Under the umbrella of Chuxing Group, the media outlet Chuxing Hundred People focuses on the evolution of the automobile transportation industry.
At the entrance of Haval’s Baoding research center stands a sign with the words “Happy 31st Birthday, Great Wall Motors” in red, located at 2076 Chaoyang South Street.
From Great Wall Motor’s 30th anniversary statement “Can Great Wall Motors survive next year?” to the 31st year statement “Chinese automobile brands only have one chance.”
Within a short one year period, Wei Jianjun replaced “achievement” with “crisis,” contemplating life and death.
A global game without gunfire is rapidly emerging in the electric and intelligent racing lanes. After holding the helm at Great Wall Motors for 31 years, Wei stands once again at another critical juncture in time.
“Venturing into the global market not only involves products, but new values.” Wei Jianjun clearly sees both danger and opportunity. During Great Wall Motor’s 8th technology festival, the key point of Wei’s speech for announcing the Great Wall Motor 2025 strategy was the transition from a car manufacturing-based enterprise to a customer operation-based enterprise and moving the value chain to the back-end.
He believes that if Chinese automobile brands want to truly surpass their competition, it is only in the next three to five years that they can quickly amplify their strengths and possibly lead the pack on this new track in new energy and intelligence.
“Moreover, Chinese automobile brands only have one chance.”
Understanding the bigger picture is not enough; methods need to be found to get out of the rut and move forward. The rotating president of Great Wall Motor, Meng Xiangjun, pointed out a direction: “The competitive advantage of Chinese automobile brands compared to foreign brands is intelligence.”
However, Great Wall Motor has never had sufficient discourse power in the area of intelligentization and their model layout in the market is still unsatisfactory. There are many possible scenarios as to whether the 2025 strategy can be smoothly implemented.
Of course, worrying is not helpful.
As Wei Jianjun once said, “What we face is uncertainty.” Whether they can step into certainty from this period of uncertainty is Great Wall Motors and Wei Jianjun’s only chance, which spans five years.
“Get ready”.
Fundraising is a must for transiting
In this immense preparation, all attention is focused on “achieving 4 million deliveries in 2025.”
How to achieve this is the question asked most frequently during media interviews. However, in Wei Jianjun’s grand plan, 4 million deliveries are not the heart of the matter.
What Great Wall Motors wants to do is not “the transformation of a traditional vehicle manufacturer”.
Although this process can indeed be summarized as the transformation of a traditional automobile manufacturer, and is similar to Volkswagen and General Motors, everyone knows that Wei Jianjun admires Toyota and wants to create the world’s leading hydrogen energy brand. This goal alone is enough to demonstrate his ambition.
Whether or not they are similar to others is not the main point of discussion. The key point is the 2025 strategy.
Great Wall Motor’s 2025 strategy reveals several figures that have caused an uproar and many cheered in excitement.## Translation
“In 2025, the annual global sales volume will reach 4 million vehicles, of which 80% will be new energy vehicles, and the operating income will exceed 600 billion yuan. In the next five years, the cumulative research and development investment will reach 100 billion yuan.”
What is this concept?
According to the data published by Great Wall Motors, the total operating income in 2020 was 103.308 billion yuan and the total sales volume for the year was 1.116 million units, including 57,000 new energy models.
This means that the revenue will increase by six times in less than five years, with an annual compound growth rate of more than 42%. The sales volume of new energy vehicles will increase by 60 times. Based on the annual sales volume of 4 million vehicles, Great Wall Motors will have a market share of over 13% in the Chinese market…
In fact, there is a progressive relationship between the 100 billion yuan research and development investment, the 80% new energy vehicles, and the 600 billion yuan revenue. Both the sales volume of 4 million units and the revenue of 600 billion yuan are the expected results that Wei Jianjun wants to achieve.
The key point is where the 100 billion yuan investment in research and development will come from. How can Great Wall Motors maintain a continuous stream of funds for research and development, especially when their flagship model, the Haval H6, has repeatedly lost its championship title and new brands like Salon haven’t taken off yet?
From the information released during this technology festival, Great Wall Motors has indeed embarked on a huge transformation plan. From electric, intelligent, hydrogen energy, and operation of new brands, money is required everywhere.
As the pressure for transformation has increased, car companies are trying out various methods to raise funds, including issuing new shares, separating new energy businesses and listing them separately, and expanding A-share financing channels, all of which are favored by investors. Great Wall Motors is no exception.
“The announcement of such a huge strategic plan by Great Wall Motors is an attempt to obtain recognition from the capital market,” which is a reasonable conclusion by market analysts.
Didi’s IPO, the promotion to a company with a market capitalization of 100 billion yuan, the Hong Kong listing of XPeng to raise funds, and NIO’s capital market leverage to boost its market value and save it from bankruptcy, even HEYTEA just raised 60 billion yuan in financing… All of them prove that capital markets are a good source of money, even faster than selling cars. This is a driving force for traditional automakers to transform themselves.
Transformation and research and development require money, which is something all the new and old forces know very well, and the capital market is a good place to get money. However, the capital market is not very optimistic about Great Wall Motors’ strategic plan announcement.
On the day of the strategic release, the stock price of Great Wall Motors (stock code: SH601633) fluctuated slightly, rising from 43.98 yuan to 44.32 yuan, an increase of less than 1%, with only a single stock rising by 0.34 yuan. It can be said that the capital market was “calm” about this.
However, Wei Jianjun’s character has always been “to do what he says”. Moreover, in the overall transformation plan, there has been no “ambition” for capital.
But still, there is a small matter that reveals a trace.
“Great Wall Motors completed the A-share public offering of convertible bonds and successfully raised 3.5 billion yuan,” with investment projects for “new model development” to help improve product intelligence. In addition, over the past year, long-term loans have increased from 1.2 billion yuan to 12.9 billion yuan, which also shows that Great Wall Motors needs money.
As for raising funds, Great Wall Motors has more than just its own few car brands, but also a profitable background.
Great Wall Motors has also placed bets on Honeycomb Power, which has already produced 10 million engines, and Honeycomb Energy Technology, which has just invested 5.6 billion yuan to build a new plant.
At the beginning of its establishment, Honeycomb Power set a strategy to achieve 55 billion yuan in revenue by 2025. “Our revenue last year exceeded 20 billion yuan, and we have already achieved profitability.” Zheng Lipeng, co-chairman of Great Wall Motors’ Honeycomb Yi Chuang Technology Co., Ltd., said.
In addition, Honeycomb Energy, Great Wall Motors’ power battery company, mainly focuses on new energy batteries and has more capital market imagination than Honeycomb Power. After setting a goal to double its sales revenue in 2021, it is also preparing to enter the capital market in 2022…
All of these are indispensable driving forces and capital sources to help Great Wall Motors achieve its 2025 strategy. When the industry is worried about how to achieve the target of 4 million vehicles, perhaps Great Wall Motors’ cards in hand have already exceeded imagination.
“Wei Jianjun’s decisions now are responsible for Great Wall Motors’ ‘next 30 years’. “This is the consensus of the industry.
Although Great Wall Motors has always said that it has no shortage of money and can afford this amount of investment, analysts are still concerned that the transformation cycle is very long and requires continuous investment of funds. The subsequent gap will still be a considerable amount.
“Raising money” is still one of Wei Jianjun’s heavy burdens.
Can’t hide it anymore”Intelligence will become the key to victory on the new track,” this is a clear statement from Great Wall Motor.
The old saying goes, to seize the high ground of new energy technology, technological layout is still the top priority.
This top priority was clear to Wei Jianjun before the HAVAL H6 was even launched in 2009. At that time, just as China’s auto sales surpassed the US and became the world’s largest market, Great Wall Motor established a new energy vehicle team dedicated to tackling the technical difficulties of the new energy field. It was indeed an early start.
Since the beginning of its layout, 12 years have passed in a flash.
During these 12 years, the HAVAL H6 has held the championship title for many years, and Wei Jianjun’s high-end brand WEY, which he staked his surname on, has become the most distinctive mark of Great Wall Motor in recent years. In other words, Great Wall Motor has not made a loud voice in the transformation of intelligence, coupled with the Salon brand that focuses on electrification and hydrogen energy, and the first vehicle will not be launched until 2022…
All these factors have led to a feeling of “seeing flowers in the fog” with regard to Great Wall Motor’s electric power reserve in the industry.
The feedback from the capital market also confirms this. Now, Wei Jianjun is well aware of this.
Those who know him know that he has always insisted on “overinvestment,” holding 100 points of technological reserves, but only conveying 60 to 70 points to the market. That was understandable in the era of traditional fuel vehicles, but it is a bit out of place in the intelligent era where product managers are leading the charge for brand marketing.
Does Great Wall Motor not realize this? After a few years of WEY operational experience, Wei Jianjun is very clear about this.
Therefore, after launching the “lemon, tank, coffee intelligence” three-value innovation technology system covering the entire industry chain of automotive research and development, design, production, and automotive life, he went ahead and announced it all at the 8th Science and Technology Festival.
Great Wall Motor needs a rich and three-dimensional “technology intelligence” label.
Whether it’s the Dayu power battery that opens to the outside world or the industry-leading 70Mpa pressure hydrogen storage tank, or making the tank the world’s strongest off-road model, an amazing 3.0T+9AT powertrain, as well as 112 technological innovations, including cobalt-free batteries, intelligent cabins, hydrogen engines, photovoltaic technology, etc…
Currently, Great Wall Motors has established a full industry chain plan including battery cell, mechanism analysis, PACK, BMS trial production and testing laboratories, battery production workshops, testing centers, and analysis centers. In addition to the Euler and Salon brands, Great Wall Motors will also launch a new hybrid new energy brand in September this year.
All of these are a testament to Great Wall Motors’ determination in transformation and preparation.
Whether it’s a do-or-die situation or a decisive moment, it’s not enough to describe Wei Jianjun’s determination. In fact, as he said, to achieve true transcendence, it can only be done within three to five years. And there is only one chance.
In fact, from the current layout of Great Wall Motors in the intelligent and electric industry chain, it is far from a simple transformation of a car enterprise. What Great Wall Motors wants to do is not only to succeed in the transformation of the automotive industry itself, but also to become an indispensable supplier and technology company in the core technology of the industrial supply chain.
Wei Jianjun’s determination and Great Wall Motors’ ambition are both quite evident.
This can be seen from the patent openness of Dayu battery. Coupled with a future development investment of 100 billion yuan, which will be concentrated in the field of pure electric, hydrogen, and hybrid new energy, it is also sufficient to prove this. At the same time, “research and development talents will double from the existing 15,000 base to 30,000, among which software development talents will reach 10,000.” The future expansion is almost all software talent.
Based on this purpose, I actually think that whether or not they can achieve 4 million vehicles in 5 years is not the most critical issue for Wei Jianjun. When everything is going smoothly, achieving 4 million vehicles may be a natural outcome.
However, Great Wall Motors cannot avoid the burden of traditional car companies in transformation.
From beginning to end, Great Wall Motors has had a habit of placing more emphasis on market size and market share. In this five-year process, the stability of Great Wall Motors’ determination is crucial.
Wei Jianjun once said that by breaking down the big goal, dreams can become less distant. Great Wall Motors also has a breakdown for 4 million vehicles.
The Haval brand will achieve 800,000 to 1 million, Euler and Salon will achieve 2 million, and WEY, Tank, and a new hybrid brand that will be announced in September will reach 1 million together.In this plan, both the market and the capital are relatively skeptical about whether Euler’s one million vehicles and Salon’s one million vehicles are too high. In fact, based on current sales, they are indeed high.
Due to the lack of chips, Euler has experienced two consecutive months of declining sales. Its total sales volume for 2020 was only 56,261 vehicles, which means it still needs to strive for twenty times that amount to reach one million vehicles. The first model of Salon will be launched in 2022, which still leaves them four years away from reaching one million vehicles.
Because of the insufficient sales of Great Wall Motors’ new energy plate, Wei Jianjun’s new task is to figure out how to enable users to perceive changes in their products as quickly as possible. All the veteran car companies are learning this task.
After all, users’ perception of technology is the first shot that marks the beginning towards achieving “4 million vehicles and 600 billion yuan”.
Great Wall Motors, don’t keep hiding anymore.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.