Great Wall Motors, which aims to achieve a global annual sales target of 4 million units by 2025, has embarked on a rapid expansion model for acquiring plants.
From the Jingmen production base of Cheetah Automobile, to the Shangrao plant of Hanteng Automobile, and then to the Daye plant of Hanlong Automobile, the non-stop Great Wall Motor has recently acquired the Linyi production base of Zotye Automobile.
On February 9, Great Wall Motor replied to the consultation on whether to acquire Zotye, saying, "In November 2021, Great Wall Motor and the Linyi Municipal Government officially signed a contract on the Linyi vehicle and parts production base project. The signatories for this project are Great Wall Motors and Linyi Municipal Government, and no other third parties are involved. ”
This is the fourth second-hand factory acquired by Great Wall in less than two years. Great Wall Motors also said that its Linyi vehicle and parts production base project mainly includes an annual output of 120,000 vehicle production bases, engine and parts production bases, etc., which can drive more than ten supporting enterprises in the automobile industry to settle in, "Great Wall Motors revitalizes the original Zotye Linyi production base, which is conducive to activating idle production capacity, integrating and coordinating regional resources, and driving the development of regional related industries, which has a positive pulling effect." ”
In addition, Wei Jianjun, chairman of Great Wall Motors, has said that after the production, the Linyi plant will produce two of the latest models, and the two cars have all been developed and can be directly mass-produced and put on the market.
This move is still interpreted by the industry as "Great Wall acquired the factory but did not participate in the restructuring and did not assume debt". As early as its acquisition of Hanteng Automobile's Shangrao plant, Hanteng insiders said that these second-hand factories acquired by Great Wall Motors from local governments only purchased plants and production equipment, and would not participate in the restructuring of Hanteng Automobile and did not bear debt liabilities.
This is also the consistent way great wall motor has acquired these second-hand factories in the past two years.
In this regard, Great Wall Motor said, "The reason why the company quickly purchased some weak factories from local governments to be sold is to achieve the company's strategic goal in 2025." ”
In June 2021, Great Wall Motor released the "2025 Strategy" and clearly stated that it will achieve global annual sales of 4 million vehicles in 2025, of which 80% will be new energy vehicles, operating income of more than 600 billion yuan, and R & D investment will reach 100 billion yuan in the next five years.
Official sales data shows that Great Wall Motor sold about 1.281 million new vehicles in 2021, an increase of 15.2% year-on-year, a record high, and sold more than one million units for six consecutive years.
However, the existing production capacity is still far from its global production capacity target of 4 million vehicles, with sales target growth in 2025 being three times higher than in 2021, based on sales of 1.28 million units in 2021.
Therefore, Great Wall Motors expands its product matrix on the one hand, and expands its production capacity on the other hand.
At present, the annual production capacity of its Tianjin base is 500,000 vehicles, the annual production capacity of Hebei Baoding factory is 400,000 vehicles, the planned annual production capacity of Hebei Xushui Smart Factory is 1 million vehicles, the annual production capacity of Shandong Rizhao Factory is 300,000 vehicles, the annual production capacity of Chongqing Yongchuan Production Base is 250,000 vehicles, the annual production capacity of Jiangsu Taizhou Factory and Zhejiang Pinghu Factory is 100,000 vehicles, and the annual production capacity of Jiangsu Zhangjiagang Base Planning Standard is 160,000 vehicles. Hubei Jingmen plant can achieve an annual production capacity of 150,000 vehicles, Jiangxi Shangrao plant planned production capacity of 120,000 vehicles, Hubei Daye plant planned production capacity of 100,000 vehicles, Shandong Linyi production base planning capacity of 120,000 vehicles, so far, Great Wall Motor's planned annual total production capacity has exceeded 3 million vehicles.
On February 7, the Great Wall announced the official acceptance of the Iracemapolis plant in Brazil, which is expected to be put into operation in the second half of 2023 after intelligent and digital transformation and upgrading, with an annual production capacity of 100,000 vehicles and 10 electrified models in 3 years, which will radiate throughout Latin America in the future. In addition, Great Wall will have full-process production plants in Russia, Thailand, and India, of which the Russian plant has now been put into operation, and the Haval H6 HEV model produced at the Thai plant has rolled off the production line in June.
But it is worth vigilance that the rapid expansion of production capacity is also a double-edged sword. First of all, the sales performance of 1.28 million vehicles in 2021 is still far from the sales target of 1.49 million vehicles in the equity incentive plan for that year. Secondly, the transformation, equipment maintenance and management costs of many domestic and foreign factories will bring greater liquidity challenges to the Great Wall.
Moreover, the Great Wall 2025 strategy put forward the phased goal of "launching more than 60 new products in 2023 and achieving an annual production and sales of 2.8 million vehicles", and put forward the vision of "the sales assessment targets for 2021-2023 are not less than 1.49 million, 1.9 million and 2.8 million respectively, and the net profit assessment targets are not less than 6.8 billion yuan, 8.2 billion yuan and 11.5 billion yuan, respectively" in the 2021 equity incentive plan. How to realize these plans in the next two years is still a big challenge facing Great Wall Motors.
Source: The Paper
Publisher: China Economic and Trade Rule of Law Convergence Media Center
Editor-in-charge: Xiao Min