*This content was translated by AI.
On the 2nd, KG Mobility (hereinafter 'KGM') and China's Chery Automobile held a strategic investment signing ceremony at the Seoul Namsan Hyatt Hotel. The core of the agreement involves KGM promising technology transfers including platforms and various architectures, while Chery Automobile will invest $7,500 million (approximately 108.4 billion won via Hanwha) through convertible bonds.
KGM has repeatedly incorporated Chinese technologies from companies like BYD and Chery Automobile into its own models. In particular, the SE-10 (the successor to Rexton), scheduled for launch in early 2027, will be the model where technology cooperation between KGM and Chery Automobile is most clearly reflected. The main highlight of this investment agreement ceremony lies not so much in the details of KGM's technology transfer, but rather why Chery Automobile decided to invest in KGM .
During the press conference, many reporters focused their intensive questions on this point. As the recipient of investment, even if Chery Automobile converts 108.4 billion won worth of convertible bonds into equity, it would amount to only around 10% of total shares. In other words, Chery Automobile's investment in KGM is not an attempt to seize management control. This serves as an official denial of suspicions that Chery Automobile might be seeking management control through its equity investment in KGM.
In response to questions about what Chery Automobile aims to gain from this equity investment, various answers were provided. First, Chery Automobile stated, "Scale is important. The larger the scale, the more costs can be reduced. KGM possesses significant know-how in the off-road vehicle sector. Joint development in this area could lead to cost savings. Furthermore, when entering global markets, we can collaborate on tariff-related matters." This emphasizes joint efforts in cost reduction and market expansion through cooperation in tariff sectors.
Questions also followed regarding Chery Automobile's potential entry into the domestic Korean market. Previously, it was reported that Chery Automobile is preparing to enter the Korean market in the second half of the year with two electric SUVs: 'C5 EV' and 'E5', under its brands 'Omoda' and 'Jaecoo'. Through its network within the Korean automotive industry, Chery Automobile has already begun hiring personnel for establishing a local subsidiary. These sub-brands are targeted at markets in Europe and Southeast Asia by Chery Automobile.
Our publication asked during this press conference, "Is KGM's investment ultimately aimed at entering the Korean market?" Chery Automobile neither denied nor affirmed this. A representative from Chery Automobile Jang Gwi-bing (President) stated, "In the automotive sector, differentiation based on consumer preferences is becoming increasingly important. Chery Automobile is closely observing how Korean consumers' preferences are shaping, specifically regarding vehicle types and consumer groups. We anticipate that a culture valuing individuality will grow in this process. Currently, there is no confirmed plan for entering the Korean market," while cautioning against overinterpretation.
Questions also continued regarding Chery Automobile's entry into the United States. It has long been known that Chery Automobile has strong intentions to enter the U.S. market. When AutoCast reporter Lee Da-il asked, "Could cooperation with KGM, including equity investment, accelerate the timing of entering the U.S. market?" Chery Automobile did not directly deny it.
A representative from Chery Automobile Jang Gwi-bing (President) explained, "The United States is a large market and we are highly interested as a company. The U.S. has its own regulations, and complying with these is important. Chery Automobile is seriously considering this. While there are no concrete plans yet, we will share more details on this matter in the future."
During this agreement ceremony, Chery Automobile maintained an ambiguous stance, neither affirming nor denying matters beyond investment discussions with KGM. Regarding issues such as entering the Korean market and using KGM as a foothold for indirect entry into overseas markets like the U.S., they stated only that these are "under review but not yet confirmed." However, with BYD already established in the domestic market, ZEEKR present, and companies like Xpeng Korea, Xiaomi, and Chery Automobile announcing their imminent arrival within the year, it is undeniable that Chinese automobile brands are now actively beginning their entry into the Korean market.
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*This content was translated by AI.
