Wei Jianjun, the first year of the division was unfavorable

Text | Giant Tide WAVE, author | Old Fish, Editor | Yang Xuran

On June 28, 2021, Wei Jianjun, chairman of Great Wall Motor, put forward a vigorous five-year plan at the Great Wall Motor 2025 strategy conference: to achieve global annual sales of 4 million vehicles in 2025, of which 80% are new energy vehicles, with operating income of more than 600 billion yuan.

At that time, as soon as this plan came out, the industry questioned a lot.

By now, the first year of the five-year plan passed quickly. How was Wei Jianjun's grand blueprint completed?

In 2021, Great Wall Motor achieved operating income of 136.405 billion yuan, an increase of 32.04% year-on-year. Automobile sales of 1.28 million units, an increase of 15.24% year-on-year, new energy vehicle sales of less than 140,000 units, an increase of 137.29% year-on-year, accounting for less than 11%, basically did not complete the average growth rate.

The situation was even more dire in the first quarter of this year. All-brand sales totaled 283,500 units, down 16.32% from the same period last year. In the First Quarter of the Chinese brand passenger car market, Great Wall Motors was the only company in the top ten of The Chinese brand passenger car sales list to experience a double-digit decline.

The first year saw problems with growth, casting a shadow over the future of the Great Wall's five-year plan.

01 The veteran can't move

The external factor is the whole industry, and the internal factor is Great Wall Motor itself.

Haval is the crowning work of the Great Wall, as a banner of China's own brand, supporting half of the Great Wall. In 2021, haval brand sales of 770,000 vehicles, accounting for 60% of total sales, but only 2.64% year-on-year. Entering 2022, Haval continued to decline, with sales of 166,700 units in the first three months, down 55,900 units or 25.13% year-on-year.

The Haval H6, known as a generation of god cars in the Haval series, has been in an invincible state of "I want to fight ten" since its listing. According to owner's home data, since 108 months from 2013 to 2021, the Haval H6 has only been the first in sales in the same class for 7 months and has never fallen out of the top three.

But in the first three months of 2022, the Haval H6 has lost its top spot for two months, not only with sales of 71,400 units falling 35.7% year-on-year, but also falling out of the top three for the first time in March.

As the second-selling model of Great Wall Motors, it is also facing the dilemma of weak growth. Sales in 2021 were 233,000 units, up just 3.56% year-on-year. In the first three months of 2022, the sales volume of Great Wall pickup trucks was 59,400 units, down 27.68% year-on-year.

The sharp decline of fist products is not sudden, behind it is the intersection of internal and external factors.

At the same time, in the chip problem that has affected the automobile industry for more than a year, Great Wall Motors cannot be left alone, because the chip problem limits production, which in turn affects the sales of new cars.

The external factor is the whole industry, and the internal factor is Great Wall Motor itself.

The previous big sales of Haval and pickup trucks were based on the marketing success of ultra-high cost performance and atmospheric appearance, and the advantage in car quality was not obvious. So once there are other manufacturers doing better in these areas, the advantages can easily be reduced. For example, in recent years, Jiangling Motors, Zhengzhou Nissan, Jiangxi Isuzu, SAIC Maxus, etc. have increased their investment in pickup trucks to varying degrees, and their market share has risen to varying degrees, thus squeezing the market space of the Great Wall.

The SUV market, which has been caught in the Red Sea, has a harsher competitive environment than pickup trucks. Whether it is a fuel vehicle or a new energy vehicle, the models available for consumers to choose from have been very rich, far from the hot market environment of the Haval H6.

02 Young people can't fight yet

Who will take over the best-selling old car is still the biggest problem facing Wei Jianjun.

Harvard and pickup trucks are gradually entering the end of their life cycle, but they still dare not slacken off in the slightest, like a very hard-working middle-aged social animal.

Almost everyone of these junior brands has had a highlight moment. But it is difficult to "cut from the South Tianmen Gate to Penglai East Road like the predecessors, and the eyes are not blinked for three days and three nights" - still not enough to fight.

WeY, which Wei Jianjun had high hopes and bet on his last name, was a hit when it was first launched, with sales of 86,000 vehicles in 2017. In 2018, with the help of WEY VV6, the family product expanded, and the annual sales jumped to 139,000 vehicles, once becoming the "hope of the whole village" to take over the Haval H6.

However, since 2019, under the siege of competitors, WEY has ceased to be brave, and the sales of its models have fallen by 28.28% to 100,000 units across the board, and then down 21.53% to 78,500 units in 2020. In 2021, Wei Jianjun tried to use hybrid technology to empower WEY, but the effect was minimal.

The tank brand that is currently on fire, Tank 300, once exceeded 10,000 monthly sales after being listed at the end of 2020, and the supply exceeded demand. Although the first quarter suffered from a lack of cores, cumulative sales exceeded 25,000 units.

But the tank is targeting the off-road SUV segment, which, while popular, has limited overall capacity in the market. Some netizens sorted out the performance of such models in 2021, and the Tank 300 was far ahead with sales of 85,000 units, more than the sum of the next few head models. Some models even have sales of only 3,000+ to enter the list, which shows the narrowness of this track.

Therefore, even if the market share of tanks continues to increase, it will not be able to bring the Great Wall to the height of the Five-Year Plan. Just like the Toyota Prado, Jeep Commander, Wrangler and other models that are well known in the off-road SUV market in the past, the annual sales volume is basically less than 10,000. The current sales of tanks have been quite out of the circle, but the subsequent incremental encounter with the ceiling is also a high probability event.

Who will take over the best-selling old car is still the biggest problem facing Wei Jianjun.

03 There is not much time left for the Great Wall for new energy

Wei Jianjun officially raised new energy to a strategic height in the five-year plan, which is equivalent to admitting his own error of judgment.

Wei Jianjun was supposed to use new energy to solve the growth problem in the five-year plan. This is not difficult to see from the declaration of "80% of new energy vehicles" in the plan.

2021 can be said to be a year of new energy vehicle explosion. According to the China Automobile Association, the production and sales of new energy vehicles in 2021 reached 3.545 million units and 3.521 million units, respectively, an increase of 160% year-on-year, and the market share reached 13.4%, 8 percentage points higher than in 2020.

However, until the net profit of Great Wall Motors exceeded 10 billion yuan in 2016, Wei Jianjun still said, "Now is not a good time to get on electric vehicles, and Great Wall only does followers of the new energy industry." "It was not until 2018 that the Great Wall tentatively launched the real electric brand Euler.

In 2021, seeing the new energy vehicles in full swing, Wei Jianjun officially raised new energy to a strategic height in the five-year plan, which is equivalent to admitting his own judgment error. In 2021, Great Wall Motor sold 1.28 million units, of which only 139,000 were new energy vehicles, an increase of 137.29% year-on-year on the basis of a low base, but the overall proportion was less than 11%.

Compared with other civil construction car giants, Great Wall Motors is more than half a position behind.

Under the general trend of industrial development, BYD exceeded 600,000 new energy vehicles in 2021, an increase of 218.30% year-on-year, achieving the first domestic sales of new energy vehicles for 9 consecutive years. In the first quarter of 2022, BYD's cumulative sales of new energy vehicles in the first quarter were 280,000 units, an increase of 421% year-on-year. In terms of sales of new energy vehicles, BYD's advantage over Great Wall Motors is not too much to describe it as crushing.

The reason is that in terms of strategic attention, BYD is more decisive. In addition to historical decisions, the latest example is BYD's discontinuation of fuel vehicles in order to make way for new energy sources.

In the first quarter, Great Wall Motor's sales of new energy vehicles were only 34,000 units, an increase of 11.4% year-on-year. Compared with the growth rate of several times the same action, this number is really unbearable.

To this end, Wei Jianjun also deployed the salon brand, ambitious to become "the world's first hydrogen and electric dual-energy luxury brand". The Salon brand not only adopts the internationally rare hydrogen-electric dual energy technology, but also gets involved in the field of cars that the Great Wall has abandoned for many years.

Although the ambition is ambitious, the maturity of hydrogen energy technology is still unknown. Even if the technology is mature, consumer acceptance is not necessarily mature. For the current Great Wall, this is probably a distant water that cannot quench the thirst of the near.

So four years later, what Wei Jianjun took to complete the "80% of the new energy vehicle proportion" commitment is still a mystery that cannot be answered.

04 Epilogue

Today, Wei Jianjun's dilemma is that the five-year plan is too beautiful, but the reality of the first year is somewhat bone-chilling. In order to achieve the goal of being too large, Great Wall Motors is investing a lot of operating costs and innovation costs.

When these investments cannot be fed back into performance in time, the cruelty of the numbers is manifested.

The decline in profits began in the same quarter that the five-year plan was formally proposed.

Just a year before the release of the five-year plan, Wei Jianjun was still using the "life hanging on the line" to speculate on the company's past and future, reflecting on whether Great Wall Motors could "survive" the next year.

Obviously, the five-year plan is a change after Wei Jianjun observed his own company. But from thinking about whether he can survive to quickly transforming into extraordinary development, is Wei Jianjun's change of mentality too drastic? Is this foresight or blind optimism, strategic or gamblers? We can't ignore and deny the possibility of a successful entrepreneur working wonders, but at least the performance of the first year of his five-year plan can be said to be quite unsmooth.