AutoBeta(AutoBeta.net)02/03 Report--

On the evening of February 2, Great Wall Automobile Co., Ltd. (hereinafter referred to as "Great Wall Motor") released its 2022 results, KuaiBao. According to the report, the total revenue of Great Wall Motor in 2022 was 137.351 billion yuan, up 0.69 percent from 136.405 billion yuan in the same period in 2021; the operating profit was 8.009 billion yuan, up 25.75 percent from the same period last year; the net profit attributable to shareholders was 8.279 billion yuan, up 23.09 percent from 6.726 billion yuan in the same period in 2021; as of the end of December 2022, Great Wall Motor had total assets of 185.343 billion yuan and total liabilities of 1201.19 billion yuan.

Great Wall Motor said that the year-on-year increase in net profit attributable to the Company's shareholders during the reporting period was mainly due to the company's increased production capacity, increased profitability of its models, and increased exchange rate earnings.

Despite the growth in revenue and profits, Great Wall did not have a good time in 2022. Total sales of Great Wall cars in 2022 were 1.0675 million, down 16.67 per cent from a year earlier, according to official figures. It is understood that Great Wall has maintained a record annual sales of 1 million for six consecutive years, but Great Wall set an annual target of 1.9 million vehicles at the beginning of the year, while the actual annual sales were only 1.0675 million, with a target completion rate of only 56.18%.

Great Wall car sales are in decline, which is related to the performance of its brands. According to data released by Great Wall Motors, the total sales of Great Wall pickup trucks, Harvard and Wei Brand were 186700, 616600 and 36400 respectively last year, down 19.87%, 19.92% and 37.24% respectively from the same period last year. Only the tank brand achieved growth. The brand sold 123900 new cars in 2022, an increase of 45.76% over the same period last year.

While fuel vehicles are almost routed, the performance of new energy vehicle brands is not optimistic. As we all know, Euler, a new energy vehicle brand launched by Great Wall in 2018, took feminine models as a key label at the beginning of its establishment, and both the name and appearance of its models well catered to the preferences of some female consumers. However, due to the trend of profits, Euler suddenly stopped selling black cat and white cat models in early 2022, both of which sold for less than 100000 yuan, especially black cats, which are almost responsible for Euler's sales. As a result, after Euler stopped selling black and white cats, there was only one model left for sale, resulting in Euler's sales continued to be lower than the same period. Later, Euler launched two models priced at 15-200000 yuan, ballet cats and Lightning Cats. Although the profit has improved, but the contribution to sales is not high. Data show that Euler sales of 104000 vehicles in 2022, down 22.96% from the same period last year, second only to Wei Brand.

After years of development, Great Wall Motor owns six major brands: Harvard, Wei Brand, Euler, Tank, Salon and Great Wall pickup truck. With the exception of tanks, the sales performance of other brands is in decline in 2022. It can be seen that the multi-brand development strategy upheld by Great Wall does not work well. The reason is not only the epidemic situation and the influence of spare parts supply, but also related to the product structure and marketing mode of Great Wall Motor.

In the face of this fact, Great Wall made the decision to integrate the brand in December 2022. The two major brands of Euler and Salon were fully integrated, and the salon brand CEO Wenfei served as the dual brand CEO of Salon and Euler. In addition, Wei Brand and Tank brands are also fully integrated. Tank brand CEO Liu Yanzhao also serves as Wei Brand CEO, fully responsible for the operation and management of Wei Brand and Tank brands. According to Great Wall Automobile, after the completion of the integration of the two brands, they will operate independently, but whether the reorganized Great Wall Automobile can get a good market performance remains to be tested.

According to the sales target previously announced by Great Wall, it plans to sell no less than 2.8 million vehicles by 2023. However, according to the newly released announcement on adjusting the performance evaluation targets of the 2021 restricted stock incentive plan and the 2021 stock option incentive plan, Great Wall lowered its sales target to no less than 1.6 million vehicles by 2023, 1.2 million fewer than the previous plan.

Two years ago, Wei Jianjun, chairman of Great Wall Motor, issued a warning on the company's 30th birthday that the situation of Great Wall cars is endangered. Some people may still not think that Wei Jianjun's warning is too exaggerated, but for a private car company, the crisis is everywhere all the time, especially at a time when new energy vehicles have become a development trend, while other car companies are getting bigger and stronger. And if Great Wall Motor "remains the same", the crisis will continue to intensify. In the coming 2023, it will be an extremely important test for Great Wall Motor.

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