Behind the bright annual report of Great Wall Motors is the dilemma of transforming the new energy market.
"What car did you buy?" ”
"What kind of car are you?" "Ora good cat, forgive the green color." ”
In recent years, the naming of new cars has always been a controversial point of public opinion for Great Wall Motors. However, in the midst of controversy, Great Wall Motors has bucked the current to achieve sales growth. In the first quarter of this year, Great Wall Motors sold 275,300 units, a year-on-year increase of 25.1%.
Looking at Great Wall Motor's 2023 annual report, the revenue of 173.212 billion yuan increased by 26.12% year-on-year, the annual sales of more than 1.23 million vehicles increased by 15.3% year-on-year, and the average income of a single vehicle hit a record high.
However, there is always a basin of cold water that will be poured on the head of Great Wall Motors. In 2023, the net profit attributable to the parent company of 7.021 billion yuan will decline by 15% year-on-year, the annual sales completion rate of new energy vehicles will only be 41%, and the sales of some brand models will decline.
Regarding Great Wall Motor's sales volume, financial report data, new energy vehicle product layout, and consumer complaints, Consumer Reports sent an interview letter to Great Wall Motor, but did not receive a reply by press time.
Great Wall Motors' problems may go far beyond coffee and big dogs.
Advertising is the "Great Wall" of the Great Wall
Revenue has increased sharply, the average income of a bicycle has reached a record high, but the net profit has declined, so in order to "roll" to win the business, where did Great Wall Motors spend its money? The problem may arise in advertising investment.
In 2023, Great Wall Motor's sales expenses will be 8.285 billion yuan, an increase of more than 2.4 billion yuan or 41% year-on-year. Among them, advertising and media service fees were close to 4.046 billion yuan, accounting for 48.8% of sales expenses, an increase of nearly 1 billion yuan compared with 2022. Great Wall Motor said that the increase in sales expenses in 2023 was mainly due to "increasing the introduction of new energy vehicles".
Part of Great Wall Motor's 2023 financial data (Source: Great Wall Motor's 2023 annual report)
Under the "bombardment" of advertising, the sales of Great Wall Motor's new energy models last year were 256,400, a year-on-year increase of 113.88%. However, Great Wall Motor's significant increase in advertising expenses due to the launch of new energy vehicles failed to translate into expected sales results. In 2023, Great Wall Motor's NEV sales will only be 41% of the annual NEV sales target.
At the same time, Great Wall Motor's sales expenses have exceeded R&D expenses. You must know that in 2022, Great Wall Motor's R&D expenses will be nearly 600 million yuan higher than its sales expenses, and that year will also be a blowout year for Great Wall Motor's new energy products.
Wei Jianjun attended the Xiaomi SU7 press conference (source: Weibo @魏建军)
In the face of high sales expenses, Great Wall Motors also began to try the marketing methods of new car-making forces, such as Li Bin, Li Xiang, He Xiaopeng, Lei Jun and other helmsmen personally went to the market, and Wei Jianjun also began to appear more in public market activities, striving to obtain more cost-effective traffic and attention.
However, in the "involution" of the Chinese auto market, advertising may be the "Great Wall" of Great Wall Motors for a long time.
Haval, just the "thigh" of the decline of the Great Wall
Looking at the dazzling sales data of Great Wall Motors, you think that the five major brands are competing on the same stage, but you don't know that it is Haval's one-man show.
Great Wall Motor's sales seem to be suffering from "Haval dependence". In the first quarter of this year, the Haval brand sold more than 157,800 vehicles, accounting for nearly 60% of the sales of all brands.
Looking at other brands, the tank brand sold 49,000 units in the first quarter of this year, accounting for 17.9% of the sales of all brands, while the sales of WEY and ORA accounted for only 3.5% and 5.5% respectively.
Great Wall Motor's sales data for the first quarter of 2024 (Source: Great Wall Motor's March 2024 production and sales report)
In addition to the absolute quantitative gap, the gap between the sales of Great Wall Motor's various brands is also widening. In the first quarter of this year, the sales of Haval, Tank and WEY brand all increased year-on-year. However, sales of Ora and Great Wall pickup trucks fell by 15.41% and 10.9%, respectively.
However, as the "thigh" of Great Wall Motors, Haval itself is also going downhill.
As the "national god car" in the era of fuel vehicles, Haval was once a veritable light of domestic production. For a long time, the Haval H6 has been the sales champion in the Chinese SUV market. However, the Haval H6 has become the epitome of Haval's decline.
Haval H6 (Source: Haval SUV official website)
According to the data of the passenger association, in the first four months of 2023, the monthly sales of the Haval H6 hovered between 14,000 and 16,000 units. From February 2022 to April 2023, the Haval H6 has failed to become the SUV sales champion for 15 consecutive months, and there are even 2 months of monthly sales of less than 15,000 units during this period. At present, in the sales data released by Great Wall Motors, the data of fuel vehicles are very "mysterious", which also reflects the decline in the sales performance of fuel vehicles represented by Haval.
In the face of this situation, Great Wall Motors did not sit still. First, the Haval First Love, which was priced lower than the Haval H6, was launched, but this model is currently discontinued. Later, Haval Chitu provided a gasoline-electric hybrid model, but the sales performance was mediocre.
Haval Thunder (Source: Haval SUV official website)
To this end, Great Wall Motors has established a new new energy product series for Haval, but Haval Thunder has been unfavorable, and in June last year, it took price reduction measures less than a month after it was listed.
Haval II Big Dog (Source: Haval SUV official website)
In addition, in addition to the Haval dog, there are many Haval SUV models, and they are all concentrated in the compact SUV camp, and the positioning and price of different models are very close, which aggravates the internal friction of the product, but also makes consumers do not know much about the difference between different models, which has a negative impact on Haval to maintain sales growth.
Therefore, although Haval is the "thigh" of the Great Wall, it is still unknown whether it can become the best footnote to the new energy transformation of Great Wall Motors in the era of electrification as a replacement for joint venture SUVs in the era of fuel vehicles.
Great Wall Motors can't just rely on Haval in Pingyang.
The problems of the Great Wall go far beyond coffee and big dogs
In fact, in the new energy transformation of traditional car companies, Great Wall Motors is not lagging behind.
At present, Great Wall's five major brands all have new energy models on sale, covering plug-in hybrid, gasoline-electric hybrid and pure electric models.
However, electrification is never easy.
In the era of fuel vehicles, the WEY brand, which has repeatedly created sales myths, has quickly fallen from the peak of sales since the beginning of the electrification transformation, and currently has only about 3,000 units sold per month. In the first quarter of this year, the cumulative sales of WEY brand were 9,608 vehicles, a year-on-year increase of more than 182%. However, this is based on the growth performance of only 3,403 units sold in the same period last year, and monthly sales of more than 5,000 units are still difficult for WEY brand.
In order to increase the sales of the Wei brand, Great Wall Motors also joined the "price war". However, since October last year, some car owners found that the Great Wall Wei brand dealers began to sell Blue Mountain models at a reduced price, so they asked Wei to fulfill the promise of insurance made at the launch of the new car, but Wei brand refused to provide compensation for the price difference on the grounds that "the official guide price has not fallen", and the first batch of Wei brand Blue Mountain owners became the "wronged head" who spent the highest price to buy a car.
The Wei brand is not competitive, and the other new energy brands of Great Wall Motors are also difficult brothers. In the first quarter of this year, Ora has failed to break 10,000 sales for three consecutive months, with an average monthly sales of only about 5,000 vehicles, and sales are concentrated in Ora Good Cat. As Great Wall Motor's only pure electric brand, the decline in ORA sales is undoubtedly the first blow on its new energy transformation path.
In addition to the Haval, tanks have also become the focus of Great Wall Motor's electrification. At present, the tank has launched a number of plug-in hybrid off-road SUVs equipped with the Hi4-T system, competing head-to-head with BYD's Formula Leopard. However, as a model in the subdivided field, coupled with the general price of more than 200,000 yuan, the future of new energy off-road vehicles is also full of uncertainties.
According to the data of Great Wall Motor's 2023 annual report, the sales volume of Great Wall Motor's models of more than 200,000 yuan last year was close to 225,800 units, accounting for less than 20%, and more than 200,000 yuan is the main price range of Great Wall Motor's new energy off-road vehicles.
In addition, in the process of transformation, Great Wall Motors has taken a lot of roads that seem unbelievable to the outside world.
For example, the much-criticized naming of new cars is almost synchronous with the advent of new energy vehicles. Haval's First Love, Haval Big Dog Chinese Pastoral Dog Edition, Wei Brand Coffee Series, and Ora Good Cat's "Forgive Green" color scheme...... These names confuse consumers and are incompatible with Great Wall Motor's long-standing hard-core SUV image.
Tank 700 Hi4-T (Source: Tank SUV official Weibo)
In addition, Great Wall Motors has also been complained and defended by consumers from time to time due to quality defects. "Consumer Reports" noticed that on platforms such as Cheqq.com, Haval Thunder MAX, Haval second-generation Big Dog New Energy, Tank 500 Energy and other models have a number of complaints about quality problems involving engines and motors.
Therefore, it is not comprehensive to blame the ups and downs of Great Wall Motors' performance in recent years on the strange new car naming. Product quality problems, "word games" in marketing, imperfect layout of new energy products, and repeated rumors of the departure of middle and high-level employees...... The problems that plague Great Wall Motors are varied.
Regarding Great Wall Motor's sales volume, financial report data, new energy vehicle product layout, and consumer complaints, Consumer Reports sent an interview letter to Great Wall Motor, but did not receive a reply by press time.
He didn't have the life of the train, but he got the disease of the train first. The future of Great Wall Motors is still a long road.