Great Wall car sales lower than expected in 2017

Chinese automaker Great Wall reported a slight sales decline in 2017, lower than market expectations, due to weak performance in the sedan segment and more fierce competition.

The company announced that it sold 1.07 million vehicles last year, a decline of 0.4 percent year-on-year, according to a statement published by the company last night.

In January last year, Great Wall set its sales target for 2017 at 1.25 million vehicles. Based on the data released, Great Wall only achieved 85 percent of that target.

"The lackluster sales performance last year is due to fierce competition in the sport-utility vehicle (SUV) segment," Zhang Xiaofeng, an independent market observer said. "Great Wall faced more and more competition in the market since other domestic automakers also launched their SUV models in 2017 and consumers have more choice." 

Southern Weekly newspaper said in September last year that 2017 will be a tough year for Great Wall, and that 2018 will be even more competitive. The causes include delays in launching new models and a lack of appeal to young customers, they added.

The company's 2017 decline in sales was partly caused by a sales drop in the sedan segment. According to the data provided by the company, sales of Great Wall's sedans topped 12,033 in 2017, a sharp decline of 60.97 percent year-on-year.

Great Wall is known as a competitive car maker in the SUV market, but the company only reported 0.03 percent in sales growth in that segment last year, compared with its SUV sales in 2016.

Pick up trucks are the only segment which saw stable increases last year for the company, with sales rising 13.47 percent to 119,846 vehicles in 2017.

The overall sales decline of Great Wall vehicles in 2017 was also abetted by weak sales performance in the last month of 2017. In December last year, the company sold just 125,585 vehicles, down 16.58 percent year-on-year.

Despite a slight decline in terms of sales last year, Great Wall set its sales target for the year of 2018 at 1.16 million vehicles, which is 8 percent higher than the total sales of the company in 2017.

Credit Suisse said in a report that Great Wall’s sales performance in December last year is worse than market expectation. As a result, the holding company lowered its forecast for Great Wall’s earnings in 2017 to 5.3 billion yuan (US$810 million).

Credit Suisse also said that Great Wall’s sales target this year of 1.16 million units is “quite conservative" at 19 percent lower than their own estimation of 1.43 million vehicles.