Then, the second sub-target market will be formed from those individuals who register both medium as well as above medium incomes, but care about preserving the environment; these individuals will purchase the fuel-efficient cars. A new and uncharted target market can be identified and it would consist of those individuals who do not currently own a car, nor did they ever, based on ecological reasons. In this order of ideas, Chery Automotive can address them by presenting the benefits upon the environment of the compact and fuel-efficient hybrids.

Given that the Chinese vehicles will be sold onto the American market, it is only natural to look at the automobile industry from a statistical perspective, such as the classification system implemented by NAICS. From this stand point, the Chinese cars will fall under the category 42311, detailed on 423110 - Automobile and Other Motor Vehicle Merchant Wholesalers. These regulations have been installed starting with 2002 (Official Website of the North American Industry Classification System, 2008).

All signs indicate a drawback of the American automobile industry, which materializes in the fact that more and more Americans choose to purchase foreign cars in the detriment of the American vehicles. This trend has been common in the North America of the past years and is expected to continue. Both years 2005 and 2006 ended with a substantial decrease in sales, compared to the previous year, respectively 2004 and 2005. The decrease was of 600,000 units in 2005 as compared to 2004 and of 650,000 units in 2006 as compared to 2005 (DesRosiers, 2007). Chery Automotives is not currently a part of the American car market as it has yet to enter this new territory.

The market of car components is highly similar to that of automobiles in the meaning that sales and revenues have decreased and they are also facing fierce competition...

Among the most relevant suppliers of auto components, one could name the AYD North America, Delphi or Smart Dealer Parts.
It is rather difficult to foresee a substitute product for cars given that no other item can satisfy the same needs. The consumers could for instance use airplanes, trains, buses or even bicycles to fulfil their transportation needs, but none will offer the same security and independence that automobiles do.

The American market and its general environment present the Chinese manufacturer with both incentives to entering the market, as well as possible threats. In this order of ideas, the opportunities of the external environment materialize in increased demand for compact hybrids which consume reduced amounts of fuel and which are better for both the environment and the buyer's financial status. This demand is also supported by increased concern over the well-being of the planet's natural resources. Yet another opportunity is offered by the fact that the America producers fail to deliver these items, leaving as such the door opened for foreign car manufacturers. There are threats which affect Chery Automotive: fierce competition from the Japanese car manufacturers and the revival possibility of the American car manufacturers who possess sufficient knowledge, technologies and resources to make a strong comeback and next to eliminate foreign producers.

References

Official Website of the North American Industry Classification System, 2008, http://www.naics.com, last accessed on February 15, 2008

DesRosiers, D., 2007, an Outlook for the North American Automotive Industry, http://www.cartest.ca/2007_outlook_for_the_north_a.htm, last accessed on February 15, 2008

America's Auto Industry, Weber Chevrolet, Retrieved at http://www.weberchevrolet.com/sale/american.pdfon Febrruary 15, 2008