Sales volume declined, but profits soared by 52%. How did Great Wall Motors do it?

Sales volume declined, but profits soared by 52%. How did Great Wall Motors do it?

Data shows that Great Wall Motors sold 62,186 new cars in June, down 3.54% year-on-year. In the first half of 2018, Great Wall Motors sold 471,515 vehicles, up 2.34% year-on-year, achieving about 40% of its annual sales target.

Sales of Haval series models are particularly dismal.

In June, Haval SUV sold a total of 42,121 units, a sharp drop of 19.57% year-on-year. Among them, Haval H6 fell by 25.28% year-on-year, Haval H2 fell by 57.79% year-on-year, Haval H4 was basically the same as last month, Haval H5 fell by 65.33% year-on-year, and Haval H1 fell by 80.65% year-on-year.

Among the high-end models of the Haval family, only the high-end off-road vehicle H9 performed well and continued to maintain an upward trend. In June, the sales of Haval H7 were 1,022 units, a year-on-year decline of 51.68%; the sales of Haval H8 were zero.

However, the interim performance report released by Great Wall Motor showed that the net profit attributable to shareholders of the listed company in the first half of 2018 is expected to be 3.68 billion yuan, an increase of 52.07% year-on-year; the total operating revenue is 48.68 billion yuan, an increase of 17.99% year-on-year.

The increase in Great Wall Motor's profit margin in the first half of the year was due to the optimization of Great Wall's product structure and the increase in sales of WEY brand products.

In 2017, Great Wall Motors reduced prices for its products, which affected its revenue and gross profit margin. The all-round brand and product promotion led to a large increase in advertising expenses. The company increased its R&D investment in SUV products, which also affected its profitability.

In the first half of this year, WEY's sales share increased rapidly. In the first six months of this year, WEY's sales volume was 77,600 units, completing 31% of the annual target of 250,000 units. Although WEY brand sales are still not satisfactory, its sales share has increased significantly. The increase in sales of WEY, which has a higher premium, has improved Great Wall Motor's profitability. The end of the price reduction promotion also made Great Wall's financial report more eye-catching.

Although Great Wall's profitability has improved, Great Wall Motors still faces many difficulties.

In the first half of 2018, the SUV market grew by only 6.3%. Great Wall Motors, which is highly dependent on SUVs, is under great pressure.

Double-point trading has already begun, and Great Wall Motors has a serious debt of negative points. Although the acquisition of Hebei Yujie, the launch of high-end hybrid WEYP8 and C30EV, and the establishment of Beam Automotive with BMW MINI are beneficial to Great Wall's transformation in the long run, it is ultimately not enough to quench thirst.

Great Wall Motors is still in the throes of transformation.

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.

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