Great Wall Motor lowers 2020 sales, net profit targets due to coronavirus impact

Shanghai (Gasgoo)- Great Wall Motor (GWM), China's biggest SUV and pickup manufacturer, has cut its 2020 sales target to 1.02 million units from 1.11 million as the coronavirus epidemic undermines its outputs and consumers demands.

The decreased sales target is lower than the automaker's 2019 sales target. Last year, GWM sold 1,060,298 new vehicles, defying against the overall industry's downturn with a year-on-year growth of 0.69%.

（Photo source: Great Wall Motor)

At the same time, the annual goal for net profit has been reduced by 13.83% from RMB4.7 billion to RMB4.05 billion, which are fewer that the money earned in 2019 as well.

The automaker's 2019 net profit attributable to shareholders slid 13.73% over a year ago to RMB4.493 billion. GWM said the net profit downturn should be partly ascribed to the increased cost in branding buildup. To improve the brand profile and cement consumers' loyalty, GWM adopted a series of measures like offering users overlong warranty period. Besides, both the increase in R&D expenditure and the decline in non-operating interest are blamed for the profit drop.

The company didn't change the sales and net profit targets for 2021 and 2022 as “the epidemic is expected to merely hit the operation in 2020,” GWM said. Over the next two years following 2020, the automaker is ambitious to sell 1.21 million and 1.35 million vehicles respectively, and targets full-year net profit of RMB5 billion and RMB5.5 billion.

The coronavirus epidemic has inflicted heavy losses on most of China automakers' sales. China's auto sales in Feb. plunged 79.1% year on year to only 310,000 units, according to China Association of Automobile Manufacturers (CAAM). GWM posted a higher slump of 85.48% with 10,023 new vehicles sold.