Great Wall Motor's Layout in Electrification, Connectivity, Intelligence and Sharing and Strategy Analysis Report, 2023-2024

Great Wall Motor (GWM) benchmarks IT giants and accelerates “Process and Digital Transformation”.

In 2022, Great Wall Motor (GWM) hoped to use Haval H6's huge user base to achieve new energy transformation, selling both PHEV and fuel editions of GEN3 Haval H6. However, the fact showed that this decision was a strategic misjudgment at the marketing level. Transformation of fuel vehicle brands requires new channels, new sequences, new traffic and other important elements. Finally, GWM sold 104,000 units of BEV models and 28,000 units of PHEV models in 2022 respectively, of which new energy passenger car sales accounted for only 15.0%. The pace of new energy transformation was slow and fell short of the company's expectations.

Emerging automakers such as NIO, Xpeng and Li Auto lead the transformation of automobile channels and separate functions of traditional 4S stores into two parts: 1) Retail experience stores, opened in central business districts, focusing on direct sales, and taking charge of exhibition, experience and sales, to shorten the distance with consumers and shape the brand image; 2) Delivery and after-sales centers, located in areas where traditional 4S stores cluster or other suburban areas.

Drawing lessons in 2022, in 2023 GWM Group made multiple changes, such as:

• First, Haval brand created an independent and exclusive new energy vehicle sales network - Haval Dragon Network;
• Second, fully shift to the ToC model: in the past, vehicles were sold through dealers, but now they are all sold with the ToC model and all executives open accounts on Weibo and other platforms;
• Third, shift to direct connection with users: emerging automakers such as NIO, Xpeng and Li Auto adopt a direct sales model to directly connect with users through automobile products, enabling more efficient product iteration. GWM is also shifting to a direct sales model;
• Fourth, improve brands - enhance the influence of its five brands in all aspects.

The strategic adjustment began to bear fruits. For the whole year of 2023, GWM's new energy vehicle sales doubled, totaling 262,000 units, a year-on-year spurt of 98.74%.

Competition in the automotive industry has extended from technology, products, and brands to management systems and organizational structures, which is a big test of rapid transformation capabilities of OEMs. After learning the marketing modes of emerging automakers in 2023, GWM will further learn management systems of IT leaders such as Huawei and IBM in 2024.

Huawei introduced IBM's management system in 1998 and has gradually grown into a global technology giant. Today the boom of automotive electrification, connectivity, intelligence and sharing requires OEMs to transform into a technology company.

In January 2024, GWM and IBM Consulting signed a strategic cooperation agreement on 'Process and Digital Transformation' in Baoding, Hebei. The two parties formally formed a long-term strategic partnership on the road to digital transformation and global development. GWM aims to comprehensively enhance the construction of mechanisms in 'marketing, supply, manpower and finance' to seize the digital intelligence track in the automotive industry.