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Great Wall SUV Strategy Faces Test

Annie Liu From 盖世汽车| July 31 , 2017

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Shanghai 31st July 2017 Gasgoo-A few years ago, Great Wall Motor took the lead in the implementation of "Focus on SUV", and it became the most proud auto-company. However, with SUV market shifting from Blue Sea to Red Sea as well as the landing of "Double Points Policy" , Great Wall Auto is facing a new test.

On the evening of July 21, Great Wall Auto released 2017 interim results: sales in the first half of the year totaled 41.26 billion yuan, a year-on-year decrease of 1%, with net profit of 2.501 billion yuan, falling by 49.42% compared with the previous year.

Great Wall has implemented the strategy of “Focus on SUV ”since the year of 2013, and its sales increased from 71.08% in 2014 to 87.3% in 2016. In 2017, with several independent and joint-venture SUV models launched into the market, Great Wall is not the one which dominates the SUV market any more. In 2017, cumulative sales of Geely in the first half of the year exceeded that of Great Wall for the first time, ranking second among domestic brands.

China's new energy vehicle point policy will be implemented in 2018. It says points of all car enterprises (including joint ventures) will be calculated according to the proportion of new energy vehicle production displacement.

Sales of Great Wall is mainly based on SUV, so double points system is undoubtedly a major challenge for it, which only has one new energy model, C30EV. If it does not adjust its product line, Great Wall Auto may face a lot of new energy negative points.

July 16, Great Wall Auto announced that the Great Wall Motor will obtain 25% shareholding of Hebei JOGOMO by cash injection. Great Wall had no sales in new energy vehicles in 2016. Insiders estimate that Great Wall Auto's negative points had been as high as 210,000 points in 2016. It is reported that positive points of Hebei JOGOMO will be directly transferred to Great Wall Motor for free after Great Wall investing in JOGOMO.

Obviously, Great Wall Auto' SUV strategy is facing to be tested. Whether insisting on its focus on SUV or adapting to the trend is a question for Wei Jianjun, founder of Great Wall Auto. We are looking forward to his answer.

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