Dialogue with Mu Feng, President of Great Wall Motors: When cars go to sea, the incremental market is the biggest certainty

Mu Feng, President of Great Wall Motors, picture from: Great Wall Motors

At this year's Beijing Auto Show, Great Wall Motors did not set up separate booths for each sub-brand, but gathered its five major brands, including Haval, WEY brand, tank, Ora and Great Wall pickup, at the Great Wall Motor's booth. This is the first time since the previous auto shows.

Why is it this year? According to a relevant person from Great Wall Motors, on the one hand, Great Wall Motors wants to show the system capabilities of a "Great Wall" at this auto show. On the other hand, Great Wall Motors invited nearly 1,000 overseas dealers to this auto show, which is conducive to foreign guests to have a comprehensive understanding of Great Wall Motors.

Mu Feng, President of Great Wall Motors, told Titanium Media App that the electrification and intelligent revolution have completely reshaped the brand pattern and market pattern that have been stable for decades. After this round of revolution, Great Wall Motors should seek a better brand status by virtue of its system advantages. "Now we need to pursue a quality market share to ensure that we can go to that future."

Regarding Great Wall Motor's overseas strategy, Mu Feng said that Great Wall Motors will definitely be based on China's origin market, aiming at the second type of market centered on the European Union, and focusing on the third type of market (the market of the leading country). The main strategy is to go to sea ecologically, rather than the previous trade to go to sea, and pursue long-term sustainable development. "We still have to go both long and steady." It is reported that by 2023, Great Wall Motor's goal is to achieve overseas sales of more than one million units, and high-end models account for more than 1/3 of sales.

Data shows that in the first quarter of this year, Great Wall Motors handed over the strongest first-quarter financial report in history. The operating income in the first quarter was 42.86 billion yuan, a year-on-year increase of 47.60%, and the net profit was 3.228 billion yuan, a year-on-year increase of 1752.55%. In terms of sales, the cumulative sales in the first quarter were 275,000 units, a year-on-year increase of 25%. Among them, overseas sales were 92,800 units, a year-on-year increase of 78.51%, accounting for 33.75%; The sales volume of new energy vehicles was 59,200, a year-on-year increase of 112.82%, accounting for 21.53%.

It can be seen that in the first quarter, the growth rate of revenue and net profit of Great Wall Motors was significantly higher than the growth rate of sales.

Deal with involution: we must pursue a high-quality market share

The growth rate of net profit in the first quarter was significantly higher than the growth rate of sales, mainly because Great Wall Motor's attitude towards involution was different from others.

Mu Feng said that he can't just look at the volume and talk about the volume, he needs to see what is the essence of the volume under the water surface. In fact, the essence is a change - a change of electrification and intelligence. This change has completely shattered the brand pattern and market structure, and now no brand dares to say that there is a solid brand premium.

"If we only look at the volume, and don't look at what the underlying logic is, then let's follow the volume together, basically there is no future, which is why we have been talking about long-termism and valueism last year." Mu Feng said to the Titanium Media App.

Mu Feng further said that at present, Great Wall Motors should pursue a high-quality market share to ensure that it can go to the expected future.

From the perspective of specific measures, Great Wall Motors should strive to do user experience and adhere to the route of category segmentation innovation.

When the brand pattern and market pattern have been broken, what will be used to reconstruct the future brand pattern and market pattern? In Mu Feng's view, it depends on product experience.

It is reported that Great Wall Motors has proposed internally that it must make products that are supported by science and technology based on user scenario-based experience as king. The Wei brand Blue Mountain Coffee OS3.0 system unveiled at this auto show and the city NOA live broadcast held by Wei Jianjun, chairman of the Great Wall not long ago, are all based on the logic that experience is king.

Great Wall Motors relies on category innovation to make brands and models suitable for consumers, so as to maintain a certain level of operation. It can also be seen from the financial performance in the first quarter that Great Wall Motor's insistence on category innovation, category differentiation, and category brand effects have begun to appear.

Embrace traffic, but it's not all traffic-driven

In addition to the product level, at the marketing level, it is also obvious that Great Wall Motors has begun to undergo some changes in the first half of this year.

The Xiaomi car brought by Rebus has directly upgraded the competitive dimension of the automotive industry. In this regard, Mu Feng pointed out that the transformation of electrification and intelligence has objectively lowered the entry threshold of the automobile industry. In the past, the automobile industry talked about three major parts, and the three major parts of automobiles were core technologies. Now after electrification, the motor or we call the motor drive, gearbox, the development difficulty of this technology, the technical threshold is far lower than that of traditional engines and traditional gearboxes.

"When the barrier to entry is lowered, more people will enter the market and compete. In a sense, the price war is one of the most conducive ways to increase volume, but this way is not sustainable, and after a long time, it may be a disaster for both enterprises and industries. Mu Feng said.

For example, he said that from the annual report in 2023 and the first quarter report in 2024, the losses of some companies can be seen. He believes that under such disorderly competition, there will definitely be some companies that can't hold on, and when he falls, the most hurtful thing is the industrial ecology and consumers that we have built up with great difficulty.

"The pursuit of steady, orderly and healthy operation enables us to go further, which is a true reflection of the Great Wall's responsible attitude towards our country's industrial ecology and consumers." Mu Feng said.

For the phenomenon that mobile phone brands are now entering the automotive industry, which makes the car circle generally permeated with traffic anxiety, Mu Feng said that the logic of e-commerce and the development of e-commerce are unstoppable. This means that automobile companies must not only carry out technological and industrial changes, but also carry out changes in the marketing system.

Mu Feng pointed out that it is undeniable that the way we receive information has completely changed, and this is not based on the will of the Great Wall, so the Great Wall must actively embrace this change, which is unavoidable by the Great Wall Motors.

"But that's only in the field of communication. It's not going to be like this for the whole business. We still insist that product experience is king, that is, product is king, and marketing is just an escort. Great Wall Motors must actively embrace this marketing change, not only to adapt, but also to strive to integrate into this change. But at the same time, Great Wall will still adhere to its 34-year-old car-making philosophy - integrity to build cars. Mu Feng said.

Going global: The incremental market is the greatest certainty

Talking about the current wave of Chinese auto brands going overseas, Mu Feng said that the overall market situation of Chinese cars going overseas in this round is still very different from that of ten years ago. First of all, from the perspective of the market, since China entered the stock market in 2018, the world's five major markets - China, the United States, Europe, Japan and South Korea, occupy more than 67% of the global market are stock markets, and the remaining more than 33% of the markets in more than 190 countries and regions belong to the incremental market.

"To do strategy is to find the greatest certainty in the uncertain future, and the incremental market is the greatest certainty." Mu Feng said. Great Wall Motor's approach to this is that since last year, the remaining 33% of the incremental market has been re-graded, taking the leading countries as three types of markets and the marginal countries as four types of markets, focusing on the leading countries and radiating the marginal markets.

The second change in going to sea is that it used to be completely trade-based, but now this may not work. Mu Feng said that since last year, Great Wall Motors began to go to sea ecologically - service first.

"We build services first, not to pursue some volume and performance in the current period. Service first, we want to really face local consumers, we must serve first, and the derivative ecology around the whole car, for the derivative ecology of the industry, so we call it ecological going to sea, which is a strategic going to sea. Mu Feng said.

The third change is that production and sales may become a trend of going overseas. Mu Feng said, "the origin of sales has always been a topic that we can't avoid, we must put our cars to the sea, into our industrial chain also to go to sea, we not only want to create value for Chinese cars, but also to the local government and local consumers to create social value, so that it is a long-term sustainable development process." ”

To sum up, Great Wall's strategy to go overseas is to base itself on China, the origin market, aim at the second type market centered on the EU, and focus on the third type of market (the market of the leading country). The way to "go global" is to go to sea ecologically, because it is necessary to assume its own social responsibility.

"We still have to go both long and steady." Mu Feng finally concluded. (This article was first published in Titanium Media App, author|Wang Ruihao, editor|Zhang Min)