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Text | Zhang Jiadong Editor | Zhang Guangkai
On April 21,Officially released the financial report for the first quarter of 2023.
According to the financial report data, the total operating income of Great Wall Motor in the quarter totaled 29.038 billion yuan, down 13.63% year-on-year; The net profit attributable to shareholders of listed companies totaled 174 million yuan, a year-on-year decrease of 89.34%.
Great Wall Motor said in the financial report that the decline in profit was mainly due to the fact that it was still in the period of product structure adjustment during the reporting period and increased investment in new energy brand building and R&D under the rhythm of new product listing in 2023.
If the timeline is extended to the fourth quarter of last year, it is not difficult to find the bottleneck of the Great Wall-the new energy transformation problem. Although Euler, a pure electric brand, and Wei brand, which was revived after getting on the car with lemon hybrid technology last year, new energy vehicles are still a minority in the product system under the five brands of the Great Wall.
First of all, last year, due to the supply chain problems in the Euler brand, white cats and black cats in the entry-level market were streamlined, while good cats and ballet cats, which mainly focus on the boutique car market, could not bear more sales burdens in price positioning; Secondly, trying to inject Wei brand with three-speed DHT hybrid technology is limited by high price positioning and is still looking for its own breaking point.
Therefore, with the changing trend of China’s fuel vehicle market and new energy market, the Great Wall, which has fewer electric vehicles, finally faces the pressure of sales.
In the first quarter of this year, the total sales volume of Great Wall Motor was about 220,000 vehicles, a year-on-year decrease of 22.41%, creating the biggest decline of Great Wall in the market in recent years.
It is believed that the main reason for the decline in sales of Great Wall Motor is that the transformation of the main brand Haval is difficult to reverse the image of "national fuel SUV" in a short period of time, and Haval has failed to sell fuel vehicles and new energy products separately.
In addition, Wei Pai and Euler, who focus on the new energy market, can’t bear the heavy responsibility of the group’s more new energy sales growth under the original market positioning.
However, judging from the external reaction, the capital market has not responded strongly to the decline in profits of Great Wall Motor. As of the close of April 24, Great Wall Motor’s share price closed at 27.94 yuan, with an increase of 2.08% on that day.
The reason may stem from a series of reform measures that the Great Wall started from last year.
Transformation new energy
It is the same as the change from the inside out when the new forces move from ignorance to precipitation. Traditional car companies want to embrace new energy quickly, and the reform of organizational structure is also destined to go first.
Last year, Li Ruifeng, CGO (Chief Growth Officer) of Great Wall Motor, said in an interview: "There are too many categories of brands in Great Wall, and it was planned to incubate new brands. Now the market competition is so fierce that the original situation of entering a blue ocean market with brands can avoid competition, and now this market no longer exists."
To this end, Great Wall chose the corporate brand focusing on "One Great Wall".
In December last year, Great Wall first announced the integration of its vehicle brand marketing system, and adopted a dual-brand operation model for Wei brand and tank.
In March of this year, Euler and Salon brands also completed the integration immediately. In this way, a set of channels, 1.5 sets of organizations and 2 brands are formed.
Great Wall said that after the integration of the existing brands, the group will form a brand-new organization focusing on pure electricity, and at the same time, it will have a clearer positioning for each brand.
Before the Shanghai Auto Show, the Great Wall had initially completed the integration of the organizational structure, and in terms of brand positioning, the Great Wall chose to use technology to create a label.
In the first quarter of 2023, the R&D expenditure of Great Wall Motor was 1.534 billion yuan, an increase of 210 million yuan compared with 1.324 billion yuan in the fourth quarter of 2022. In addition, Great Wall Motor’s marketing expenses also increased by 403 million yuan.
In addition to the continuous improvement and boarding of technical platforms such as lemon mixing and coffee intelligence that have already landed before, Great Wall once again launched Hi4 intelligent four-wheel drive electric hybrid technology with Haval brand this year, expecting to bring personalized brand labels in the wave of new energy transformation.
These technological achievements have also been presented one by one at this year’s Shanghai Auto Show. During the two-day media day, the five brands of Great Wall, namely Haval, Weipai, Euler, Tank and Great Wall Gun, launched more than 15 intelligent new energy vehicles.
Among them, Haval Xiaolong MAX, the first model of the brand-new "Dragon Net" of Haval brand, was officially unveiled, and the vehicle was equipped with new Hi4 technology, focusing on the four-wheel drive "equal rights" in the era of intelligent electrification.
With the help of the blue mountain model, Wei Pai has created a high-end home positioning with the design of mixed DHT, space and comfort configuration. The MPV model Gaoshan, which appeared at the same venue, is also strengthening the product direction of Wei Pai since then.
Tanks and Great Wall Gun brands are respectively connected to the brand-new off-road hybrid architecture Hi4-T, thus further strengthening their advantages in market segments.
By focusing on the "women’s market" and reducing the price of new good cats and ballet cats, the Euler brand will enhance the competitiveness of their respective models in the market.
CITIC Securities said that the brand reorganization and team change of Great Wall Motor can concentrate superior resources and enhance the operational capability of enterprises.
In addition, the Haval brand officially announced in March that it would establish a brand-new and independent sales network for its new energy vehicles, and the new network was named Haval Dragon Network. Haval Xiaolong, which was unveiled at this auto show, is the first model of Longwang.
From the internal structure, to the blowout of new energy products, and then to the independent sub-network of new energy vehicles. The Great Wall’s series of actions since this year are undoubtedly showing its strong will to accelerate the transformation of electrification.
Pursue long-term?
At the recent press conferences of its brands, the Great Wall Association repeatedly mentioned a number "32 years", which is the historical accumulation of Great Wall Motor, and Great Wall also hopes to express its strategic strength and long-term thinking.
At this year’s Shanghai Auto Show, an insider of Great Wall Motor also expressed this view to the author.
He believes: "In the short term, the profit decline of Great Wall is certain. In addition to fully promoting the transformation of new energy, the five brands under Great Wall have also taken the initiative to take differentiated measures such as price protection and promotion, but both in technology accumulation and brand building, Great Wall has maintained a positive attitude towards the future."
On the whole, since the beginning of this year’s "price war", Haval H6 has a cash discount of 15,000 yuan; In 2023, the good cat offered a discount of 22,000 yuan, and the tank announced the annual insurance policy. A series of profit-making policies also showed the great wall’s vision of going all out to new energy sources on the premise of keeping the basic disk of fuel vehicles.
However, it should be pointed out that the sales pressure placed in front of the Great Wall has not been reduced.
After the integration of brand resources, Great Wall Motor also adjusted its sales target in 2023: the annual sales target was reduced to 1.6 million vehicles, the penetration rate of new energy vehicles was challenged by 40%, the overseas sales target was 250,000 vehicles, and the expected net profit was 6 billion yuan.
Now that the first quarter has passed, the target completion rate of Great Wall Motor is still far less than 1/4 of the adjusted target. In other words, after all the new products exhibited at the auto show went to the market, the challenges faced by Great Wall Motor have just begun.
From the objective environment, the transformation of the Great Wall has no first-Mover advantage in the current market. whenWhen the new forces have laid a brand-new marketing network into the streets, they have just decided how long it will take for the Great Wall to make up for the lessons left in the direct sales outlets, and it will still take time to observe.
At the same time, for the electrification transformation of the industry, the Great Wall is not only betting on the hybrid field, but also the full-field layout of pure electricity and hydrogen energy in parallel, which is obviously the long-term consideration of the Great Wall for new energy technologies.
However, from the current market environment and revenue pressure, how to make up for the profitability in the short and medium term by using the existing technology is also a problem that Great Wall needs to think about and solve as soon as possible.
