Cars and Trips

Some time ago, a news about Great Wall Motor’s acquisition of Jeep brought this controversial Chinese-made car brand to the table again.

Great Wall Motors, a private car company based in Baoding, Hebei Province, which started from pick-ups and is dominated by SUVs, has been creating high-growth and profitable performance for more than 10 consecutive years. It is one of the most influential car companies in China's independent brand camp. Its Haval brand has won the domestic SUV brand sales champion for 14 consecutive years.

However, behind the applause, there are many serious flaws in the Great Wall Motor: low-end competitiveness is weakening, high-end SUV strategy is blocked, sedan pickup products are marginalized, new energy development is slow, and militarized management is anti-human. How long can Great Wall Motor support? Why can't it become global NO.1?

One leg hit the country, becoming the world's largest SUV brand?

In February 2017, at the site of the Great Wall Automotive Brand Campaign, Wei Jianjun, chairman of the Great Wall, shouted two slogans of "Jia Yueting style": one is that "by 2020, Haval brand sales will exceed 2 million vehicles and become the largest in the world. "SUV brand"; the other is "SUV is not the world's first, do not consider launching sedan products."

Since the official announcement of the independence of the Haver brand in March 2013, Great Wall Motors has embarked on the road to a single-wood bridge for light cars and heavy SUVs. Immediately following the channel network, trying to break through the “ceiling” of the Chinese brand of 200,000 yuan, suspending the car business, and implementing the “red and blue standard strategy”. For many years, Great Wall Motor has been deeply cultivating a subdivided field, and has indeed tasted “partial students”. The sweetness.

One leg hit the country, starting from the Great Wall to Haval as an independent brand, and the proportion of its products became more and more out of tune. First of all, Great Wall's product layout is centered on SUVs and pickup trucks. Secondly, a single product line is too dependent on a single model. From sales data for the past few years, it can be seen that the Haval H6 has been the mainstay of sales of the Great Wall SUV.

In 2015, the Great Wall SUV accounted for 82% of the total sales, while the final sales of the Fengjun series of pickups and C30-led cars accounted for 12% and 6%, respectively.

Although Great Wall Motors has done a good job on SUVs, not all SUVs can sit on the throne. The year-end sales of the Haval H8, a large-scale high-end SUV that has been highly hoped for by the Great Wall, have finally been fixed at 8,985 units, accounting for only 1% of the Great Wall's sales, and H9's monthly sales have been consistently at a thousand cars.

In the low-end SUV market, in the past, the joint-venture brand was not at the top, the independent brand was weak, and the Great Wall seized the opportunity. It was basically a dominating company. However, as the joint venture brands continue to lower their prices, JAC, Baojun, and Changan have introduced models with lower price ranges, eroding the SUV market.

The low-end competitiveness is weakening, the high-end SUV strategy has been hindered, the marginalization of sedan pickup products, and the development path of the Great Wall Bridge alone has been exposed to the market. With the appearance of the Great Wall ceiling, Wei Jianjun is obviously more anxious than anyone else. In September 2015, he re-raised the limousine business: “The car must be done.”

In fact, since Great Wall Motor began to set foot in the car field in 2008, almost all models have failed. From the start of the dazzling, elven, Ling Ao and cool bears, listing to the delisting no one cares; then finally the hot Tengyi C30 "to die of addiction."

However, Great Wall Motor’s “focus strategy” has further increased the pressure and risks faced in product adjustments.

Looking at Geely's development path, on the one hand, the company is doing subtraction, cutting down the slow-moving models, streamlining the retail sales network, and redistributing the brand strategy; on the other hand, it is doing addition. In addition to Volvo brand upward breakthrough, but also cut into the field of new energy vehicles.

The auto makers of different brands that chose to blossom in full and walked in one leg had different sales in the first half of 2017. “Two legs” ended the “one leg”, and Geely’s cumulative sales led the Great Wall.

R&D investment is low, growing in the era of “big copying and reform”

Domestic car companies have a common problem, that is, due to the weak industrial foundation, they cannot escape the plagiarism of others. The Great Wall is no exception.

After 2010, car consumers gradually became more rational in buying cars, and the sources of information gradually began to equalize. The appearance of copying Dafa is not suitable for the market, and the Great Wall is also adapted to local conditions and has begun the “Keep the 2.0 era”.

The biggest change in the so-called “Shanzhai 2.0 era” era is to plagiarize a better-known name—reverse research and development. The so-called reverse research and development, before the development of the product, selected a relatively mature model of foreign brands, its power equipment, interior configuration and other aspects of a simple imitation, only in the appearance of different levels of rectification.

There is no large amount of R&D costs for positive development, and there are no demonstration experiments for many key components. However, this "snapping short-circuit approach" minimizes the cost of research and development of the Great Wall, creates a price war, and quickly seizes the market.

The Great Wall has followed this "tradition" from cars, pickups and SUVs. Prior to this, Fiat had sued the Great Wall Elf sedan for the design of the Panda model, and ended up with Great Wall Motors modifying the appearance of the wizard.

However, Great Wall Motor's "reverse research and development" did not end there, but it was even more persistent. From wizards to cool bears, from Harvard H6 to H9, the shadows of foreign cars can be seen on a series of models in the Great Wall. Among the many independent brands, Great Wall Motors is a thorough performer of imitation.

In the past 30 years since the joint venture, the Chinese automobile market has been firmly controlled by foreign brands. The actual environment faced by independent brands has determined that most car companies are hard to set their minds from scratch. Some industry experts even asserted that the reverse R&D model is an inevitable stage for the development of autonomous vehicle companies, that is, it can save R&D costs and better cater to consumer preferences.

The market performance also confirms this view. Long-term imitating the Great Wall Motors that have been transformed has earned a lot of money in recent years.

But there is a fact that there is a clear bottleneck for reverse R&D – brands are more difficult to break through. The reason why the Great Wall's SUV can sell well is that it has a good grasp of the timing of entering the market and its precise product positioning, but also its lower price compared with joint venture brands. According to statistics, 70% of people who buy Haval H6 do not value technology and quality. Instead, they can buy a SUV that is plausible at half the price of a joint venture brand.

This model does not last long. Great Wall Motors has two good roads, either tolerate loneliness and continue to cultivate the low-end market, or learn to combine the production and research of Changan Automobile. After all, the Great Wall, which has a net profit of 2.5 billion a year, should also increase R&D. Invest in and find your own core competencies instead of always thinking of buying Jeep and becoming the second Geely and Volvo.

In addition, from the initial stage of the company, reverse R&D is not difficult. Compared to Zhongtai, which is known as Shanzhai, Chairman Wu Jianzhong at least willingly said, “We have no money, we can only copy first.” This seems to be more than the two demands of Haval H6 in the leadership of Great Wall Haval. The first not to copy, the second is not ugly "to be much calmer.

Anti-human corporate culture

Let me talk about the corporate culture of the Great Wall.

Most of the workers of Great Wall Motors come from the suburbs and counties of Baoding. Their cultural level is not high, and their labor costs are relatively low. This allows Great Wall Motor to obtain greater returns at the same product prices.

These employees must undergo a one-month military training before they formally join the Great Wall Motors. They must also receive a one-week military training for promotion. An ordinary employee is promoted to the director and becomes a half military. In company management, Wei Jianjun is an ironclad school. The militarized management has become a well-known label of Great Wall Motors.

Military training is only the beginning. Every Great Wall employee must back up a 24-page employee handbook. Some of these rules are: Great Wall employees must have the wolf rabbit spirit, take the initiative to attack like a wolf, and be as alert as rabbits.

This militarized management of Wei Jianjun even detailed to the details of the employee's behavior, and was severely perverted. For example, the gate of the Great Wall Headquarters is equipped with a speedometer. When employees enter the factory early in the morning and their pace is not up to the “5-second, 7-step” standard, they will be given a warning.

Stringent code of conduct extends even to employees' spare time. Great Wall Motor stipulates that employees may not be invited by cross-departments in weddings, funerals, and marriages. The number of participants in this department must also not exceed 20, and the gift money per person must not exceed 50 yuan.

Discipline brings efficiency, and principles determine the atmosphere. Wei Jianjun hated corruption within the company. To this end, he secretly established the “Operation Supervision Department,” an agency similar to the special operations organization. Each employee of Great Wall Motors will issue an honesty and self-discipline card, which will be printed with the “Operation Supervision Headquarters” phone for employees to report.

This department is unusually mysterious. The employees dubbed it "Jin Yi Wei," reporting directly to Wei Jianjun, and the unruly people would never be tolerated once they had been investigated. At the Great Wall headquarters, not far from the stone monument, there is also a “Alarm Bell” map, engraved with the most serious cases of bribery.

Fines are a necessary means of Great Wall management, and even if the system is used to sit, fines have been raised from the original 100 yuan to 500 yuan. According to the legend, Great Wall Motor’s fines within a year can add up to tens of millions.

In addition to punishment, another "heinening" of the Great Wall is frugality.

For example, in the 16th-floor headquarters building of Great Wall Motor Co., the elevators are only required to stop at the 8th, 13th, and 16th floors. The employees are lifted on the 8th or 13th floor and then walk to the floors of their respective offices.

For another example, in September 2011, Great Wall Motor returned to the A-shares and would like to hold a banquet to thank the stock underwriting agencies. Under the advice of Mr. Wei Jianjun, do 100 tables or not? Wei Jianjun said categorically that he would run a table and send a model of the Great Wall.

The militarized management of the Great Wall is a single high-energy person who mobilizes many low-energy people to perform. This is the simplest management. The "iron law" that seems to inflict great damage on the Great Wall actually hurts the company. The Great Wall is almost the biggest one in the automotive industry. It takes half of every year. Sweatshops don't need talent, they need human machines, and they are quick machines to replace.

Write last

Lu Yao said in the "Ordinary World": "Who told you to read so many books, and you know that there is a big world outside of Shuang Shui Village..."

This is like the Great Wall Motor, partial security in this third-tier city of Baoding, Hebei, but because they know the outside world, with the "world's largest SUV brand" dream, this is a breakthrough in the vitality.

The low-end competitiveness is weakening, the high-end SUV strategy is blocked, the sedan products are marginalized, new energy development is slow, and the militarized management is anti-human. Without solving these problems, the Great Wall is always just a frog in the bottom of an ordinary world.

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