Wheels of Change: the Story of Great Wall Motor (Part 1)

Hi, everyone! Welcome to Gasgoo. In this episode of “Wheels of Change: Stories of Chinese Auto Giants,” let’s delve into the transition journey of Great Wall Motor.

The Rise of Great Wall Motor

Great Wall Motor Manufacturing Plant was set up in 1984. Wei Jianjun took over the company in 1990 and transformed it from a state-owned enterprise to a private company in 1998.

Wei Jianjun, Photo credit: Great Wall Motor

Known for his military-style demeanor in the automotive industry, Wei Jianjun is a proactive leader. Under his leadership, Great Wall Motor has developed a distinctive management style characterized by a “semi-military” approach, setting it apart in the automotive industry.

Unlike most Chinese private car companies, Great Wall Motor started with commercial vehicles instead of passenger cars.

Great Wall Motor’s early business focused on producing light trucks and vans. The company entered the pickup truck market in 1995 and established the Great Wall Internal Combustion Engine Company in 2000, becoming one of the Chinese automakers with proprietary powertrain systems.

In 2002, the company entered the Chinese passenger vehicle market with the launch of the Safe SUV. The famous HAVAL SUV was officially put into production in 2005 and the HAVAL H6 model was launched in 2011.

In 2007, the company officially rolled out its first sedan and obtained the qualification for sedan production, making its formal entry into the sedan market. From early models such as Peri, Florid and Phenom to later brands like Voleex, Great Wall Motor’s sedan business has been described as lukewarm, with few products with outstanding market performance.

Photo credit: Great Wall Motor

Around 2014, Great Wall Motor temporarily “abandoned” its sedan business and concentrated on developing SUVs. While Great Wall Motor never officially declared that it was “abandoning sedans,” the undeniable fact is that the company did not introduce any new sedan models in the following years. Instead, it continued to deepen its lineup of SUVs.

Sales of Great Wall Motor from 2010 to 2020     Green: SUV; Red: MPV; Yellow: Sedan

From 2010 to 2020, the proportion of SUV, MPV and sedan sales in Great Wall Motor’s total passenger vehicle sales volume has changed significantly.

Around 2014, the share of the sedan business in Great Wall Motor’s total sales saw a disruptive change, from a position roughly equal to that of the SUV business, to gradually becoming a peripheral activity outside the SUV, to almost zero in 2018. In that year, Great Wall Motor’s SUV sales exceeded 900,000 units for the third consecutive year, while its sedan sales were less than 6,000 units.

Since 2018, Great Wall Motor’s performance in the sedan market has started to improve, mainly due to the successful launch of a series of pure electric sedan models. Taking advantage of the growing demand for electric vehicles in the Chinese auto market, Great Wall Motor has gradually built a loyal customer base.

Great Wall Motor's former dominance in the Chinese market was almost entirely based on its SUV models. During this period, driven by the continued popularity of the HAVAL H6, HAVAL has gradually become the leading brand in the global SUV market.

HAVAL H6 Becomes the Mainstay of Great Wall Motor

In March 2013, Great Wall Motor officially announced the independence of the HAVAL brand. The HAVAL brand began to operate independently in a separate network, becoming one of the few global independent brands to produce only SUVs, alongside Jeep and Land Rover.

In August 2011, the HAVAL H6 model was launched on the market, with cumulative sales of over 30,000 units by the end of the year. In 2012, the model demonstrated strong market potential with annual sales approaching 150,000 units, competing on par with popular joint venture SUVs like the Volkswagen Tiguan and Honda CR-V.

Over the next decade or so, the HAVAL H6 has performed remarkably well in the SUV market. It has taken the top spot in SUV sales over 100 times, with monthly sales reaching 70,000 or even 80,000 units. These monthly sales records appeared unbreakable in the past but have been consistently surpassed by the HAVAL H6 series.

The Old HAVAL H6, Photo credit: Great Wall Motor

In 2016, Great Wall Motor achieved a new milestone by reaching one million units in annual sales for the first time, with a total of 1.07 million vehicles sold. This year also marked the peak sales of the HAVAL brand, with annual sales exceeding 900,000 units. Among them, the HAVAL H6 has become the mainstay of the brand with annual sales of nearly 600,000 units.

Annual Sales of HAVAL H6 from 2013 to 2023

What factors contributed to the HAVAL H6’s remarkable market performance at that time? In addition to its continued commitment to the SUV market and early entry into the segment, Great Wall Motor’s ability to correctly identify end-market preferences was also a key factor.

The first-generation HAVAL H6 was developed through reverse engineering. However, as the Great Wall system evolved and capitalized on Chinese consumers’ preference for space and economy, Great Wall Motor tailored and launched the new HAVAL H6 series during a favorable market window. This move set the stage for its eventual success.

While the old HAVAL H6 did have some minor issues in aspects such as powertrain and chassis, these were generally acceptable given its competitive pricing.

The lineup of HAVAL H6 models was once quite extensive, with nearly a hundred different versions introduced within just a few years. At one point, dozens of versions were available at the same time, offering consumers a wide range of choices. Today, many Chinese automakers still employ the HAVAL H6’s strategy in their products.

Another key factor in the success of the HAVAL brand was the rapid penetration of lower-tier markets.

As early as 2012, Great Wall Motor had already moved beyond the intense competition in the first- and second-tier markets and shifted its strategic focus to the third- and fourth-tier markets with greater potential. By the end of 2012, over 87% of Great Wall Motor’s dealer network had been established in third-tier and lower-tier cities, where market growth was faster.

In the years that followed, Chinese lower-tier markets gradually became more affluent and emerged as a new battlefield for automakers. Great Wall Motor had already begun channel sinking several years earlier, positioning itself at the forefront of this trend.

It is important to note that unlike the emphasis on pleasure demands in first- and second-tier cities, many consumers in third- and fourth-tier markets prioritize practicality and utility. They look for vehicles that can accommodate passengers and handle cargo efficiently, which is why SUVs are more popular than sedans in these regions.

After 2016, the market became highly competitive, which began to affect the HAVAL H6. The turning point came in 2022, when the HAVAL H6 lost the title of the annual best-selling model in the Chinese SUV market, marking the end of its nine-year dominance. The BYD Song PLUS and Tesla Model Y, both new energy vehicles, have both surpassed the HAVAL H6 in the sales rankings.

The Path to Electrification

The transition to new energy vehicles is imperative for automakers, including Great Wall Motor.

In early 2018, Great Wall Motor and BMW Group officially signed a cooperation agreement. In November 2019, Spotlight Automotive, the joint venture between the two OEMs, was officially announced and began to produce MINI brand pure electric cars in China.

Photo credit: Great Wall Motor

At the end of 2023, Spotlight Automotive was included in the 378th list of the “Announcement on On-road Motor Vehicle Manufacturers and Products” released by the Ministry of Industry and Information Technology of the People’s Republic of China, which meant that Spotlight Automotive officially obtained independent production qualifications.

In addition to the new energy vehicle project in cooperation with BMW, Great Wall Motor independently launched the new energy vehicle brand ORA in August 2018, which is the fourth brand under Great Wall Motor after Great Wall Pickup, HAVAL and WEY, marking Great Wall Motor’s formal entry into the new energy vehicle market and the introduction of new energy vehicles.

Following the launch of the ORA brand, the company quickly introduced two models, the ORA iQ and the ORA R1. However, both models have encountered their own market challenges after a short period of time. The ORA iQ received many complaints from car owners due to a sharp decline in its winter range, and its sales began to decline in the second half of 2019.

The ORA R1, a mini electric vehicle, also struggled in the market. According to the data, the ORA brand sold less than 30,000 units in 2019, which is a disappointing start.

Great Wall Motor’s first attempt to enter the new energy vehicle market didn’t meet the market’s needs, which required a strategic review before returning to the market.

Later, the HAVAL brand launched the DARGO model, which was successful due to its unconventional marketing. Shortly after, the ORA Cat series models made their collective debut. On July 15, 2020, the first model of the ORA Cat series - the ORA White Cat - was launched, followed by the ORA Good Cat, which was announced at the end of July and officially launched in November. Together with the renamed ORA R1 as the Black Cat, ORA quickly had three Cat Series models on the market.

In addition to updating its products, ORA also underwent a new positioning strategy. The brand began to promote itself as “a car brand that loves women more,” a positioning that continues today. Subsequent models like the Ballet Cat and Lightning Cat were also aimed at female drivers.

ORA Good Cat, Photo credit: Great Wall Motor

This adjustment worked. In 2020, the ORA brand achieved annual sales of over 50,000 units, which doubled to over 100,000 units in 2021. In 2022, Great Wall Motor stopped selling the entry-level Black Cat and White Cat models. Although sales declined slightly in the following two years, ORA’s annual sales remained above 100,000 units.

In Great Wall Motor's transition to new energy vehicles, ORA was not the only one that initially went off course. In the transition of its original brand to new energy vehicles, the company also once "bet on the wrong horse”.

In July 2020, Great Wall Motor introduced the L.E.M.O.N. PLATFORM, TANK PLATFORM and COFFEE INTELLIGENCE as three major technology brands, pioneering the concept of brand technology management. This move quickly became a hot topic in the Chinese automotive industry and attracted widespread attention. However, when it came to implementing these technologies into actual products, the process faced many twists and turns.

Great Wall Motor initially chose the higher-end WEY brand to lead the charge, rather than the mass-market HAVAL brand.

To enhance the competitiveness of the WEY brand, Great Wall Motor pioneered the application of technologies such as laser radar, autonomous driving, smart cockpit and plug-in hybrid in the WEY brand products. However, the results were not satisfactory. The WEY brand failed to make a breakthrough in the Chinese plug-in hybrid vehicle market in 2022, with sales of only 26,000 units for the entire year.

Then, Great Wall Motor's statement admitted that there were problems with management and strategic direction. The plug-in hybrid model released by the WEY brand deviated from the mainstream market direction in terms of styling (leaning toward the attributes of fuel vehicles) and price (around 300,000 yuan).

At the end of 2022, Great Wall Motor announced a restructuring of its brand organization. While HAVAL and Great Wall Pickup continued to operate independently, ORA and SALOON were merged, and WEY and TANK were fully integrated in terms of organizational management.

As early as August 2022, the HAVAL brand had already announced its plans for full electrification. In September of the same year, the HAVAL H6 DHT-PHEV was officially launched. With the development of the third generation of HAVAL H6 models, the brand finally introduced its own new energy vehicle model.

At the INTELLIGENT NEV DAY event held in March 2023, Great Wall Motor officially released a new intelligent 4WD electric hybrid technology - Hi4. The HAVAL brand took the lead in launching products equipped with Hi4 technology and the HAVAL Fierce Dragon series was officially launched in May 2023, completing the HAVAL brand’s product lineup of H series, DARGO series and Dragon series.

Fierce Dragon MAX Photo credit: Great Wall Motor

2023 was also the breakthrough year for the HAVAL brand's new energy products, with the introduction of Fierce Dragon, Fierce Dragon MAX, Menglong, the second generation of the DARGO PHEV and the third generation of the HAVAL H6 PHEV. Currently, the HAVAL brand has launched 5 plug-in hybrid models.

According to the latest data, the HAVAL brand’s annual sales reached 715,000 units in 2023, representing a 16% year-on-year increase. Among them, HAVAL’s new energy vehicles reached an annual sales volume of 77,000 units, marking a remarkable 648.56% year-on-year increase.

In addition, the WEY brand has fully transitioned to new energy vehicles. The TANK brand has opened up a new energy off-road market for Great Wall Motor, helping the company to establish itself in the high-end market.