Chery to Eliminate Sub-brands, Cull Lineup

China's Chery Automobile Co. plans to drop three sub-brands and focus its efforts on a narrower lineup for the remaining Chery marque.

The company will ax the Rely MPV make. It intends to absorb some of its Riich premium car models into Chery and phase out the rest. The carmaker will spin off its Karry light commercial vehicle unit.

The moves will prune the company's Chery lineup to 11 or 12 nameplates from 20. The make also will replace its 16-year old red block-print Chery logo with a new abstract brushed chrome badge.

Chery introduced the sub-brands in 2009 as the Chinese government was pressing domestic carmakers to boost sales of their own brands. But adding a host of new models stretched the company too thin, resulting in shoddy quality. The company says the smaller lineup will enable it to boost its quality to global standards by 2020.

Sales of the new marques have been weak, and analysts say they mostly have been cannibalizing Chery brand volume. The company's sales grew 10% year over year to 90,700 vehicles in the first two months of 2013 only half the growth rate of the overall market.