Reporter 丨 Xiaomin Trainee 丨 Yi Han
Produced by 丨aotou finance (theSankei)
Recently, Great Wall Motor (601633. SH) announced that car sales in the first two months reached 182,600 units, down 19.95% year-on-year.
Aotou Financial Analysis found that at present, under the weakness of its own sales, Great Wall Motors has three "uncontrollable" factors such as insufficient supply of exclusive suppliers, a sharp decline in exchange rates and a slowdown in the growth rate of new energy vehicle sales.
Great Wall Motor's 2021 version of the equity incentive plan shows that the sales assessment target for 2021 is 1.49 million vehicles, and the actual sales volume is only about 86%.
Entering 2022, Great Wall Motor's sales target is 1.9 million units, which seems to be not easy to achieve at present.
Factor one
Suppliers are undersupplied
Recently, Great Wall Motor announced that its February 2022 production and sales report showed that the company's automobile sales in the first two months reached 182,600 units, down 19.95% year-on-year.
Among them, Great Wall Motor's sales in January and February were 111,800 units and 70,800 units, respectively, down 19.59% and 20.5% year-on-year, respectively.
In the production and sales express, Great Wall Motor made a special explanation for the obvious decline in production and sales data in February.
Great Wall Motors said that it was mainly due to insufficient supply of body electronic stability systems ("ESP") produced by Bosch Automotive Parts (Suzhou) Co., Ltd. ("Suzhou Bosch"). Bosch is the exclusive supplier of ESP configurations for our main models.
Great Wall Motor particularly emphasized that the company is actively promoting the Bosch Group headquarters and chip suppliers to jointly formulate a production increase plan, and strive to quickly solve the supply problem. Bosch is one of the world's largest suppliers of automotive technology. Founded in 1999, Bosch Suzhou currently produces chassis control systems including ABS anti-lock braking system, TCS traction control system and ESP electronic stability program.
On February 19, according to the "Suzhou Municipal Epidemic Prevention and Control Circular No. 25 of 2022", the staff of Bosch Automotive Parts (Suzhou) Co., Ltd. was diagnosed with asymptomatic covid-19 infection. This has had a huge impact on the production of Bosch suzhou.
However, from the monthly sales of Great Wall Motors, it can be seen that the company's sales have fallen by about 20% in January, and only accelerated the decline in February.
Aotou Finance found that Great Wall Motor's sales began to decline from August 2021 and lasted for four months.
Specifically, from August to November, Great Wall Motor's sales were 74,300 units, 100,000 units, 112,100 units and 122,500 units, up -16.98%, -15.1%, -17.33% and -15.65% year-on-year, respectively.
It was not until December 2021 that Great Wall Motor's sales increased to 162,400 units, up 8.17% year-on-year.
From this point of view, Suzhou Bosch's impact on the sales of Great Wall Motors is not large, and the company's sales decline is more affected by its own factors.
Moreover, subject to the constraints brought about by the industrial chain, it has become the first major "uncontrollable" factor of Great Wall Motors.
Factor two
Overseas sales declined
"Great Wall Motors must go out, and if you die, you must die abroad." This is the determination of Wei Jianjun, chairman of Great Wall Motors, to go outward.
In 2021, Great Wall Motor's overseas sales reached 142,800 units, an increase of 103.67% year-on-year, achieving a doubling, and sales accounted for 11.1%.
On January 27, Great Wall Motors officially took over the Plant in Iracemapolis, Brazil, and is expected to start production in the second half of 2023 with an annual production capacity of 100,000 units, which will radiate throughout Latin America in the future.
At the same time, Great Wall Motors said it will invest more than 10 billion reais (about 11.5 billion yuan) in the next 10 years.
This is a good news for Great Wall Motor's overseas factories recently, but at the same time, there is a greater negative information.
As early as 2019, Great Wall Motor's first overseas full-process vehicle plant, the Tula plant in Russia, was officially put into operation, costing up to 3.5 billion yuan. At present, the Tula plant is the only manufacturing plant built by Chinese car companies in Russia that includes stamping, welding, painting, final assembly and other processes.
Great Wall Motors regards the Russian market as an important support for the development of overseas markets and as a bridgehead for entering the European market.
According to the news released by the official website of Great Wall Motor, the European Business Association (AEB) report shows that Great Wall Motor's Russian market sold 4909 new cars in November 2021, an increase of 202% year-on-year, ranking among the top three in the SUV market. From January to November, Great Wall Motor sold a total of 34,765 vehicles, an increase of 134% year-on-year.
According to data, Great Wall Motors will sell 39,100 vehicles in Russia in 2021, accounting for more than 27% of the overall overseas sales.
However, in the first two months of 2022, Great Wall Motor's overseas sales reached 18,800 units, down 7.66% year-on-year, and this downward trend is likely to continue.
Recently, Great Wall Motors publicly responded that the production and sales of the company's Russian plant will not be affected; the Ukrainian export business may be affected in the short term, but there will be no problem in the long run.
However, sales may not be affected, but it will have a huge impact on profits. Great Wall Motor's 2021 semi-annual report estimates that the ruble depreciated by 5% against the renminbi, and the company's total profit will be reduced by 25.4 million yuan.
At present, the Russian ruble is constantly depreciating, and the profit space of Great Wall Motors can be imagined, which has become the second largest "uncontrollable" factor of Great Wall Motors.
Factor three
The growth rate of new energy vehicle sales is not as fast as the industry
Great Wall Motors is not good at itself in the field of new energy vehicles.
In 2021, Great Wall Motor's sales of new energy vehicles reached 137,000 units, an increase of 138.51% year-on-year, doubling like overseas sales, accounting for 10.69% of sales.
However, in 2021, the retail sales of new energy passenger cars in mainland China reached 2.989 million units, an increase of 169.1% year-on-year. Although Great Wall Motors is not as fast as the national growth rate, the gap is not large.
In the first two months of 2022, Great Wall Motor's sales of new energy vehicles reached 20,300 units, an increase of 15.12% year-on-year.
According to data released by the China Automobile Association, the sales of new energy vehicles in the first two months of 2022 in the mainland reached 765,000 units, an increase of more than 150% year-on-year.
Obviously, the sales growth rate of New Energy Vehicles of Great Wall Motors has formed a huge gap compared with the entire industry.
At the beginning of December 2021, Euler Automobile was exposed to suspected of defrauding consumers, and the company's manager Dong Yudong said that he apologized for the troubles caused by the problem of Euler's good cat chip to the majority of users, and promised to seriously investigate the ins and outs, properly handle related matters, and give consumers a satisfactory answer.
Euler Automobile gave a solution: the owner of the car ordered the Euler good cat model before December 31, 2021, and gave away a "tiger wings" equity package worth 7200 yuan, but the owner did not "buy it".
In mid-February, Euler announced that its two models, black cat and white cat, would stop receiving orders.
The official then replied that "due to the shortage of chips, spare parts supply can not guarantee production and many other reasons, resulting in a large backlog of black and white cat models orders, customer car purchase cycle is too long, affecting the customer experience, in order to avoid trusting euler models of car owners to bring more bad car buying feelings, manufacturers will coordinate internal resources to meet the existing order scheduling plan faster, to ensure that existing car order customers pick up speed and car purchase benefits." ”
Soon after, Euler said one of the reasons for stopping taking orders: "The loss of black cats on a single station exceeded 10,000 yuan."
Chip shortage, rising parts prices, Great Wall Motors' sales growth rate represented by Euler has slowed down, which is likely to last for a period of time, which has become the third largest "uncontrollable" factor of Great Wall Motors.