becomes understandable.

02 Avoiding the Mercedes-Benz smart Example

In addition to considerations regarding the profitability of individual models, Chery's decision to enhance sales incentives for the QQ3 and capitalize on its success may also stem from factors at the QQ brand level. After all, according to Yin Tongyue, Chairman of Chery Automobile, the QQ brand's return aims to establish it as a globally renowned IP akin to the Volkswagen Beetle, BMW MINI, and Mercedes-Benz smart.

Under this objective, the Chery QQ3, as the first model in the QQ brand's return, ideally should replicate the nationwide phenomenon achieved by the original Chery QQ in 2003.

With Chery reviving the QQ brand and establishing it as an independent business division with decision-making power over R&D, production, marketing, and sales channels, Zhang Hongyu, Vice President of Chery and Head of the QQ Business Division, revealed in a media interview this year that the QQ brand plans to introduce larger and more personalized models following the QQ3. Coupled with the currently available two-door, two-seat pure electric compact car, the QQ Ice Cream, it is expected that Chery QQ will soon form a diversified product matrix comparable to those of BMW MINI and Mercedes-Benz smart.

However, while enriching its product lineup, Chery QQ should always keep in mind its positioning as a premium compact car and avoid blindly enlarging its vehicles for the sake of sales.

Take smart as an example. This brand, which started with two-door, two-seat compact cars, introduced a sedan this year that is just 10 centimeters short of the 5-meter mark in length. Prior to that, it had already launched a mid-size SUV with a length of 4.7 meters in 2024. These "grown-up" smart models have been controversial since their launch. In terms of market performance, they have not achieved significant success in China to date, with monthly sales consistently in the triple digits.

The poor domestic sales of smart's larger models can be partly attributed to conflicts with Geely's competing models that share similar vehicle technologies. This is evident from the inverted sales performance of these "big smart" models in markets outside mainland China. Within Chery, if the QQ brand also enlarges its vehicles, it will face internal competition no less fierce than that between smart and Geely.

Although confining product offerings to the compact car segment may seem self-limiting, the current possibilities in China's compact car market exceed market expectations. For instance, the Geely Starry Wish is the best-selling model among all vehicle types in China, including fuel-powered vehicles, in terms of sales volume. Another example is the NIO Firefly, which starts at 119,800 yuan and has no trouble selling, earning it the title of the "anti-involution pioneer" in the domestic auto market.

Whether developing towards larger sales volumes or higher unit prices, the domestic compact car market offers rich imaginative space. If the QQ brand can fully penetrate this niche market, it will become Chery's most surprising new growth engine.

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