Great Wall Motor, "life hangs by a thread"?

The Great Wall has been pushed to the edge of a cliff.

1、

In a word

In July 2020, in Great Wall Motor's 30th anniversary promotional video, Wei Jianjun, chairman of Great Wall Motor, said, "What will the future hold for Great Wall Motor? In my opinion, life hangs in the balance. ”

At that time, Great Wall Motor was in full swing, and in 2020, Great Wall exceeded its sales quota to a record high, reaching 1.11 million units.

According to official information, since its launch in 2011, the Haval H6 has won the SUV sales championship for 100 months, with cumulative sales of more than 3.6 million units in ten years, becoming the world's first Chinese model with cumulative sales exceeding 3 million.

However, it is understood that in the 100th month, Tesla Model Y ended the myth of the Haval H6.

Looking back now, the myth of Great Wall Motor being pierced by Tesla seems to have been foreshadowed for a long time, and in the promotional video of Great Wall Motor's 30th anniversary, the words that originally wanted to convey a sense of crisis seem to have become a rumor.

In February 2023, Great Wall Motor released its 2022 performance report.

Data show that Great Wall Motor's total sales in 2022 will be 1.067 million units, a year-on-year decrease of 16.7%, and the sales achievement rate is only 56.19%.

During the same period, SAIC, GAC, Geely Automobile, and Chery Group sold 5,305,000 units, 2,433,800 units, 1,433,000 units, and 1,232,700 units, respectively.

BYD also came to 1.87 million vehicles after changing lanes in an all-round way.

If it's just a decline in total sales, it's good that other sub-brands buck the trend, but the problem is that sub-brands are difficult to give new stories.

Among them, Great Wall Motor's sales leader Haval fell 20% from 938,000 units in 2016 and only sold 617,000 units in 2022; Haval H6 sold only 288,000 units throughout the year, down 18.9% year-on-year, and from 33,000 monthly sales at the beginning of the year to 16,000 units at the end of the year, the downward trend is obvious.

The new energy vehicle brand is even more difficult to say, with a total annual sales of only 131,800 units, of which 103,900 are Ora.

Wei Pai, who was pinned on high hopes, not only gambled on the surname of his boss, but also exchanged the "landing ship" with BYD, and as a result, the sales volume in the first two months of this year were 1056 and 1072 units, respectively, a cumulative year-on-year decline of 77.67%; Ora's sales, which mainly focus on women, also saw a decline of more than 20%.

In addition to the decline in sales, the 2022 performance report also shows Great Wall Motor's revenue.

According to the report, Great Wall Motor's annual revenue was 137.351 billion yuan, a year-on-year increase of 0.69%; The net profit attributable to the parent was 8.279 billion yuan, a year-on-year increase of 23.09%.

The increase in net profit attributable to the parent is actually due to the fact that Great Wall cut some low-priced models, so as to achieve an increase in bicycle profits from another angle, which also improves the company's net profit growth, but it is reflected in the annual revenue, which is slightly weak.

A comparison shows that BYD's net profit in 2022 will increase by 425.42%-458.26% year-on-year.

With the spread of this year's price war, Hubei government and enterprise subsidies have helped fuel vehicles to promote, and Great Wall Motor's survival situation in 2023 is only afraid that it will be more difficult.

Reflected in the stock price, it has fallen from a high of 69.73 yuan in 2021 to less than 30 yuan today, and the total market value has fallen from more than 600 billion yuan to 221.7 billion yuan now. It's not just a chop.

The stock price reflects expectations, and it is clear that the capital market's forecast for Great Wall Motor's future prospects has also been lowered.

In this regard, according to incomplete statistics, Great Wall Motor has repurchased 630 million shares of its own shares in the past year. Among them, a total of about HK$6.22 billion was spent to repurchase 589 million H shares, and a total cost of about RMB822 million was spent to repurchase 28 million A shares.

Although Great Wall Motor has tried to stabilize investor confidence by buying back its own shares, it has not seen much improvement so far, and even since the beginning of March this year, it has shown a downward trend.

So how did Great Wall Motors get to this point?

2、

Or "sold expensive"

Don't sell it, let's briefly summarize the reason.

One is the confusion of the product line and internal organization;

Second, the shortcomings of cost control;

The third is a misjudgment of the trend of new energy.

Reflected in the terminal, from the consumer's point of view, it is still "expensive".

The first point is the confusion of the product line and internal organization, which is almost all rotten.

Great Wall Motor, which once chose the "all in" SUV, later chose to walk on multiple legs.

Its product lines include traditional SUV (Haval), off-road SUV (tank), pickup truck (Great Wall Cannon), intelligent electric vehicle (Wei brand), high-end hydrogen-electric dual-energy vehicle (salon), pure electric vehicle (Ora), sedan (Yuanmeng).

There are many different models under one product line.

Haval's first love, Red Rabbit, Divine Beast, Big Dog, Cool Dog;

Euler's Good Cat, White Cat, Black Cat, Lightning Cat, Ballet Cat, Punk Cat, Cherry Cat;

the Great Wall's mountain and sea cannons, Great Wall cannons, and King Kong cannons;

Wei Pai's macchiato, latte, mocha, Blue Mountain...

In addition to the deeply criticized naming style, this kind of product system planning not only weakens the recognition of individual brands, dazzles consumers, but more importantly, consumes the communication resources of enterprises and increases the cost of parts industrialization.

And the Great Wall is still stopping production and restarting, and come again under a different name.

For example, Euler relies on black cats and white cats to make a certain reputation, but with the superposition of factors such as core shortage, rising material costs, and declining subsidies, the cost of car manufacturing has gradually risen. Great Wall abandoned low-priced models such as black cats and white cats and launched new cars such as lightning cats and ballet cats, but unfortunately the market acceptance was not high.

All of this comes with a lot of wasted costs.

The internal organizational chaos is reflected in the frequent personnel changes of the Great Wall.

It is understood that the longest term of office among Great Wall Motor's foreign executives is no more than 4 years, and most of the early Liu Yan, Liu Zhifeng, Ning Shuyong, Wen Fei, etc. have left Great Wall after serving for a period of time.

After Wenfei successfully rejuvenated the Haval brand, he was arranged to the salon brand, but since the merger of the salon brand with Ola last year, its status within the enterprise has plummeted; Yu Fei created Euler, which is more popular with women, and is said to have switched to the blueprint after being marginalized.

Last year, Wang Fengying, a car celebrity who had worked for the Great Wall for three decades, also left the Great Wall.

Regardless of whether there is another hidden situation within the Great Wall, frequent changes in senior management often bring about frequent changes in direction and strategy, everyone wants to make some big moves, and most of them do it for a short time, which hurts not only the continuity of the brand, but also the cost burden is aggravated and the previous work results are wasted to a certain extent.

This also exposes the shortcomings of Great Wall Motor's cost control, that is, the second point.

The myth of Haval's sales is partly due to the fact that Wei Jianjun captured the gap in the domestic low-cost SUV model market, and used the differentiated competition in the market segment to achieve corner overtaking.

Great Wall actually just bypassed the price competition of other models, with the rise of various costs in 2022, Great Wall Motor gradually cut the business lines of low-priced models such as black cat and white cat, and also tilted Haval's resources to Weipai, trying to complete high-end, but in 2022, Weipai only sold 40,000 vehicles, down 38% year-on-year.

The high-end promotion is not smooth, and the low-price market has been lost, and the Great Wall now seems to have fallen into an embarrassing situation where high is not low.

Behind this is the shortcomings of Great Wall's cost control ability.

Weipai's mid-to-high-end SUVs are all over Tesla Model Y, Qianjie, Ideal and other popular models. In particular, after two rounds of price reductions, Tesla Model Y came to the price range of 200,000 yuan to 300,000 yuan, with a maximum decrease of nearly 90,000 yuan.

At present, I have not heard the news that Wei Pai is going to reduce the price, but if it really falls, even if it is sold, with the cost control ability of the Great Wall, I am afraid that it is also a loss transaction, but if the price is not reduced, others sell one more, you will sell one less, and when the inventory accumulates, the cost is still your own.

Finally, Great Wall's misjudgment of new energy trends.

Wei Jianjun once firmly stated that "the Great Wall will only be a follower of new energy".

On the one hand, Great Wall has achieved considerable advantages in fuel vehicles in the past, and to change new energy sources, it is necessary to give up the originally relatively moist fuel vehicle business to a considerable extent, which is obviously not easy.

On the other hand, at that time, Wei Jianjun was more inclined to the hydrogen energy industry than the field of electric vehicles, which was seriously fraudulent, and invested a lot of resources.

However, from the current point of view, the commercialization of hydrogen energy has not given better prospects than electric vehicles, and manufacturers such as Nissan and Mercedes-Benz's parent company Daimler have also announced their withdrawal from the hydrogen fuel cell passenger car research and development plan.

The Great Wall, which bet on the wrong track, wants to transform and rejoin the competition, and its pricing is no longer dominant.

According to 36Kr, Mu Feng, president of Great Wall Motor, said, "We want to abandon the original cost pricing strategy, and this year's new approach is to return to the mainstream price range, and the price will be based on market pricing, not cost pricing." ”

From this paragraph, Great Wall's next pricing may still return to the mainstream price range in the market, but with the cost control advantages of car companies such as Tesla and BYD, Great Wall is afraid that it will not get much benefit.

3、

"Death also requires change"

To some extent, the Great Wall has both certain technological accumulation and corresponding industrial chain strength, but it will play a good hand.

In terms of the number of patents, Great Wall Motor has 1,301 patents published and 914 authorized, ranking first among Chinese car companies.

Whether it is the 4B15 engine and 4C20B engine that were once well-known in the fuel vehicle market, or the core three-electric technology, or the self-developed lemon hybrid DHT technology, etc., Great Wall's technical strength can withstand the test of the market to some extent.

A series of auto parts systems such as Hive Yichuang, Mander Electronics, and Seiko Automobile built around the automotive industry chain, that is, the "forest ecosystem", are still quite competitive in the market. It is understood that the installed capacity of Hive Energy has ranked among the top ten in the industry.

Great Wall is undoubtedly a behemoth, even if compared with SAIC's 165.7 billion yuan market value, GAC Group's 112.1 billion yuan market value, ideal 179.8 billion Hong Kong dollars (about 157.8 billion yuan) market value and other car companies over 100 billion yuan, Great Wall Motor's 221.6 billion yuan market value, in the domestic car companies, is second only to BYD.

To give an inappropriate example, even if the Great Wall sells assets at a low price, it is a skinny camel bigger than a horse.

But the ship is difficult to turn around, and the former crown of glory may now become an unbearable burden.

Wei Jianjun once said, "Death also requires change, if you do not change, you have to die, and you will not hesitate to die." ”

As Tesla and BYD continue to increase the price war, Hubei government and enterprises have joined hands to set off a tide of price reductions, and the Chinese auto market pattern has gradually accelerated its reshuffle.

In addition, according to Combustion Dimension, "China VI B", known as the most stringent emission standard, was rumored to come into effect on July 1 this year. Many industry insiders expect that from March to June before July 1 this year, the price war between car companies and dealers will only intensify.

The article also mentioned that a car company insider said, "This price war is not a zero-sum game, this is a negative-sum game, and it is a 'self-harming' price reduction." ”

Nowadays, whether it is homogeneous and the same price, or homogeneous and low-priced products, it is difficult to continue to find a suitable landing point in the market. In front of the Great Wall, it may be to find a market segment that can differentiate the competition, and then play a cost advantage.

However, the market will not wait for anyone.

To borrow Wei Jianjun's soul question on the 30th anniversary of Great Wall Motor, "Great Wall Motor, will it survive next year?" ”