Original by New Energy Outlook (ID: xinnengyuanqianzhan)

Full text: 2789 words, reading time: 7 minutes

As 2024 draws to a close, the sales performance of major automakers has garnered significant industry attention.

According to incomplete statistics, as of November, BYD, NIO, and Xiaomi have already surpassed their 2024 annual sales targets, with cumulative sales reaching 3.737 million, 251,000, and over 100,000 vehicles, respectively.

Chery and Geely are also nearing completion of their annual sales targets, with around 99% achieved. Meanwhile, Chang'an, Li Auto, Zeekr, and NIO have yet to reach 90% of their annual targets but are all above 80%.

SAIC Motor, a former sales giant, sold a total of 3.53 million vehicles, achieving only 64.77% of its annual sales target.

However, Great Wall Motor fared even worse. Data shows that from January to November this year, Great Wall Motor sold 1.098 million vehicles, falling far short of its 2024 annual sales target of 1.9 million vehicles, with a completion rate of only 57.79%.

In the fiercely competitive auto market, gaps have already emerged among participants in the first year. Will a clear winner emerge in 2025?

1. Great Wall Motor's Sales Dilemma

Judging solely from its 2024 sales performance, Great Wall Motor is undeniably in a difficult situation.

In June 2023, Mu Feng, President of Great Wall Motor, mentioned at the 2022 Annual General Meeting that the group planned to increase investment in the plug-in hybrid (PHEV) and battery electric vehicle (BEV) markets for 2024.

Furthermore, Mu Feng disclosed Great Wall Motor's 2024 target: striving to achieve sales of 1.9 million vehicles and a net profit of 7.2 billion yuan.

However, with less than two weeks remaining in 2024, sales data shows that Great Wall Motor sold a cumulative total of 1.098 million vehicles in the first 11 months of this year.

Graph/Vehicle deliveries by automakers from January to November 2024

Source/Screenshot from New Energy Outlook on the Internet

Great Wall Motor remains a member of the "million-club" in annual sales, which is impressive. However, this figure represents a year-on-year decrease of 1.81% and is far from the target of 1.9 million vehicles.

Moreover, as major domestic automakers are vigorously developing new energy vehicles, Great Wall Motor sold only 279,000 new energy vehicles from January to November this year, directly impacting its new energy penetration rate.

According to the latest industry data, Great Wall Motor's new energy penetration rate in November was only 28.6%, far behind the industry penetration rate of 53.3% predicted by the China Passenger Car Association.

Behind the missed sales expectations and lower market penetration rate lies the uneven development of the five brands under Great Wall Motor.

Haval, once regarded as the sales pillar of Great Wall Motor and known as the "national god car," sold a cumulative total of 622,800 vehicles from January to November this year. Although it continued to lead other Great Wall Motor brands, sales decreased by 4.13% year-on-year.

Even greater declines were seen in Great Wall Pickup, which once brought pride to Great Wall Motor, and Ora, which targets female users. Sales for the first 11 months of this year were 161,000 and 58,000 vehicles, respectively, representing year-on-year decreases of 13.66% and 40.57%. The latter has become a brand that Wei Jianjun, Chairman and Executive Director of Great Wall Motor, described as "particularly loss-making."

Graph/Ora and Great Wall Pickup sales from January to November

Source/Screenshot from New Energy Outlook on the Internet

Fortunately, Tank and WEY did not hinder Great Wall Motor's progress.

Official data shows that from January to November this year, Tank delivered 209,100 vehicles, a year-on-year increase of 44%. Although WEY's sales were lower at 45,900 vehicles, they still increased by 20.56% year-on-year.

However, these two growing brands alone are unlikely to pull Great Wall Motor out of its sales dilemma at present.

2. Prioritizing Profits Over Sales?

Great Wall Motor, which started as a pickup truck manufacturer, once led the domestic market. In 2015, with the global success of the Haval H6 and pickup trucks, Great Wall Motor not only earned the title of "National SUV" but also became the world's most profitable automaker.

In 2016, Great Wall Motor's sales and profits both surpassed the 1 million and 10 billion thresholds, marking its peak in the era of fuel vehicles.

Graph/Great Wall Motor sales exceeded 1 million in 2016

Source/Screenshot from New Energy Outlook on the Internet

Even in 2020, Great Wall Motor still achieved an annual sales volume of over 1.11 million vehicles, an increase of 4.8% year-on-year, marking the fifth consecutive year of sales exceeding 1 million and fulfilling 109% of its annual sales target for that year. In the same year, Great Wall Motor's revenue exceeded 103.3 billion yuan, with a net profit of 5.363 billion yuan.

A turning point occurred in 2021.

Although Great Wall Motor still achieved annual sales of 1.2809 million vehicles in 2021, an increase of 15.2% year-on-year, it did not meet its previously set sales target of 1.49 million vehicles. In the following two years, Great Wall Motor's sales targets of 1.9 million and 1.6 million vehicles (after adjustment) were also not met.

Currently, the 1.9 million target for 2024 also seems unlikely to be reached.

Lagging transformation is one of the direct factors contributing to Great Wall Motor's missed sales expectations. Wei Jianjun even once exclaimed, "Great Wall Motor is not a leader in new energy but a follower."

It is evident that lagging behind was a conscious choice by Wei Jianjun, driven by Great Wall Motor's reluctance to give up profits.

A former employee who worked at Great Wall Motor for many years revealed in a media interview that senior management within the company believed that too radical a transformation would mean excessively high trial-and-error costs. Great Wall Motor was unwilling to give up high profits and initially invested insufficiently in new energy, leading to falling behind competitors. This lagging position further discouraged the company from abandoning the high profits of fuel vehicles.

As mentioned by the aforementioned former employee, Great Wall Motor, having lost its first-mover advantage, did not adopt the strategy of "trading price for market share" along with the industry in the face of missed sales expectations.

In fact, Great Wall Motor was not completely indifferent to price wars, but the results were minimal, and its attitude towards price wars suddenly changed after profits plummeted.

Wei Jianjun even once criticized price wars, stating, "Great Wall Motor is not afraid of declining sales. Most of the top ten automakers are losing money. Even if sales fall out of the top ten, we are not afraid and will not pursue meaningless sales."

Data shows that Great Wall Motor's cumulative sales in the first half of the year were 559,669 vehicles, failing to reach 30% of its annual target, but its net profit reached 7.079 billion yuan, an increase of 419.99% year-on-year. In other words, Great Wall Motor almost achieved its annual net profit target in the first half of the year alone.

Graph/Great Wall Motor H1 sales

Source/Screenshot from New Energy Outlook on the Internet

This may be what Great Wall Motor and its leadership are pursuing.

3. Can Great Wall Motor's "Catch-Up" Efforts Lead to 4 Million Sales?

However, Great Wall Motor's third-quarter report for 2024 served as a lesson.

Great Wall Motor sold 294,200 vehicles in the third quarter. Specifically, sales in July were 91,300 vehicles, down 16.32% year-on-year; in August, 94,500 vehicles, down 17.21% year-on-year; and in September, 108,400 vehicles, down 10.88% year-on-year.

Accordingly, Great Wall Motor's net profit for the third quarter was 3.35 billion yuan, down 7.82% year-on-year.

Admittedly, blind price wars can indeed affect a company's healthy and long-term development, but blindly adhering to profits and refusing to conform to industry trends may not be a rational choice either.

We can make a simple comparison of the sales and net profits of the "top three private enterprises in China" for the first three quarters of 2024.

Geely Automobile sold 1.4897 million vehicles in the first three quarters of 2024, an increase of 32% year-on-year; its net profit for the first three quarters reached 13.053 billion yuan, an increase of 358% year-on-year.

BYD sold 2.7479 million vehicles in the first three quarters, with a net profit attributable to shareholders of listed companies of 25.24 billion yuan, an increase of 18.1% year-on-year.

Great Wall Motor sold 853,800 vehicles in the first three quarters, with a net profit of 10.428 billion yuan, an increase of 108.78% year-on-year.

Whether in terms of sales or net profit, Great Wall Motor has lagged behind BYD and Geely. Great Wall Motor clearly understands that profits without sales support in the new energy era will not last. Otherwise, it would not have set sales targets of 1.9 million vehicles for 2024 and 4 million vehicles for 2025.

Vigorously "catching up" has become a top priority for Great Wall Motor at present.

For example, Great Wall Motor has changed its previous attitude as a "follower" and is fully committed to new energy and intelligence.

In March this year, Great Wall Motor introduced Yuanrong Qixing, an autonomous driving technology company, as its second intelligent driving supplier, providing end-to-end intelligent driving solutions for Great Wall Motor. The WEY Blue Mountain model was the first to benefit from this cooperation.

On August 21, WEY unveiled its all-new Blue Mountain, the first NOA intelligent six-seater flagship SUV under Great Wall Motor. Perhaps to demonstrate the company's emphasis and determination regarding its intelligent strategy, Wei Jianjun appeared at the new car launch event after a six-year absence.

Graph/WEY Blue Mountain

Source/Screenshot from New Energy Outlook on the Internet

In the past November, Great Wall Motor completed a US$100 million Series C round of funding for an exclusive investment in Yuanrong Qixing.

Meanwhile, Great Wall Motor also launched its intelligent driving solution, Coffee Pilot, making 2024 the first year of intelligence for the company according to industry insiders. Even at the 2024 Guangzhou Auto Show, Great Wall Motor took a unique approach by showcasing only the all-new Blue Mountain in a 3,000-square-meter exhibition hall for the first two days, attracting much attention.

While strengthening intelligence and marketing, Great Wall Motor has not neglected product quality and has established a quality management system covering the entire process from research and development, procurement, production, to sales.

However, with the new energy vehicle penetration rate exceeding 50% for five consecutive months in the domestic market, it is no longer easy to quickly capture market share.

Based on this, Great Wall Motor has consistently adhered to its strategy of promoting high-quality exports.

In the first half of 2024, Great Wall Motor sold 199,800 vehicles overseas, a significant increase of 62% year-on-year, accounting for 36% of its overall sales. Currently, Great Wall Motor has over 14 million global users, more than 1,300 overseas sales channels, and cumulative overseas sales exceeding 1.7 million vehicles.

Graph/Great Wall Motor overseas sales in H1 2024

Source/Screenshot from New Energy Outlook on the Internet

However, even so, with new energy vehicles becoming increasingly competitive, Great Wall Motor, which is busy "catching up," needs more models to step up if it wants to achieve its 2025 sales target of 4 million vehicles.