Author | Xiao Ying
Editor | Qiu Kaijun
Great Wall Motors (GWM) is ready to implement its comprehensive new energy strategy, with all its brands embracing new energy more deeply.
Among them, HAVAL will launch a completely new new energy product series, with new naming and channels. In the future, under the HAVAL brand, the H series and dog series will mainly serve fuel vehicles, while the new product series will cover new energy products, including plug-in hybrid models and pure electric models.
Taking the just-launched HAVAL Second Generation Big Dog as an example, this model has both a plug-in hybrid version and a fuel version. After the release of the new HAVAL product series, the plug-in hybrid version will be sold under the new energy channel.
New energy vehicles under the WEY brand will mainly be plug-in hybrids, and pure electric models will also be launched in the future; tank brand will also have more plug-in hybrid models, while ORA and SHORTRON brands will focus on pure electric models.
On February 27th, prior to the launch of the HAVAL Second Generation Big Dog, Li Ruifeng, GWM’s Chief Growth Officer, talked about the above during a media interview.
“When traditional automakers transform to new energy, establishing a company, finding a big shot to be the CEO, and launching a new brand, do you think that this is enough to have the internal cognitive transformation to new energy within the enterprise, as well as the entire system’s capabilities? Absolutely impossible,” Li Ruifeng bluntly stated.
He said that new energy transformation is a very large-scale systematic project, and full preparation must be made on the organizational, product, and channel ends.
Completion of the Organizational Reform, “541” Model Implementation
For the implementation of corporate strategies, internal “united front” work is most important.
Li Ruifeng said that in August and September of last year, GWM underwent a large-scale organizational reform, including the reform of incentive mechanisms, the implementation of research, development, production, and sales mechanisms, and the coordination of internal goals. “If we win, we all celebrate with a drink, and if we lose, we may all face some sort of interest or job-related issues.”
Li Ruifeng introduced the “541” full-stack organizational model. Among them, “5” refers to the establishment of five middle platforms, including brand, channel, users, data, and sales service platforms. Currently, the organizational structure of the five middle platforms has been completed.
“4” refers to the four combat groups: the WEY and Tank combat groups, the ORA and SHORTRON combat groups, the HAVAL and Pick-up combat groups, and the overseas market combat group.
In the future, GWM will take the combat groups as the mainstay, and through the full empowerment of the five major middle platforms to the combat groups, it will conduct resource overall planning and application.# Li Ruifeng mentioned that establishing four battle groups is a reflection of Great Wall Motors on its current excessive category and brand. Previously, the strategy of finding a blue ocean market through a category to avoid market competition was becoming more and more difficult as the entire automotive market competition intensifies, so Great Wall Motors has to focus on the growth and shaping of its core brand.
“1” emphasizes the concept of the Great Wall, by issuing a unified action plan, spreading the same message in the global market and achieving the same systematic management.
For example, Great Wall Motors will focus on building technology brands with a Great Wall enterprise terminal, such as the Lemon platform DHT, Coffee Smart Driving, and Dayu batteries. These technological capabilities will be placed directly under the Great Wall Motors brand, and will then be extended through subordinate categories and brands to apply the technology brands on the ground.
Product End Subtraction to Build Star Products
At the same time as the organizational restructuring, Great Wall Motors also reorganized the product positioning.
The product end should subtract, and star products should be built, which is another decision made by Great Wall Motors after a deep thought process. Li Ruifeng introduced that within each category and brand in their respective fields, there must be a star product as important support.
At the same time, there will only be one star product appearing in each main price range and main level range, concentrating the energy into building it, and not simultaneously releasing two products to occupy the same field.
In addition to the recently launched Haval 2nd Generation Dog, in late March or early April, the Haval new product series will launch two flagship twin-star models with internal code names B07 and A07.
In addition, the Wei brand will build the 6-seater SUV flagship model Blues Mountain; the star product in the pickup segment already includes the Great Wall Pao and the Mountain Sea Pao; in the Tank brand there is the Tank 300, there will be Tank 500 PHEV and Tank 700 PHEV and other models in the future, further enriching the Tank category.
These products will anchor the product layout of Great Wall Motors, including categories, pricing, levels, and styling, supporting the overall logic of the star products.
Li Ruifeng said that only after the completion of the building process of these products, will they consider the future listing pace of products. Although Great Wall Motors has more than ten new energy vehicle models to be launched this year, they will be launched in an orderly manner, and the pace is more important than speed.## Clearing Inventory and Streamlining Channels to Allow Dealers to Fight Lightly
The comprehensive implementation of the new energy strategy is also inseparable from the support of the channel end. At the channel end, Great Wall has done two things. On the one hand, it has adjusted the inventory structure of terminal dealers, and on the other hand, it has merged channels to ensure the profitability of dealers.
“If there is a large amount of inventory of fuel vehicles, how can dealers use funds and personnel to fight this battle without hesitation? Dealers can only fight lightly in order to win this battle,” Li Ruifeng pointed out the core logic.
“Wholesale volume, a major OEM can easily achieve 100,000 or 200,000 with a little policy method.” Li Ruifeng said that when the sales of Great Wall Motors in 2022 fell compared with the previous year, Great Wall Motors did not use incentive policies to encourage dealers to hold inventory, but instead adjusted the inventory structure of terminal dealers, which is one of its key tasks in 2022, in order to allow dealers to fight lightly and officially launch the new energy battle this year.
Li Ruifeng introduced that regarding the launch of the Haval new energy series, from June last year to January of this year, Great Wall Motors held six strategic conferences for core dealer investors and store managers, conducted strategic promotion and joint discussions, and reached a consensus.
Currently, the number of stores applied for Haval new energy channels has exceeded 600.
To consolidate the dealer channels, Great Wall Motors has also merged channels. Wei and Tank, Euler and Salon, Haval and Pickup have respectively achieved channel sharing. Through this model, the profitability of dealers can be improved, and investment enthusiasm can be enhanced.
At the same time, Great Wall Motors has also studied the direct sales model. Li Ruifeng introduced that there will be a direct sales model under the Wei, Tank and Euler brands in the future, but only a small number of stores will be set up, as a display of image for first-tier and new first-tier cities, mainly relying on the existing high-quality dealer authorized agency model.
Li Ruifeng hopes to build a region management center for the core markets through direct sales stores, as a feedback window for brand promotion, user operations, and the implementation of business policies, mainly to avoid some policies that are not down-to-earth and not close to the market.
Not Afraid of Price Wars – To Win the Entire New Energy BattleThe New Energy Vehicle Market Battle Triggered by Tesla’s Price Reduction Has Become a Core Topic at the Beginning of 2023 in China.
According to Li Ruifeng, the logic behind Tesla’s price reduction is nothing special. Great Wall Motors has long enjoyed the benefits of explosive sales. At the same time, he believes that Great Wall Motors can carry out a price war, but it should consider the high-quality development of the entire company.
He talked about how the Haval H6 is a star product with monthly sales of 40,000 to 50,000 units, with peak sales of 70,000 to 80,000 units. It even ranked first in the SUV market during the 101st month.
This product even led to other brands continuously entering the SUV market, resulting in a 50:50 market share between domestic SUVs and sedans.
With such a scale advantage, when other car companies entered the SUV market, Great Wall Motors also used price cuts to block other competitors.
He also stated that Tesla’s current price reduction is indeed impacting the domestic new energy vehicle market, and has brought many thoughts, and even forced people to respond to it.
As a comprehensive automobile group with multiple brands, Great Wall Motors has the strength to deal with Tesla’s price war. He talked about how pick-up trucks, tanks, and fuel versions of the Haval already have good sales and profit foundations. In the future, they will continue to strengthen the market foundation of fuel vehicles and ensure profit sources through strategic deployment of fuel and PHEV models. This is where Great Wall Motors’ confidence lies.
However, the new energy vehicle market is not a sprint but a marathon. To pursue a healthy development model, we cannot simply follow prices. The pursuit of sales, scale, and market share at the expense of profits is not a sustainable business model.
“He said that Great Wall Motors hopes to win this battle through comprehensive competitiveness, which includes cost advantages, scale advantages, technological advantages, and user reputation.
“We are not afraid of a price war, and we will work hard to fight back,” said Li Ruifeng.
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.