China's "top-notch" three major private car companies, the most profitable is not Geely, which has won the top sales for five consecutive years, nor BYD, which has the highest operating income, but Great Wall Motors. The crown of the most profitable private car company, why is it spent on the Great Wall?
1. China's top three private car companies
Great Wall, Geely and BYD are the three largest private car companies in China. In 1990, at the age of 26, Wei Jianjun took over Great Wall Motors, turning it from near-bankruptcy to one of the top three independents. Founded by Li Shufu in 1986, Geely entered the automotive industry in 1997 and gradually developed into an independent brother, and continued to win the independent sales crown from 2017 to 2021. In 1995, Wang Chuanfu founded BYD in Shenzhen, starting with batteries, and put the "automobile dream" into practice in 2003, and now BYD has become the leader of new energy vehicles.
2. The most profitable people are not Geely and BYD
The dust has settled on the 2021 annual financial reports of the three major private car companies, of which Geely has the largest sales volume, BYD has the highest revenue, and the most profitable is Great Wall Motors. According to the data, Geely Automobile's sales in 2021 were 1.328 million units, an increase of about 1% year-on-year, and the revenue was 101.6 billion yuan, an increase of 10.3% year-on-year, but the net profit was only 4.4 billion yuan, down 21.9% year-on-year. The price of Geely bicycles is only 87,000 yuan, which is the main reason for affecting its net profit. In addition, Geely's sales expenses rose by 147.6% to 6.323 billion yuan in 2021, far exceeding the 5.52 billion yuan invested in research and development, which makes people worry about Geely's future development potential.
Mention the biggest dark horse in the car market in the past year, not BYD. Under the two-wheel drive of DM hybrid and EV pure electric models, BYD's sales in 2021 reached 730093 vehicles, an increase of 75.4% year-on-year, and the performance was very eye-catching. Last year, BYD's total revenue reached 216.142 billion yuan, up 38.02% year-on-year, and net profit was 3.045 billion yuan, down 28% year-on-year. Some analysts believe that THERE are two reasons for the decline in BYD's net profit: first, BYD needs to expand and occupy a larger market share in the new energy market at a relatively low price at a relatively low price; secondly, the crazy price increase in the upstream of the new energy vehicle supply chain has led to a sharp rise in costs.
3. Why Great Wall Motors
From the comprehensive analysis of data, Great Wall Motors performed best last year. In the whole year of 2021, the cumulative sales of the Great Wall were about 1.281 million vehicles, an increase of 15.2% year-on-year, not only far surpassing BYD, but also narrowing the gap with Geely to more than 40,000 vehicles; operating income of 136.4 billion yuan, up 32.04% year-on-year, and net profit of up to 6.7 billion yuan, up 25.41% year-on-year. Geely and BYD both increased revenue without increasing profits, and only the Great Wall increased revenue and increased profits. As a result, the Great Wall has not only become the only car company among the three major private car companies to achieve a year-on-year increase in net profit, but also the most profitable car company.
Great Wall Motors took advantage of sales lower than Geely's sales and far less than BYD's operating income, creating the largest net profit, thanks to two aspects. First of all, in the past one or two years, the Great Wall has enhanced its brand premium ability through category innovation and product structure adjustment, and the average bicycle price in 2021 exceeded 106,000 yuan, an increase of 15.02% year-on-year. Also dominated by fuel vehicles, the average selling price of bicycles in the Great Wall is 20,000 yuan higher than that of Geely. The price of bicycles is a very important indicator to measure the product strength and brand power of a car company, and the Great Wall can break through the ceiling of 100,000 yuan for its own brands, and naturally has a large gain in terms of net profit.
Secondly, Great Wall Motors has better cost control and invests heavily in research and development rather than sales. According to the data, great wall investment in research and development, sales and management in 2021 was 9.07 billion yuan, 5.192 billion yuan and 4.043 billion yuan respectively, totaling 18.305 billion yuan, far lower than BYD and Geely's 22.417 billion yuan and 20.963 billion yuan. Moreover, great wall investment in research and development is equal to the sum of sales and management expenses. In contrast, Geely and BYD, the sum of sales and management expenses is far greater than the investment in research and development.