#2024北京国际车展#
Author / Avocado under the stars
Edit/Spinach's Starry Sky
Typesetting/Beef jerky under the stars
In the past two days, the auto show in Beijing has caused a vibration in the car circle. Today, unlike in the past, it is no longer the car model on the platform but the circle bosses. Among them, Great Wall Motor (601633) Wei Jianjun is once again in the same frame as Lei Jun.
Recently, these two bigwigs have interacted very frequently, sending cars, live streaming together, and watching exhibitions together. It can be seen that in addition to personal relationships, they may also learn from each other.
Secondly, according to the financial report: in the first quarter of 2024, Great Wall's revenue will be about 42.9 billion yuan, a year-on-year increase of about 47.6%, and its net profit will be 3.2 billion yuan, a year-on-year increase of 1,752.55%. Profits skyrocketed 17 times, which is a bit "explosive".
Source: Great Wall Motor's Q1 2024 financial report
The numbers are bursting, but behind them is not perfect.
First, fuel vehicles are the mainstay, and new energy is pulled
Great Wall Motors started with pickup trucks, and its current products cover four categories: SUVs, sedans, pickup trucks and MPVs, and it has five major brands: Haval, WEY, Ora, Great Wall pickup and tank.
According to the March production and sales report, in the first quarter of 2024, Great Wall Motor's total sales volume will be 275,000 units, up 25% year-on-year.
Source: Great Wall Motor's March 2024 production and sales report
At the same time, market news shows that in the first quarter of 2024, Changan Automobile (000625) will sell about 690,000 units, BYD (002594) will sell about 626,000 units, Chery Group will sell about 530,000 units, and Geely Automobile (00175) will sell about 476,000 units. Compared with other friends of the top five, although Great Wall has improved, its sales are still at the bottom.
Not only is the total sales volume at the bottom, but from the perspective of power structure, the Great Wall is obviously unbalanced.
In the first quarter of 2024, the cumulative sales of Great Wall new energy vehicles will be less than 60,000 units, accounting for about 20% (= new energy sales/total sales), which is relatively small.
As the new energy vehicle industry gradually moves towards a price war, low-price market grabbing has become the mainstream. Recently, the latest data on the auto market released by the Passenger Car Market Joint Branch of the China Automobile Dealers Association from April 1 to 14 shows that the wholesale and retail penetration rates of new energy vehicles in China have exceeded 50%. What is the concept? The official purchase of fuel vehicles has become a minority.
Under such a trend, the Great Wall, which is still supported by fuel vehicles, may not have much room for survival.
Second, the layout of new energy, get up early in the morning and catch up in the evening
So, is Great Wall Motors slow to deploy new energy?
As early as 2020, Great Wall released three major brands: Great Wall Tank, Lemon and Coffee Intelligence, which correspond to each other, and respectively. Judging from the development of the industry in the last three years, these three directions are correct.
In 2021, Great Wall also carried out a lot of analysis and dissemination of DHT hybrid technology. At that time, BYD's BYD Qin PLUS DM-i (new energy model) had just begun to gain momentum, and through various test drive experiences, the public was marketed to let the public understand how fuel-efficient plug-in hybrid can be, and at the same time, Geely and Changan were still going around in circles in the B circle. Great Wall Motors has successfully entered the C-end market through the ORA brand.
Market data shows that in 2021, the cumulative sales of Great Wall Ora will be more than 135,000 units. Whether it is from the product pricing (8-100,000 yuan) or from the product positioning of women, Euler is very competitive.
Source: Sino-Singapore Jingwei
However, in the same year, Great Wall Motors discontinued its so-called unprofitable black cats and white cats, and began to move to the 15-200,000 level market, giving up the 100,000 level market to friends.
Let's talk about BYD first.
Relying on BYD Qin (priced at less than 100,000 yuan) to open the market, BYD's sales have increased rapidly. Among them, 600,000 units will be sold in 2021, 1,863,500 units will be sold in 2022, and more than 3 million units will be sold in 2023.
Look at Geely and Chang'an again.
From 2021 to 2023, Geely's NEV sales increased from 100,000 to 490,000 units, while Changan's NEV sales increased from 100,000 to 480,000 units.
On the other hand, Great Wall Motors, in 2021, the sales volume of one brand of ORA has reached 140,000, and in 2023, the sales volume of the entire new energy will only be 260,000. Compared with its friends, the growth rate of Great Wall New Energy is obviously a bit stretched.
The idea of friends is to let consumers taste the sweetness first, and then slowly upgrade. However, at the same time as the Great Wall was upgraded, it obviously cut off its own retreat and customer acquisition channels. As a result, the new energy products of friends have achieved explosive growth, while the Great Wall has made a wrong step.
Third, it is easy to fall into a predicament if it is too subdivided
The data shows that in the past two years, the inventory turnover rate of Great Wall Motors has increased rapidly. It can be seen that in the face of the impact of new energy, the car is really difficult to sell.
Source: Straight Flush iFinD - Inventory turnover days
In order to break the game, Great Wall is conducting a set of combination punches.
1► Develop overseas markets
On April 9, the Passenger Car Association released data: in the first quarter of 2024, the cumulative retail sales of passenger cars will be 4.829 million units, a year-on-year increase of 13.1%. Exports totaled 1.063 million units, reflecting a 39% y/y increase. Great Wall Motor's export volume far exceeds the overall level of the industry. According to the data, in the first quarter of 2024, Great Wall Motor's overseas sales will reach 92,800 units, a year-on-year increase of 78.51%, and the sales volume will account for 33.7%, a year-on-year increase of 10.1%.
2► Product adjustments
In the first quarter of 2024, sales of tank brands doubled year-on-year. For the relatively low-priced Ora and Great Wall pickups, sales are declining at a rate of more than 10%.
Judging from market data, whether it is the tank 300 with high sales volume or the new energy series, the unit price is more than 200,000. The tank series has raised the price and profit margin of bicycles, and the market of more than 200,000 yuan has rushed up, which also shows that the high-end of the Great Wall has been successful.
However, sticking too much to one market segment will lead to internal friction. For example, the price of the two products, Haval Raptor and Haval Big Dog, is almost the same, although the appearance is slightly different, but the users are actually the same, then there will be product fights and limited growth.
3► Competition in market segments
From the point of view of the brand, Haval and Tank are the pillars of the Great Wall. In terms of market segments, Haval and tanks are mainly off-road. When the mainstream market is gone, will BYD and Changan and other big manufacturers focus on the off-road vehicle market? Moreover, there are already new forces, such as stone cars, have begun to lay out new energy off-road tracks. Once everyone is in the market, will the Great Wall be able to hold on to the profit it has from its only revenue?
Note: This article does not constitute any investment advice. The stock market is risky, and you need to be cautious when entering the market. There is no harm in buying and selling.