10/09 2024 370
With cumulative sales currently at 853,800 units, the year-start goal of 1.9 million units seems increasingly out of reach.
@TechInsights Original
Great Wall Motor's 'Golden September' sales report falls short of expectations!
Great Wall Motor announced its September sales on the last day of the National Day holiday, reporting 108,400 units, down 10.88% year-on-year; cumulative sales for the year reached 853,800 units, down 1.18% year-on-year. This marks the fifth consecutive month of declining sales for Great Wall Motor.
From May to August this year, Great Wall Motor's sales declined by varying degrees, with declines of 9.51%, 6.55%, 16.32%, and 17.21% respectively. The year-start sales target of 1.9 million units now seems increasingly unattainable, as Great Wall Motor faces severe sales difficulties.
Among the top five domestic automakers, BYD's new energy vehicle sales totaled approximately 2.7479 million units from January to September, up 32.13% year-on-year. In comparison, the gap between Great Wall Motor and BYD is significant in terms of both overall scale and growth rate.
However, Chairman Wei Jianjun of Great Wall Motor has stated, "Great Wall Motor is not afraid of declining sales. Most of the top ten automakers by sales are losing money." He emphasized, "Even if our sales fall out of the top ten, we are not afraid and do not pursue meaningless sales."
Nonetheless, BYD is one of the few profitable new energy automakers.
Part.1
Upholding Profitability
Great Wall Motor currently operates five major brands: Haval, WEY, ORA, Pickup, and Tank; its product portfolio primarily covers SUVs, sedans, pickups, and MPVs, with powertrains including traditional engines, plug-in hybrids, pure electric, and hydrogen-powered alternatives.
Among these five brands, only Tank has stood out. According to the first-half financial report, Tank's sales share increased from 10% in the same period last year to 20%, surpassing Pickup to become the main driver of Great Wall Motor's scale and profitability. However, this positive trend was short-lived, as Tank sold 19,000 units in September, a modest 3.8% year-on-year increase, barely maintaining growth. Its monthly sales peaked at over 26,000 units and plummeted to 19,000 units within three months.
For Great Wall Motor, WEY's sales performance has been moderate and manageable, while Haval, Pickup, and ORA have struggled with negative growth. ORA's decline has been particularly pronounced, with cumulative sales of 31,749 units from January to June, down 32.87% year-on-year, making it a brand that Wei Jianjun described as "suffering particularly severe losses."
Even more striking is the plight of Haval, once a leader in the SUV segment. The once-lauded "national miracle car" Haval H6, which has set over 100 monthly sales records, has underperformed in the market over the past year. In the first half of this year, Haval sold only 297,000 units, a meager 0.17% year-on-year increase. Excluding overseas sales, Haval's domestic sales have declined.
'This means that the fundamental sales base of Great Wall Motor is facing severe challenges,' noted one analyst.
While many automakers opt for price cuts to gain market share, Great Wall Motor chooses to uphold profitability. Wei Jianjun calculated that their new energy brand ORA's Black Cat and White Cat models sold over 20,000 units per month, but each unit incurred a loss of RMB 13,000, potentially resulting in losses of up to RMB 2.6 billion annually.
'Our choice was to halt production. For other companies, this decision would be difficult because they can use numbers to tell a story,' Wei Jianjun said. He emphasized that without profitability, a company cannot sustain itself in the long run.
Part.2
Lagging Transformation
According to Great Wall Motor's latest half-year financial report, the company reported revenue of RMB 91.43 billion in the first half of 2024, up 30.7% year-on-year, and net profit of RMB 7.079 billion, a staggering 420% year-on-year increase.
Notably, while both revenue and net profit showed significant growth, this primarily stemmed from overseas sales growth and further optimization of the domestic product mix, rather than increased sales volumes.
In the overseas market, Great Wall Motor achieved remarkable results. In the first half of the year, it sold 199,800 units overseas, a substantial 62% year-on-year increase, accounting for 36% of total sales; domestic sales stood at 355,000 units, down 10% year-on-year. According to Guotou Securities, Great Wall Motor's export sales are expected to continue growing, potentially reaching 400,000 to 500,000 units in 2024.
Furthermore, Great Wall Motor's domestic sales mix is evolving. In the first half of this year, it sold 141,000 units priced above RMB 200,000, accounting for over 25% of total sales. This represents a 64.3% year-on-year increase, a key factor driving the company's substantial profit growth.
Great Wall Motor attributes the significant sales pressure it faces to inadequate marketing efforts. Li Ruifeng, CGO of Great Wall Motor, previously stated, 'Mr. Wei once again criticized the marketing efforts of Haval H6, accusing us of being completely clueless about marketing, lacking a user-centric mindset, and ignoring what users care about.' He added, 'This lack of marketing prowess is not limited to this one model but exposes the shortcomings of our entire marketing team.'
To boost online traffic, the Chairman himself has taken to live streaming, enhancing his personal brand image and, in turn, strengthening the company's brand influence and market competitiveness. While these measures have increased brand awareness to some extent, converting online traffic into actual sales remains challenging.
Ultimately, under the trend of electrification in the automotive market, Great Wall Motor has failed to introduce competitive new energy vehicle products, a crucial factor contributing to its declining sales.
Due to its relatively sluggish transformation, new energy vehicles account for only 23.65% of Great Wall Motor's sales. As a former industry leader, it now faces the severe situation of its market share gradually being eroded by competitors. Wei Jianjun's question, 'How will Great Wall Motor survive next year?' is particularly thought-provoking at this juncture.
Although Great Wall Motor has temporarily concealed its weak domestic sales performance with strong overseas profitability, it cannot afford to let its guard down in the fiercely competitive market ahead.