"In 2003, when Haval made its debut, Great Wall Motors became the domestic double champion in terms of market share for both pickups and SUVs in China. That same year, Wang Chuanfu had just announced his intention to enter the automotive industry."

Twenty years later, Great Wall Motors' Haval H6 has lost significant market share to BYD Song, no longer leading the domestic SUV market. Combined with a relatively slow transition to new energy vehicles, Great Wall Motors' overall sales performance has suffered. Anxiety and frustration set in, and the company found itself at a crossroads once again in 2023.

In 2024, Wei Jianjun, one of the representatives of Chinese automakers, took matters into his own hands and embraced the internet with Great Wall Motors. He closely interacted with Lei Jun, learned from internet traffic strategies, and even embraced becoming an internet celebrity. He vowed not to give up on the Weiyi brand and aimed to regain domestic sales dominance.

By the end of August this year, Great Wall Motors released its first-half financial report: revenue reached 91.428 billion yuan, a year-on-year increase of 30.6%;

Automobile sales revenue amounted to 78.933 billion yuan, accounting for 86% of total revenue; net profit was 7.08 billion yuan, a year-on-year increase of 419.9%.

From a profit-making perspective alone, Great Wall Motors has indeed turned things around.

Of course, the problems are also straightforward – compared to limited victories in overseas markets, Great Wall Motors needs a comprehensive domestic win; beyond the valuable traffic brought by Wei Jianjun, the company desperately needs the next phenomenal Haval hit.

Adept at fighting external battles

In the first half of 2024, Great Wall Motors achieved over 4 times the growth in net profit attributable to shareholders and over 6 times the growth in core net profit, winning a significant battle to turn around its profits. Its profit performance has officially surpassed the trough period of 2023, returning to or even exceeding the same period in 2022.

On the one hand, this cannot be separated from Great Wall Motors' cost control. In the first half of 2024, the company's operating costs, sales expenses, administrative expenses, and research and development expenses were 72.46 billion yuan, 3.8 billion yuan, 2 billion yuan, and 4.185 billion yuan, respectively, with year-on-year changes of 24.5%, 16.9%, -3.45%, and 19.2%, all lower than the 30% growth rate of revenue, indicating a significant improvement in efficiency.

As a result, Great Wall Motors' gross profit margin recovered to 20.74%, a year-on-year increase of 3.89 percentage points and a 2.36 percentage point increase from 18.38% in the first half of 2022. In terms of average vehicle price, the average price of Great Wall Motors' vehicles in the first half of the year was 164,800 yuan, a year-on-year increase of 29,900 yuan, with a net profit per vehicle of 12,800 yuan, a year-on-year increase of 10,000 yuan. Compared to Geely and BYD, Great Wall Motors has a smaller scale but higher net profit per vehicle.

Great Wall Motors' net profit margin of 7.7% in the first half of the year also surpassed the industry average: According to the National Bureau of Statistics, the profit margin of China's automotive industry in the first half of 2024 was only 5.0%.

It can be said that throughout the first half of 2024, Great Wall Motors not only benefited from Wei Jianjun's frequent appearances to turn around the company's brand reputation but also saw a quiet improvement in operational efficiency. It is worth noting that in the same period of 2023, Great Wall Motors was under significant impact and scrutiny, with its net profit margin slipping to a meager 1.9%.

Apart from improved operational efficiency, Great Wall Motors attributed its profit growth to increased sales in overseas markets, according to its first-half financial report. In the first half of 2024, Great Wall Motors sold a total of 554,900 vehicles, including 201,500 overseas, a year-on-year increase of 62.6%: This means that for every ten Great Wall Motors vehicles sold in the past six months, nearly four were exported overseas.

Moreover, Great Wall Motors' overseas sales growth significantly outpaced the overall industry. According to the China Association of Automobile Manufacturers, China's automakers exported 2.339 million passenger vehicles in the first half of 2024, a year-on-year increase of 31.5%.

In fact, Great Wall Motors has been expanding overseas for quite some time. After proposing the "International New Four Modernizations" strategy, which emphasizes localized production capacity, localized operations, cross-cultural branding, and secure supply chains, Great Wall Motors now has over 1,300 overseas dealerships and has sold over 1.6 million vehicles overseas, essentially establishing a presence wherever there is a market. Currently, Great Wall Motors has 14 million users worldwide.

It is worth noting that the rapid growth of Great Wall Motors' overseas markets is also driven by geopolitical factors.

A telling example is that in 2023, due to well-known reasons, European and American automakers successively withdrew from the Russian market, leaving significant gaps that were filled by Chinese automakers. In 2023, Chinese automakers sold over 500,000 vehicles in Russia for the first time, with market share increasing to 49%.

Among them, Haval ranked third in Russian auto sales with 111,700 vehicles, a year-on-year increase of 2.3 times and a market share of 10.6%. This means that of the 314,000 total overseas sales of Great Wall Motors in 2023, nearly one-third were Haval vehicles sold in Russia.

Losing ground in new energy, is Great Wall Motors struggling domestically?

If we look solely at Great Wall Motors' overseas performance in its first-half financial report for 2024, it can be described as filled with surprises and even momentum.

The question is whether local victories in overseas markets can turn around Great Wall Motors' overall domestic market position.

In fact, out of the total 554,900 vehicles sold by Great Wall Motors in the first half of 2024, nearly 70% were sold domestically, excluding the 201,500 overseas sales. In the entire first half of 2024, Great Wall Motors sold 355,000 vehicles domestically, a year-on-year decrease of 10%.

According to the China Association of Automobile Manufacturers, China's automakers sold a total of 14.047 million vehicles in the first half of 2024, a year-on-year increase of 6.1%. This means that compared to the overall industry growth rate, Great Wall Motors' domestic performance in the first half of the year may be considered unsatisfactory.

Furthermore, Great Wall Motors' declining domestic sales have spread indiscriminately across all categories: For example, in the first half of the year, Great Wall Motors sold 66,400 pickups, 260,800 SUVs, and 27,700 sedans, with year-on-year declines of 18.24%, 5.77%, and 25.87%, respectively, indicating that all major categories have lost ground in the domestic market.

At last year's Chengdu Auto Show, Wei Feng, President of Great Wall Motors, stated that 2023 marked the beginning of Great Wall Motors' intelligent transformation, and 2024 would be a big year for the company's electrification and intelligence efforts.

However, reviewing the first-half financial report for 2024, the increment provided by Great Wall Motors' new energy vehicles is still insufficient to truly reverse the company's declining domestic market performance. In the first half of 2024, Great Wall Motors sold 129,800 new energy vehicles, a year-on-year increase of 44.89%, but accounting for only 23.39% of the company's overall sales. In contrast, the new energy penetration rate in the Chinese market reached 35.2% in the first half of 2024, indicating that Great Wall Motors still lags behind in terms of new energy content.

According to Great Wall Motors' latest production and sales data, the company sold a total of 156,500 new energy vehicles from January to July. In comparison, BYD, which has fully transitioned to new energy vehicles, sold nearly 2 million vehicles over the same period, while Geely sold 379,000 new energy vehicles, a year-on-year increase of 105%, and Chery sold 226,000 new energy vehicles, a year-on-year increase of 193.7%.

It can be said that as a first-tier automaker, Great Wall Motors' new energy vehicle sales have yet to achieve significant growth. Without significant growth in domestic sales, the gap between Great Wall Motors and its competitors may widen, relying solely on overseas market growth.

In fact, Great Wall Motors has seen year-on-year declines in total sales in July (-16.32%), June (-6.55%), and May (-9.51%), making it the only known private automaker to experience year-on-year declines in sales.

Currently, Great Wall Motors boasts multiple brands, including Haval, Tank, Great Wall Pickups, Weiying, and Ora, covering various segments from SUVs to sedans and various powertrains from gasoline to electric and hybrid. Great Wall Motors' product layout leaves little to be desired.

However, having many children doesn't necessarily make for better fights.

In the first half of this year, sales of Great Wall Motors' popular pickup trucks and sedans declined: In the first half of the year, Great Wall Motors sold 91,900 pickups, a year-on-year decrease of 10.4%, and 31,700 Ora vehicles, a year-on-year decrease of 32.87%. In July, only Tank sales increased year-on-year, while Haval, Ora, Weiying, and Great Wall Pickups all experienced declines, with Ora and Weiying seeing declines of over 50%.

Given these factors, in terms of sales, especially domestic sales performance, Great Wall Motors has yet to truly reverse its 2023 weakness.

In fact, in 2016, Great Wall Motors reached second place among Chinese automakers with sales of 1.0745 million vehicles, surpassing the combined sales of Geely and BYD. In the first half of 2024, Great Wall Motors ranked seventh among Chinese automakers in terms of sales, selling about half as many vehicles as Geely and less than one-third as many as BYD.

In 2021, Great Wall Motors unveiled its 2025 strategy. At that time, Wei Jianjun stated that by 2025, Great Wall Motors aimed to achieve global annual sales of 4 million vehicles, with 80% being new energy vehicles. Looking back, this remains a daunting task.

Can Great Wall Motors survive without Haval?

The 2024 interim report leaves Great Wall Motors with numerous challenges, ranging from balancing domestic and international sales to accelerating the transition to new energy vehicles.

Every cause has its effect. From a product perspective, Great Wall Motors' past approach to vehicle design often involved focusing on specific categories and scenarios, targeting niche markets, and striving to become the category leader to drive sales. For example, the off-road-focused Tank and the cost-effective Haval, both of which achieved significant success within a certain timeframe.

Subsequently, Great Wall Motors began replicating these successful product design concepts, aiming to mass-produce and replicate these successes. However, this approach also led to path dependence, resulting in the emergence of vehicles with unclear positioning, complex naming, and even internal competition for resources. In the context of the new energy market, where in-depth customer research and demand understanding drive C-to-B reverse vehicle development, Great Wall Motors began to lag behind.

An even more pressing issue is that just as the West cannot do without Jerusalem, Great Wall Motors cannot do without Haval.

In 2022, the Haval H6, which had held the title of China's best-selling SUV for 11 consecutive years, was officially overtaken by the BYD Song. Although Haval H6's sales have fluctuated since then, it has gradually lost its overwhelming advantage, mirroring Great Wall Motors' declining domestic sales performance in recent years. In July of this year, according to data from the China Passenger Car Association, Haval H6 sold 5,981 units, ranking 44th among SUVs, down from 22,846 units and 7th place in January.

How to revitalize Haval or, more broadly, how to find the next Haval is undoubtedly an urgent issue for Great Wall Motors to address.

Interestingly, it is unclear whether it is due to strategic considerations or other factors, but in Great Wall Motors' 2024 interim report, its five major brands are not introduced in order of sales volume:

The first on the list is not Haval, which topped sales in the first half of the year, nor is it Tank, which ranked second, or even the popular Great Wall Pickups. Instead, it is Weiying, named after Wei Jianjun. Additionally, Ora, branded as a "new energy vehicle that loves women more," is listed ahead of Great Wall Pickups, despite significantly lower sales volumes.

According to public information, Weiying, founded in 2017, sold over 100,000 vehicles in its first nine months on the market and reached a peak sales volume of 140,000 units in 2018. However, sales began to decline in 2019, falling below 100,000 units, and failed to exceed 50,000 units in both 2022 and 2023.

Furthermore, since 2023, Great Wall Motors, eager to transition to new energy vehicles, appears to have become overly focused on competition and rivals, neglecting to better satisfy and engage with the masses in meaningful ways.

I have attended several Great Wall Motors new vehicle launches in the past, and one thing that stands out is the company's undeniable technical prowess. Some of the executives presenting the vehicles were eager to go into great detail about the technical aspects, leaving little time for comparisons with competitors.

In marketing, a crucial question often goes unaddressed: Why should I care about your excellent product, and why must I buy it?

Another illustrative example is the launch of the new Haval H6. Li Ruifeng, CGO of Great Wall Motors, opened the event by stating, "If someone is cheating at the table, we must sound the alarm, stand up, bang on the table, and even overturn it!" This rhetoric added a significant amount of tension to the launch event.

Earlier, in March 2023, Great Wall Motors held its Smart New Energy Sharing Conference in Baoding, Hebei Province. At the event, the company boldly announced a "10 million yuan reward plan" to combat online water armies and address improper behaviors by competitors, garnering significant attention and becoming a hot topic in public discourse.

However, the issue lies in the fact that the public's attention was divided by the drama of automakers attacking each other, and the true focus of the conference – the intelligent four-wheel-drive electric hybrid technology Hi4 – was overshadowed.

It is understandable that since 2023, Great Wall Motors has been eager for change, with the entire company, led by Chairman Wei Jianjun, maintaining a combative stance and refusing to back down or lose again in its quest for self-validation.

However, if a company becomes overly focused on its rivals' strategies and tactics, constantly reacting and adapting, it risks becoming a pawn in their games.

In fact, aside from improved profitability, Great Wall Motors' significant success in overseas markets in the first half of 2024 underscores the company's reliability in non-marketing battlefields, where hard power and driving essentials are paramount.

As Wei Jianjun once said, "Great Wall Motors' products are actually very capable, but the current problem is that we don't know how to sell them well."

Today's domestic automotive market has evolved into a multi-dimensional battlefield where competition extends beyond just vehicles to brand tonality, founder IP, and even a sense of belief.

The good news is that since 2024, Wei Jianjun has made significant changes by frequently appearing in public, personally building his personal IP, and engaging with platforms like short videos and live streams. His affable demeanor has garnered significant attention and traffic, enhancing the Great Wall Motors brand.

However, the fundamental problem remains.

As Haval H6 struggled in recent years, Li Ruifeng, then Chief Growth Officer of Great Wall Motors, tweeted in May this year, "Today, Mr. Wei once again criticized the marketing efforts of Haval H6, stating that we don't understand marketing, lack a user mindset, and are unaware of what users care about. If we continue with the same old tactics, spending money will be a waste, and our efforts will be in vain!"

However, upon reading the entire article, one might wonder if this is truly a public apology.

Perhaps if Great Wall Motors can truly focus on its products, return to its customers, and embrace traffic, it may mark the beginning of a turnaround. To put it crudely, it's like turning the phrase "one outlet for profit, one outlet for effort" proposed in Great Wall Motors' interim report on equity dividends upside down:

Perhaps only by focusing all efforts in one direction can true profit be achieved.