Haval H6 ranked first in domestic compact SUV sales for nine consecutive years, and still accounts for 30% of Great Wall Motor's total sales, which is the resource support for its transformation and upgrading
Wen | Liu Ding
The Haval H6 is the holder of the best-selling record for Chinese brand models. From 2013 to 2021, the Haval H6 won the annual sales volume of the Chinese compact SUV market for nine consecutive years and was far ahead of the second place, with sales in 2016 being 1.8 times that of the second place.
In February 2021, Haval H6 sales slipped to second place at one point, but it was almost the same as the first place, and still equivalent to twice the third place.
But in February 2022, the Haval H6 not only lost the title of china's compact SUV market sales champion, but also sold only about 75% of the first place, and only sold 563 more cars than the third place.
Why did this classic model suddenly decline, and how much of an impact did this have on Great Wall Motors?
Is the Haval H6 decline temporary or trendy?
The decline in sales of the Haval H6 can be divided into two phases:
Since the second half of 2021, the market has been weak, new energy vehicles have grabbed the market share of fuel vehicles, and Haval H6 has shown fatigue; in the first two months of 2022, Haval H6 has encountered a shortage of parts, insufficient supply, and sales trends have become more and more severe.
First, since the second half of 2021, the Haval H6 has encountered unprecedented challenges.
On the one hand, the competitive pressure brought by new energy vehicles to fuel vehicles is increasing. In the second half of 2021, the sales volume of BYD's new energy model Song PLUS increased month by month, bringing obvious competitive pressure to haval H6.
Song PLUS new energy is in the price range of 150,000-200,000 yuan, Haval H6 is the price range of 100,000-150,000 yuan, "Finance Eleven" learned from Haval H6 dealers: consumers are no longer sensitive to such a price difference, preferring to spend tens of thousands of yuan more or apply for car loans to choose new energy models.
Since the second half of 2021, Song PLUS new energy sales have grown rapidly, and now it is almost equal to the Haval H6. In June 2021, Song PLUS sold 5,450 units, about 25,000 fewer than the Haval H6, but by February 2022, Song PLUS had sold 19,057 units, only 563 fewer than the Haval H6.
Song PLUS's sales ranking in China's compact SUV market has also improved rapidly. It reached the top ten in November 2021 and moved up to third place in February 2022, while the Haval H6 slipped to second place.
In 2021, China's new energy vehicle sales increased by 1.6 times year-on-year, and the market share reached 13.4%. In China's SUV market, Song PLUS's market share increased to 1% in 2021, while the Market Share of The Haval H6 slipped to 3.7% from 4% in 2020.
On the other hand, in the second half of 2020 and the end of 2021, the Haval H6 has increased sales in two pulses, overdrawing demand, and the market has become weaker and weaker.
After 2017, Haval H6 stopped growing, and sales declined year by year, but the decline was not large, and the overall sales volume could still be maintained.
This is mainly related to the prosperity of China's SUV market. The total size of China's SUV market has grown explosively from 3 million in 2013 to about 10 million in 2017, and has since stagnated, and the total size will remain about 10 million in 2021.
When the market has become saturated, external intervention, although it can stimulate sales in the short term, will also overdraft future sales. The Haval H6 was stimulated twice at a time when the market was fragile.
In the first half of 2020, the impact of the epidemic led to a sluggish sales, and in the second half of the year, the epidemic subsided, and the previously suppressed consumer demand was released in a concentrated manner, and sales rebounded in retaliation. But in the first three quarters of 2021, Haval H6 sales continued to decline.
In November and December 2021, Haval H6 sales rose again. "Finance Eleven" learned from Haval H6 dealers that at that time, Great Wall Motors tilted the scarce parts resources such as chips to Haval H6, and provided dealers with greater sales incentives, thus stimulating sales. But then, in January and February 2022, sales fell sharply again.
Second, in the context of a weak market and new energy vehicles seizing the market, in the first two months of 2022, haval H6 suffered a shortage of parts. In January 2022, Haval H6 sales fell 23% year-on-year and 38% in February.
Great Wall Motors said that this was due to the insufficient supply of body electronic stability systems from Bosch, the core supplier of the main model.
"Finance Eleven" learned from The Haval H6 dealership that in the past two months, the sales incentive given by haval H6 to dealers has been reduced a lot, and the price has risen for consumers, while the car cycle has been extended to a month and a half. The supply of other models of Great Wall Motors is also blocked, before only popular models need to wait for the car, now the whole line of products have to wait for a long time, such as Haval H9 and other low-selling products are almost out of production, need to pay a deposit in advance to produce, and have to wait for three months.
If it is a problem caused by the company's own reasons, it may be able to reverse the disadvantage through its own efforts, but if the change in consumption trend triggers the trend shift in the industry, it is difficult for the company to fight through its own efforts.
The Haval H6 is facing not only the shortage of parts for Great Wall Motors itself, but also the industry trend. In fact, Changan CS75 and Geely Boyue, which are also equipped and priced at the same price as Haval H6, will also have a sluggish market in the second half of 2021 under the competition of new energy vehicles, while Song PLUS New Energy is advancing by leaps and bounds.
Under the trend of new energy vehicles, the attractiveness of traditional fuel SUV vehicles represented by Haval H6 is decreasing significantly.
How much impact will the Haval H6 decline have on the Great Wall?
Although peers are facing the same problem, Great Wall Motors has been the most affected.
First, Great Wall Motors is the most dependent on SUV models.
Although the sales of CS75 and Boyue declined, the total sales of both in Changan Automobile and Geely Automobile accounted for about 10%, and the total sales of Changan Automobile and Geely Automobile in January and February 2022 did not fluctuate significantly due to the decline of these two models.
However, haval H6 accounts for about 30% of the total sales of Great Wall Motors, and together with other derivative models, the entire Haval brand accounts for about 60% of the total sales of Great Wall Motors;
Second, the Haval H6 affects the overall stability of Great Wall Motors.
In January and February 2022, the Haval H6, the entire Haval brand and pickup models all experienced a sharp decline. Great Wall Motor's total sales fell by 20% and 21% year-on-year, respectively.
Third, Great Wall Motors needs the Haval H6 to buy itself time to develop new products.
Since 2013, The success of Great Wall Motors has almost always been based on the success of the Haval H6, which not only made rolling profits for Great Wall Motors, but also proved that Great Wall Motors has the ability to build classic models. But Great Wall Motors also desperately needs a second classic model to prove that this capability is sustainable.
However, in the past few years, although Great Wall Motors has worked hard to build new models and successively launched brands such as Weipai, Euler and Tank, progress has been slow, and in February 2022, the three accounted for 6%, 9% and 9% of Great Wall Motors' total sales respectively.
Although the tank and Euler brands are currently very hot in the market, it will take time for sales to increase. "Finance Eleven" learned from The Haval H6 dealership: The Tank 500 model will be displayed at various distribution outlets at the end of March 2022, and the order for the Tank 300 is full, but the supply is still tight; the Euler brand will launch more expensive lightning cats and ballet cats this year; in general, compared with the Haval H6, the price center of Great Wall Motor's future product positioning will be significantly improved, focusing on the niche market, and it is expected that sales will definitely decline.
In the future, in the process of the trade-off between new and old products, whether the vital Haval H6 can continue to provide resources for the transformation and upgrading of Great Wall Motors is facing considerable uncertainty.
The author is a researcher at Caijing, editor: Mark
The Caijing Industry Research Center focuses on the capital market, discusses the success or failure of the company, explores the rise and fall of the industry, discovers value, and warns of risks
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