SHANGHAI, May 19 -- CHERY Automobile Co Ltd plans to create more than 20 Chery Towns in major cities within two years as part of a distribution strategy to focus more on after sales service.

The Chery Towns are mega dealers who will be selected from existing dealers and will provide sales, maintenance, trading as well as auto insurance and helping with car plate registration.

Chery, the nation's fourth-largest auto maker, is also considering launching an auto finance service through the Chery Towns, which need to have a minimum annual revenue of 480 million yuan (US$62.3 million), in a move to lure more price-conscious first-time buyers.

"The brand new distribution strategy can create a closer relationship between us, dealers and customers," said Yang Hongze, assistant president of Chery Automobile Sales Co Ltd. "The strategy is also due to our aggressive sales target and intense market competition."

Wuhu, Anhui Province-based Chery opened Lianhai Automobile Sales Co Ltd yesterday in Shanghai, the second Chery Town after one in Beijing.

Other locations in the Chery Town network also include Harbin in Heilongjiang Province in northeast China, Tianjin, Changsha, Nanjing, Suzhou and Urumqi in west China, all along major transport routes.

"In the near future, the majority of our sales will be contributed by Chery Towns, estimated at 300,000 to 500,000 units," Yang told Shanghai Daily.

Chery targets to sell 400,000 units this year after it sold 300,000 units last year, a 60 percent jump from a year ago.

The small car specialist launched a 1.3-liter A1 compact car yesterday in Shanghai, priced between 53,800 yuan and 59,800 yuan. The firm expects sales of 8,000 units this year.

Chery's revamped Tiggo 3 sport utility vehicle also hit the market with a minimum price of 95,800 yuan.