Auto-First| Liu Tianming/Wen Li Siting/Illustration
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A few years ago, Wei Jianjun, the head of Great Wall Motors who has been building cars for 30 years, asked himself: "Will Great Wall Motors survive next year?" At that time, the development of Great Wall Motors was going smoothly, with rising sales and considerable profits, and was once called "the dangerous words of the prosperous world".
Today, two years later, in the face of the critical period of transformation and transformation of the automotive industry, the development of Great Wall Motors has really encountered problems and really entered the painful period of transformation.
In the first quarter of this year, Great Wall Motor's sales report card was not satisfactory, with cumulative sales falling 16.32% from the same period last year to 283,500 units. The Haval brand and the Great Wall pickup truck both showed double-digit declines. In the first quarter of the Chinese brand passenger car market, Great Wall Motors' sales fell short of BYD, slipping to fifth place, and it is also the only company in the top ten of Chinese brand passenger car sales that has experienced double-digit declines.
Replaying the history of Great Wall Motors for more than 30 years, it has faced many crises and has also grasped the market outlet. However, at a time when the automobile industry is undergoing great changes, many Chinese brand car companies, including Great Wall Motors, not only want to change the pulse of the industry, but also steadily improve the speed of transformation.
Wei Jianjun, who loves racing cars in his bones, makes cars as if he is destined. After experiencing beijing Tongxian micro motor factory, Baoding carpet factory and other work, 26-year-old Wei Jianjun took the initiative to take over the predecessor of Great Wall Motors, Great Wall Industry Company.
Riding on the spring breeze of reform and opening up, Wei Jianjun focused his business on the special vehicle segments such as refrigerated cars and sealed cars, helping Great Wall Industrial Company get rid of losses and complete the original accumulation of capital. The "Automotive Industry Policy" issued in 1994 changed the pattern of the automobile industry, and the "catalog" system management was officially implemented.
The "catalog" system management made Great Wall Motors and Wei Jianjun see that it was time to turn, and the pickup truck model entered Wei Jianjun's vision. In 1996, Great Wall Motors launched its first pickup truck model, the Great Wall Deer Pickup Truck. With cost performance and durability, the Great Wall Deer Pickup truck took only two years to win the sales champion in the Chinese pickup truck market.
After 2001, Great Wall Industrial Co., Ltd. was restructured to form Great Wall Motor Co., Ltd. After completing the restructuring, Great Wall Motors is not limited to the pickup truck market and has begun to lay out the SUV market. A year later, Great Wall Motor's first SUV product, Sever, was launched.
In the capital market, Great Wall Motors, which has two business lines of pickup trucks and SUVs, is highly sought after. When Great Wall Motors landed in Hong Kong stocks, it received more than 170,000 stock subscription applications, and the number of subscribed shares was 683 times the number of shares it planned to issue, and the heat of the capital market triggered the dialback mechanism, and the number of shares publicly issued by Great Wall Motors was increased. Landing on the Hong Kong stock market, Great Wall Motors successfully obtained 1.773 billion yuan.
In the face of the rapid development of China's automobile market, great wall motors with huge funds do not seem to be willing to just layout pickup trucks and SUV products, in 2007, Great Wall Motors got the car production qualifications, and launched the genie, Ling Ao and Xuanli three car products, in 2010, Great Wall Motors launched the Tengyi C30, marking the Great Wall's full entry into the field of car production.
In the 8 years after obtaining the car qualification, great wall car products have experienced ups and downs. In 2014, Great Wall Motor's sales of car products fell 57.42% year-on-year to 87,500 units, and in this year, Great Wall Motor hid its car business and focused on the SUV market.
You know, for a long time in the past, the car market is the largest segment of China's auto market, taking 2014 as an example, the car market share accounted for 70%, while the SUV model market share was only 20.7%. Great Wall Motors gave up the car business, which seemed like "losing watermelon and picking sesame seeds" at the time, but it did not know that it was the right bet.
Since 2014, the SUV market has begun to develop rapidly, production and sales have maintained a high-speed growth trend, even in 2018 the overall market declined, the SUV market fell better than the overall level of the market. Great Wall Motors, which stopped its car business, took advantage of the time and place, and broke through the annual sales million mark for the first time in 2016.
In 2005, Great Wall Motors, which tasted the sweetness of SUVs, launched the Haval CUV, marking the birth of the Haval series. With the continuous expansion of the Haval series lineup, Haval has the signs of becoming an independent brand.
Six years later, Haval reached a turning point. In August 2011, the Haval H6 was launched at Great Wall Motor's new plant in Tianjin, and Great Wall Motor intends to make the Haval brand independent. According to the A-share prospectus of Great Wall Motors, under the overall brand leadership of Great Wall Motors, SUV, pickup truck and car will gradually focus on the three sub-brands of Haval, Fengjun and Tengyi.
After focusing SUV products on Haval, Great Wall Motors' SUV products were uniformly named after Haval. In 2013, the Haval product range went independent, with a product matrix that included the medium-sized SUVs of the H-Series and the small-size SUVs of the M-Series.
In 2016, WEI Jianjun's high-end brand WEY was launched, taking on the heavy responsibility of Great Wall Motors to go up. In the early days of the ESTABLISHMENT OF THE WEY BRAND (later known as Weipai), Great Wall Motors' proud 7DCT transmission line was the first to be matched to the WEY brand model.
The Euler brand debuted as an independent brand at the 2018 Beijing Auto Show, as a pure electric vehicle brand under Great Wall Motor, the Euler brand initially launched two models, iQ and R1. But the name "Euler" appeared in Great Wall Motor's product library as early as 2013, when at the Shanghai Auto Show, Great Wall Motor showed a zero-emission electric eco-friendly car called "Euler".
The tank brand is the youngest brand of Great Wall Motors and an important achievement of Great Wall Motors' category innovation. At the end of 2020, the Tank 300 hanging the WEY brand LOGO was listed, and it quickly became popular in the off-road SUV market after listing. During the Shanghai Auto Show the following year, the tank brand independently became the fifth largest vehicle brand of Great Wall Motors.
Great Wall pickup trucks have accompanied the development of Great Wall Motors for more than 30 years, from the initial Fengjun, Sai Ling, Deere to the Great Wall Cannon, pickup truck products will help Great Wall Motors gain a firm foothold in the automotive market, but also affected by policies, market changes and other factors, and gradually weaken in the Great Wall product system. The launch of the Great Wall Cannon has brought the Great Wall pickup truck back to the public's vision, and opened up the segment of passenger pickup trucks, "making pickup trucks popular".
From the beginning of the Great Wall brand to the Haval brand to the current five major vehicle brands, Great Wall Motors has become increasingly prosperous, and its annual sales have climbed from 363,500 units in 2010 to 1.281 million units in 2021.
In the long history of the development of China's automobile industry, 2016 is the first year of the upward brand of Chinese brand automobile enterprises. This year, Geely Automobile launched the high-end brand Lynk & Co, and Great Wall Motors launched the WEY brand, setting off a wave of High-end brands launched by Chinese brand car companies.
Wei Pai, who was born with a golden spoon, did not develop as quickly as Wei Jianjun imagined, and the high opening and low walking can well summarize the development of the early Wei Pai. In the early days of Weipai's establishment, Great Wall Motors equipped it with a luxurious team, having served as CEO of Weipai for 30 years as Jens Steingr ber, and former BMW designer Pierre Leclerq as vice president and design director of Great Wall Motors, planning a complete design development direction for Weipai.
In 2017, the first year of the establishment of Weipai, the monthly sales of VV7 and VV5 models exceeded 10,000 units, and handed over a good result of 86,400 vehicles for the whole year. However, the development of Weipai was not recognized by Wei Jianjun, and at the first anniversary of Weipai, Wei Jianjun criticized the wait-and-see attitude of dealer investors, and publicly accused dealer investors who chose to wait and see instead of effectively promoting the construction of outlets in the early stage as "not interesting enough, living up to the expectations and trust of the Great Wall".
In the early days, Weipai's independent channel construction was the best of the original dealer system of Great Wall Motors, and encouraged dealers to become the general agent of the city. The construction of independent channels did not meet expectations, and during the first anniversary of the brand release, there were less than 70 dealer 4S stores, which did not reach the layout plan of 200 4S stores in the early days of Weipai.
At the same time, weipai has also set up an independent channel network from the original dealer system. In the case of exactly the same 4S store investors, the "neighbor" store building model was born, and Weipai's 4S store was often built next to Haval's 4S store, although this channel construction helped Weipai's sales to climb rapidly, but to a certain extent, it affected the overall sales performance of Great Wall Motors.
Taking sales in 2017 as an example, Haval brand sales have declined significantly, the main model Haval H6 has been declining for ten consecutive months since March, and the cumulative sales of the whole year have fallen by 12.79% year-on-year to 506,400 units, while the Total Sales of Great Wall Motor's SUV product matrix for the whole year has been 938,300 units, a slight increase of 0.03% over the same period last year, and the sales of WEY brands have filled the decline in Haval brand sales.
After two years of rapid development, Weipai began to decline. In November 2017, after the two products of Wei brand broke through 10,000 vehicles for the first time, the momentum of monthly sales of bicycles exceeded 10,000 vehicles was maintained for only 3 months, starting from April 2018, the monthly sales of VV7 and VV5 models hovered around 5,000 vehicles, and the cumulative sales of 100,000 vehicles in 2019, down 28.28% year-on-year, and its first new energy vehicle P8 was almost discontinued, with cumulative sales of only 644 vehicles in the whole year. By 2020, Weipai sales fell further, with cumulative sales of only 78,500 vehicles in the whole year, down 21.53% year-on-year.
The decline for two consecutive years is not only because of the negative growth of the overall automobile market, but also because of the slow iteration of Weipai products. In terms of products, after Pierre left Great Wall Motors, Weipai's products faced a "replacement" crisis. At the same time, there is no obvious competition gap between the VV5, VV6 and VV7 models, and the internal consumption is very serious.
In fact, Wei Brand still has not changed the problem of similar products. At the beginning of 2021, Weipai opened the brand renewal, relying on coffee intelligence and lemon hybrid to transform into a new generation of intelligent cars, and successively launched three new models of mocha, latte and macchiato. However, after the brand woke up, Wei brand still did not avoid similar appearance and interior design, and the market feedback was not outstanding.
According to sales data, in 2021, Weipai's annual sales further declined, only completing a sales performance of 58,400 vehicles, down 25.65% from the same period last year, and in the first quarter of this year, Weipai's sales performance rebounded slightly, with cumulative sales of 14,300 vehicles, an increase of 22.34% year-on-year.
In the path of brand upward development, Great Wall Motors is not limited to Weipai, but also lays out salon zhixing for the high-end pure electric vehicle market. Different from the five brand matrices of Haval, Weipai, Euler, Tank and Great Wall Pickup Truck, Sharon Zhixing is a new independent operating automobile company newly incubated by Great Wall Motors.
At last year's Guangzhou Auto Show, Sharon Zhixing's first high-performance mech battle car mech dragon made its world debut and opened a limited pre-sale. The sharp appearance design of the mecha dragon and the price of 488,000 yuan are controversial, the alternative design is difficult to meet the aesthetic needs of the public, on the social platform, the design of the mecha dragon presents a polarizing trend, people who like it call it domestic "GT-R", and people who don't like it call it the ugliest car in the Great Wall.
Although it is worth praising that the 101 Mech Dragon global limited edition models sold out in 3 and a half hours, how the staying power of Sharon Zhixing may be marked with a question mark. According to the planning of Sharon Zhixing, the future product price range is within 400,000-800,000 yuan, which is far higher than the product price range of most new car-making forces, and is on par with mainstream luxury brand pure electric vehicle products.
It is undeniable that the appearance of the mecha dragon has made Sharon Zhixing widely known to consumers, but after the Guangzhou Auto Show, Sharon Zhixing seems to have disappeared into the automotive industry, with neither a public voice nor a follow-up product appearance, and even the Salon Automobile public account has not been tweeted for two months.
Whether the salon car aimed at the niche market is short-lived or accumulated is still difficult to judge, but what lies in front of the salon car is to establish a long-term profitable business model, after all, in the automotive market, niche brands are difficult to go long.
Overseas markets run through the development process of Great Wall Motors, and in 1997, Great Wall Motors exported pickup truck products to the Middle East, starting its journey to enter overseas. By 2006, Great Wall Motor's overseas market had expanded from a single Middle East region to 105 countries and regions. In 2021, Great Wall Motor's overseas market layout reached more than 170 countries and regions, nearly 700 overseas sales channels, and overseas market revenue reached 16.162 billion yuan, accounting for 11.85% of the total operating income.
Great Wall Motor's overseas market expansion presents a three-step approach. In the early days, Great Wall Motors mainly exported complete vehicles, and after signing purchases with overseas dealers, dealers imported complete vehicles for sale. As the export of complete vehicles cannot meet the needs of overseas markets, Great Wall Motor has added a KD trade model to the vehicle export model, dismantling the whole vehicle to be exported overseas, and then using overseas assembly plants for assembly. In 2011 alone, Great Wall Motor deployed four KD plant projects overseas, adding 73,000 units of overseas assembly capacity.
In 2019, the completion of Great Wall Motor's Tula plant in Russia marked the third stage of its overseas market layout, and the four major production processes of stamping, welding, painting and assembly at the Tula plant were the first full-process automobile manufacturing plant of Chinese automobile enterprises overseas. After the Tula plant, Great Wall Motors began to buy and build factories overseas. In early February 2020, Great Wall Motors signed an acquisition agreement with General Motors, and one year later, Great Wall Motors' Thailand Rayong plant in the Free Trade Zone of Rayong Province, Thailand, was officially put into operation, becoming Great Wall Motor's second overseas full-process vehicle manufacturing plant. At the same time, Great Wall Motors is also negotiating with General Motors to acquire its Tarigon plant in India.
In addition, Great Wall Motor has also acquired Mercedes-Benz's plant in Iracemapolis, São Paulo, Brazil, which was completed in January this year, and Great Wall Motor will carry out intelligent and digital transformation of the plant, which is expected to start operations in the second half of 2023.
From vehicle export to CDK (all-part assembly) to the layout of overseas vehicle plants, Great Wall Motor's overseas layout has gradually accelerated. However, the asset-heavy overseas vehicle factory model has a small room for reducing fault tolerance to a certain extent, and if there is an unfavorable situation in overseas markets, it is difficult to alleviate it in a short period of time.
Although the Russian-Ukrainian conflict in February this year did not affect Great Wall Motors, production and sales will continue as usual, but the ruble exchange rate fluctuated sharply, which will have a negative impact on Great Wall Motors' performance to a certain extent.
The large-scale construction of overseas production bases will affect the performance of Great Wall Motors to a certain extent. According to Auto-First, the investment in the Tula plant in Russia reached 500 million US dollars (about 3.186 billion yuan), the total investment in the Rayong plant in Thailand reached 218 million US dollars (about 1.389 billion euros), and the Irasemapolis plant will invest 11.5 billion yuan in the next decade. The investment in the three overseas factories reached 16 billion yuan, equivalent to a net profit of more than two years (Great Wall Motor's net profit in 2021 was 6.726 billion yuan).
A large number of overseas investments will affect great wall motor's liquidity and payment ability to a certain extent, especially at the moment when great wall motor's asset-liability ratio is constantly increasing. According to Great Wall Motor's annual report, the asset-liability ratio at the end of 2015 was only 46.62%, and by 2021, Great Wall Motor's end-of-period asset-liability ratio rose to 64.58%.
In June last year, Great Wall Motor released the 2025 strategy to achieve global annual sales of 4 million vehicles by 2025, of which 80% are new energy vehicles, with operating income of more than 600 billion yuan, and by 2023, Euler will achieve the first place in the new energy segment, with global sales of more than 1 million.
In 2021, Great Wall Motor's operating income was 136.405 billion yuan, and its cumulative sales for the whole year were 1.281 million units. From 1.281 million units to 4 million units, Great Wall Motors needs to maintain a year-on-year growth rate of at least 32.93% per year for the next four years. From 136.405 billion yuan to 600 billion yuan, Great Wall Motors needs to maintain a year-on-year growth rate of 44.82% per year.
As China's auto market enters the era of stock competition, Great Wall Motors' compound annual growth rate of 32.93% is difficult to achieve. At the same time, under the influence of environmental factors such as chip shortage and the impact of the epidemic, high-speed growth is even more difficult.
Looking at new energy, in 2021, the cumulative sales volume of the Euler brand in 2021 was 135,000 vehicles, and the sales of new energy models were 137,000 vehicles, ranking fourth in the new energy industry, and if it wants to be the first in the new energy market segment in 2023, the Euler brand needs to surpass Tesla, SAIC-GM-Wuling and BYD in two years.
To complete the sales of new energy models in 2025 accounted for 80%, which means that Great Wall Motor's new energy products will soar from 137,000 units in 2021 to 3.2 million units, with a compound annual growth rate of 119.84%.
In the face of the 2025 strategic goal, Great Wall Motors, which is in the throes of transformation, needs to adjust in time, grasp the industrial outlet, and make the goal a reality. (Some of the pictures are from the Internet)