Wei Jianjun takes back his words: Haval H8 facing official price cuts across all product models

Gasgoo.com (Shanghai Nov 23th)- With the published data of automobile sales volume in October, news of “Official price cuts across all product models of Great Wall Motor Haval high-end H8” comes around the media. “From today to March 31th, 2016, any consumer of H8 will enjoy price cut of 22,000 RMB and warranty of 3 years or 100,000 kilometers as well.” This is the first time GWM H8 having news of price-cut across all product models.

It is well-known that Wei Jianjun, chairman of GWM, bases his entire automobile dream onto H8. GWM once made commitments that H8 will never reduce price to achieve the high-end strategy. However, data and pressure from sales market force Wei Jianjun to give up his persistence, with the first-time price cut of H8 playing as the strongest evidence.

In fact, signs that GWM would break its words appeared as early as in July, when GWM declared part of H8 models having price cuts in designated time. “Consumers who login in Havel official website, apply to join the H8 super experience activity, and buy two-wheel luxury model will have price benefits of 22,000 RMB, till the end of October.” Staff worker in GWM said to us. However, according to the newly published sales data in October, the strategy plays little effect in improving sales volume of H8. H8 sells 1,030 in October, far behind the passing line of 5,000 planed by Wei Jianjun.

Apart from high-end models of H8 and H9, other models of GWM play well in the market. GWM has a total sales volume of 80,292 in October, increasing 14%. Sales number of H6 and H2 all reach record high, with H6 37,541 and H2 16,788, increasing 24% and 44% respectively, which excludes the fact that market performance plays a key role in the disappointing H8 sales number.

According to the Q3 performance announcement, GWM has a 10% and 6% annual increase in operating revenue and sales volume respectively. However, the gross profit rate reduces 3.7% to 21.2%, and operating profit ratio reduces 3.5% to 10.9%. Some analysts believe the disappointing H8 and H9 market performance squeezes GWM’s gross profits, which is the key factor that forces Wei Jianjun to conduct H8 official price-cut.