Haval's sales have dropped sharply, while the new brand WEY started strong but ended weak. Where is the turning point for Great Wall Motors?

Great Wall Motors' recent sales are not optimistic.

In July, Great Wall Motor's sales volume fell by 27.5% year-on-year. As of the end of July, Great Wall Motor's cumulative sales volume was 525,849 vehicles, which only achieved 45% of the annual target sales volume.

Such a large decline is not simply due to the failure of a certain product, but rather due to an overall drop in sales of its vehicle models.

The performance of Haval H6, which has long been at the top of the SUV sales list, and the new brand WEY are both disappointing. After experiencing a peak of over 10,000 units, the sales of VV5 and VV7 in July were both less than 4,000 units, showing a high start and a low end.

The sharp increase in Geely Auto's total sales further highlights the predicament of Great Wall Motors.

In July, Great Wall Motors' total sales were 54,000 units, while Geely Auto's total sales were over 120,000 units, more than twice that of Great Wall Motors. In July, Geely Auto's sales increased by 32% year-on-year, while Great Wall's sales fell by 21.33% year-on-year.

The once glorious Great Wall Motors seems to be in big trouble.

SUVs make or break

Great Wall seized the market bonus period of SUVs, achieved rapid development, and entered the first camp of domestic domestic brands in one fell swoop.

The recent decline in SUV dividends has hit Great Wall Motors the hardest, as it has abandoned sedans and focused on SUVs. The increasingly fierce competition in the SUV market is also eating into Great Wall Motors’ market share.

The WEY brand, which was highly anticipated, has seen a decline in sales after a surge. When the WEY series was first launched, it attracted a large number of consumers with its good looks. However, the subsequent high fuel consumption and the exposure of fuel consumption fraud cast a shadow on the WEY brand.

Moreover, in terms of hardware, the WEY series still mostly uses Haval's old system, so it is criticized as "WEY in a different shell".

Lynk & Co, which is also positioned at the high end, has seen its sales gradually increase. Lynk & Co uses the CMA platform jointly developed by Volvo and Geely, and Volvo's brand endorsement is undoubtedly a major boost to its sales.

The rise and fall in sales of Lynk & Co and WEY indicate that consumers are voting with their feet, and the sales gap between the two is likely to widen further in the future.

Great Wall also made mistakes with its main model Haval.

Haval's product planning is too complicated. In the price range of 90,000 to 160,000 yuan, general automobile companies will only launch one or two models, while Great Wall has launched eight models of the 6 Series SUV alone. Most consumers cannot understand such a complex product system, and dealers also find it difficult to accurately match each product with the corresponding consumer.

Such intensive deployment is actually a low-level duplication, which causes unnecessary internal friction and waste of resources. Great Wall invests several billion yuan in research and development every year. This amount of money is not small, but when averaged out for each model, it is not much.

It's not just sales that's troubling Great Wall Motors.

Great Wall has just launched a new electric car brand called "Ora". Even so, Great Wall's pace in the field of new energy vehicles is still slower than its peers.

At present, the dual-points transaction has been launched. Great Wall Motors is a major negative points holder. Although the recent cooperation with BMW can increase positive points, it is not enough to quench thirst. In the short term, Great Wall Motors is still under great pressure in terms of points.

Great Wall has achieved great success with its investment in SUVs, but this success seems to have made Great Wall conservative.

The over-intensive launch of Haval series models actually highlights the lack of innovation of Great Wall Motors and the drawbacks of walking on one leg after abandoning sedans. Not only is Great Wall Motors slow in the layout of new energy vehicles, but it has also not made much progress in the intelligentization of automobiles.

The glory of the past and the hidden worries of the future

The decline in sales is only the surface of Great Wall Motor’s predicament.

At the beginning of the new century, with the rapid development of China's economy, the Chinese people's demand for cars began to explode. However, cars were still a rare item at that time. Buying a car was still a minority for the working class and ordinary people.

At that time, the most concerned thing in the automobile market was the price of the car. Consumers did not pay much attention to the quality, and just having a car to drive was already a good thing.

This stage is the period when domestic brands began to rise. Domestic brands were busy competing for the low-end car market and were not strict in pursuing quality. As long as the price was competitive, they could occupy a place in the market.

However, as cars gradually became more popular, Chinese people's requirements for cars gradually increased. They not only paid attention to the price, but also began to pay attention to the quality and appearance. Compared with sedans, SUVs of the same price have larger space, more style, and more face. The SUV bonus period began to appear. Great Wall seized this opportunity in time and rose rapidly.

However, with the further upgrading of automobile consumption, good-looking appearance and large size alone are no longer enough to attract consumers. Chinese people's understanding of automobiles has gradually improved, and they pay more attention to the performance and quality of automobiles.

However, it is difficult to improve the quality of cars in a short period of time. Compared with foreign countries, China's automobile industry is far behind, and it is difficult to catch up with it only by relying on its own research and development efforts. In this round of consumption upgrade, Geely and SAIC began to gain the upper hand, and an important reason for this is that they have integrated advanced foreign technologies.

SAIC learned modular development from Volkswagen and core Powertrain technology from GM. Geely absorbed advanced technology from foreign automakers through a series of acquisitions. Geely and Volvo established a joint venture, Lynk & Co, which shared a development platform with Volvo.

In contrast, Great Wall relies mainly on its own technology, which is a big disadvantage. And this disadvantage will be directly reflected in the products.

Great Wall's WEY is actually still following Haval's old path - piling up configurations and competing in size and appearance. WEY is more like an upgraded version of Haval. Lynk & Co is developed on a more advanced international platform and has great potential for improvement. However, due to technical limitations and path dependence, WEY has already reached its ceiling as soon as it was launched.

WEY started high but ended low, while Lynk & Co's sales are steadily climbing. With the continuous advancement of automobile consumption upgrades, the gap between Lynk & Co and Great Wall is likely to widen.

It cannot be blamed on Great Wall for not trying hard. It is just that it has too few cards in its hand and its opponent is Geely, which is too powerful.

A turning point for the Great Wall?

Great Wall has always hoped to get foreign aid like Geely and SAIC. Wei Jianjun, chairman of Great Wall, said frankly that he wanted to form a joint venture a long time ago, but "it is not actually our turn to do so."

As early as 2008, Great Wall Motors had negotiated with Chrysler and the two sides started to develop products, but nothing happened. In 2011, Great Wall Motors tried to form a joint venture with Jaguar Land Rover, but the latter eventually chose Chery. In April 2015, foreign media reported that Volkswagen might cooperate with Great Wall, but Volkswagen chose JAC.

The realization of the cooperation with BMW this year can be said to have fulfilled a wish of Great Wall. On July 10, Great Wall Motors and BMW (Netherlands) Holding Company officially signed a joint venture contract. The new company is named Beam Company, with each party holding 50% of the shares.

This cooperation is different from previous joint ventures. China has lifted restrictions on the shareholding ratio of new energy vehicle joint ventures. Great Wall and BMW each contribute 50%, reflecting a more equal partnership.

Wei Jianjun said: "This cooperation embodies a free combination and is also a recognition of each other. It is a joint venture between private enterprises in the true sense and the highest quality."

Compared with traditional joint ventures where foreign capital provides drawings and Chinese side undertakes OEM production, this joint venture adopts BMW's global R&D and production control standards, while leveraging Great Wall Motors' capabilities in localized production, supporting facilities, management and other fields.

The first product of the new joint venture is a compact SUV, to which both BMW and Great Wall have made technical contributions. Great Wall SUV also has a strong brand effect in China and can provide corresponding brand support for the first product.

Based on previous joint venture experience, it is difficult for Great Wall to obtain BMW's core technology. This is also true for the electric vehicles produced in cooperation. What Brilliance cannot obtain, it is also difficult for Great Wall to obtain.

However, Great Wall will still benefit greatly from this cooperation.

BMW's advanced production concept will enhance Great Wall's standardized production capacity. Great Wall, which focuses on the domestic market, needs to learn from BMW's overseas marketing management experience. The joint venture will promote Great Wall's understanding and adaptation to the international automobile market, which will help Great Wall Motors further expand into the international market.

In terms of brand culture building, Great Wall can also learn from BMW. In addition, from the moment of marriage with BMW, Great Wall has obtained BMW's brand endorsement. This is undoubtedly a rare opportunity to increase the premium of Great Wall brand.

The joint venture company's factory will be located in Zhangjiagang, a port city in Jiangsu. Zhangjiagang is located in the Yangtze River Delta region with better supporting conditions for the automobile industry, which will help to make up for the location disadvantage of Great Wall Motors, which is located in the small city of Baoding.

In the future, Great Wall is not without opportunities.

Great Wall has been generous in its R&D investment over the years, and it is not without technological accumulation. It’s just that there is still a gap compared with its joint ventures and Geely, which acquired and integrated Volvo.

There will still be a large volume in China's low-end automobile market in the future. Great Wall should use its own advantages to maintain this basic market and consolidate its position in the SUV market.

In terms of new energy vehicles and intelligence, Great Wall needs to make long-term and unremitting investments, otherwise it is likely to be eliminated by the market. Great Wall Motors will experience a difficult period during the transformation. However, there are still many uncertainties about who will win the future automobile market.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.