“On a par with Jeep and Land Rover, Haval will become the world’s best-selling SUV-dedicated brand in three to four years,” said Wei Jianjun, chairman of Great Wall Motor, during its third Science Technology Festival held in Baoding, Hebei Province on May 31.
In 2012, Haval sales rose 71 percent year-on-year to 281,120 units, accounting for more than 45 percent of total sales of Great Wall, according to data released by China Association of Automobile Manufacturers (CAAM).
The combined sales of the brand in the first four months of this year reached 122,700 units. Haval has become the best-selling SUV brand in China.
Although demand for SUVs in China remains bullish, the growth rate has slowed down. In 2009 and 2010, the grow rate in each year was 66 and 81 percent, but in 2011 and 2012, it slipped to 21 and 21.8 percent respectively, according CBU-Autostats. As more foreign brands launch locally produced SUV models, such as the Peugeot 3008, Buick Encore and Ford Escape, with competitive prices, competition in this segment is becoming fiercer. Jeep and Land Rover also recently announced plans for localized production.
Great Wall therefore faces the challenge of how to maintain sales and market share lead of its 10-year-old Haval. The company announced that the Haval H2 would hit the market at the end of October this year with an estimated price of ¥90,000 to ¥120,000 ($14,670-$19,560). The H8 will be launched in November with a price tag of over ¥200,000.
Great Wall president Wang Fengying told CBU/CAR that the H2 will be made at the second-phase facility in Tianjin with a planned annual capacity of 200,000 units. The Haval H6 will be produced at the existing Tianjin factory.
Great Wall’s new plant in Xushui will be put into use at the end of October this year with an annual capacity of 250,000 vehicles, including the H8 and H7 models. The second-phase of the Xushui plant is expected to be completed in 2014 with an annual production capacity of 250,000 vehicles.
Great Wall plans to complete a dedicated Haval distribution network in two to three years, according to Wei. About 70-80 Great Wall dealerships have built Haval stores for independent operation.
While it is important to get into developed regions like North America and Europe for the Haval to become a global brand, Great Wall does not have immediate plans to expand into North America, according to Wang. For now, most of Great Wall’s 12 CKD and SKD factories are located in the developing countries such as Indonesia, Iran, Egypt and Ecuador, and its main export countries are Russia, Australia and South Africa.
Independent R&D is the key to Great Wall’s achievement and growth, according to Wei. “Foreign brands may bring advanced manufacturing technology and management to local automakers through joint ventures in China,” Wei said, “but the Chinese partners are not able to get any core technologies from their foreign partners.”
Great Wall spends 3 percent of its annual sales on R&D, said Wei. Since 2006, the automaker has invested more than ¥4 billion on R&D and the total amount will reach ¥8 billion in 2015. Its new ¥5 billion technology center is expected to become operational in the second half of 2014.
The company has over 7,000 engineering staff and the total number will surpass 10,000, according to Wei.
In the passenger car segment, Wei said the company will continue to focus on making A-class cars, and has no plans to move into B- and C-class car segments.
“A lot of global leading automakers are based in small cities or the countryside,” said Wei. “The Baoding-based Great Wall will also become an excellent company focusing on R&D, technology and talents.”