00:00Cherry entered the UK market last August. Last month, its brands accounted for around 8% of new car registrations.
00:07And it's now added a fifth brand to its UK portfolio, Lepest, designed specifically for European markets.
00:16Cherry's also investing heavily in AI and robotics.
00:20Its robotics division, AI Mogger, is reportedly preparing for an IPO.
00:25Incubated by Cherry in January 2025, AI Mogger says it's delivered more than 3,000 robots worldwide, including 2,000
00:35overseas, and now operates in more than 60 countries and regions.
00:40It's targeting 10,000 robot deliveries around the world by 2027.
00:46Let's talk to David Bailey, who's a professor of business economics at Birmingham Business School. Great to see you there.
00:51Now, look, Cherry's moved quickly in the UK. Is this R&D centre a sign it now sees the UK
00:57as a base of growth, rather than just simply a market to sell into?
01:02Yes, I think that's absolutely right. I think this is quite a strategic shift.
01:06So it's done very well in selling into the UK, probably the most rapid penetration of any car maker into
01:13the UK market in its history.
01:15But I think what they're doing is really thinking, well, OK, let's try and position the UK within our global
01:20innovation network.
01:21So instead of just selling cars into the UK, let's look to try and develop cars in the UK for
01:27the British and hopefully the European market as well.
01:30So it's also, it's about really kind of developing cars for the European market, I think.
01:34But why the UK, though? I mean, what does Cherry gain from testing vehicles here that it wouldn't get elsewhere
01:41in Europe?
01:42Well, I think the UK offers quite a favourable package.
01:44We've got excellent engineering talent. I mean, OK, we don't make as many cars as we used to, but the
01:49depth of the engineering talent pool is great.
01:52Some really good testing facilities, particularly at Millbrook.
01:56Very sophisticated consumers.
01:58And also the vagaries of British roads and weather offer quite a challenge for them in developing vehicles.
02:03So I think actually that all together is an attractive package for Cherry in coming to the UK to try
02:09and develop cars here.
02:10You know, and that's difficult to replicate, I think, in other countries.
02:14Now, Cherry's moving beyond autos into AI, into robotics.
02:17Is that a natural step for a company like them or is it a much bigger bet on the mobility
02:24industry and where that's heading?
02:26I think it's a combination. I think you're absolutely right.
02:28If you think about the modern electric car, it's often it's connected.
02:33It's semi-autonomous.
02:35AI is naturally increasingly part of the package.
02:38So increasingly, car firms are thinking about the car as an intelligent machine and they're thinking about broader mobility services.
02:47So I think that's the direction of travel that we're seeing.
02:49And I think it's inevitable that companies like Cherry think beyond just making cars to actually mobility solutions and broader
02:58robotics.
02:59We're seeing that also, for example, from the light of Tesla.
03:02But how seriously should we take those technology ambitions, those wider technology ambitions, though?
03:07You know, could AI and robotics become a meaningful part of the business rather than just part of an extension
03:12of the car making operation?
03:14I certainly take their ambition very, very seriously.
03:17And they're clearly putting considerable resources into that.
03:20But let's remember that that's not the same thing as actually being able to scale it up.
03:24So if we think about AI and robotics, that's a highly contested market.
03:29Many, many well-resourced companies in it.
03:31And the key test for Cherry will be whether they can actually come up with solutions that consumers want and
03:38also are able to scale it up.
03:40But I think what's sort of overall fascinating about this is Cherry, as a Chinese company,
03:45sort of really shifting away from just making cars into kind of broader intelligent mobility solutions.
03:51And that's the kind of transition, I think, that's taking place in the industry in China.
03:56David Bailey, thank you very much.
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