Great Wall unfazed by new Chinese market rules

GREAT Wall Motors (GWM) Group is confident it can retain its leading position as the top-selling SUV brand in China despite the increased competition it will face from a policy change that will open up its home market to foreign car-makers.

Asked by GoAuto what the new rules will mean for the Chinese manufacturer that is the parent company for Haval, Wey and the new Ora EV brand, GWM Group CEO Wang Fengying said she was confident that domestic customers would remain loyal to local marques.

“Every car company has competed in this large, almost 30 million annual sales market – they have competed here,” she said.

“The Chinese consumers have already noticed the rapid growth of all the Chinese-produced vehicles in every way – quality and technologies – and they have confidence in terms of the capabilities of the Chinese brands to be better quality vehicles.

“There are more and more Chinese consumers who really like … the locally produced vehicles (better than foreign brands).”



Left: GWM Group CEO Wang Fengying

Under the existing policy, manufacturers were required to team with a Chinese auto-maker in a 50:50 joint venture to sell and produce vehicles, otherwise they would incur taxes of 25 per cent.

This led to car-makers such as Ford, General Motors, Volkswagen, Mazda, Mercedes-Benz, BMW and Renault teaming with marques including SAIC Motor, Dongfeng, Changan and FAW.

The new rules will ditch the joint-venture requirement by 2022 and is expected to be phased in over the next four years depending on the type of car, and it will open up China’s 28 million-unit new-car market to any foreign brands wanting a slice of the world’s largest automotive pie.

Ms Fengying said Haval has been the largest selling SUV brand in its home market for the last 15 consecutive years, with high-riding crossovers accounting for 50 per cent of the overall market share in China.

Last year, Haval sold more than 850,000 units in China with the most-popular model on 506,400 sales being the H6 mid-sizer, which was just updated at the Beijing motor show.

Globally, the Haval H6 found about 536,00 new homes to rank it the sixth most popular SUV behind the Nissan X-Trail (814,496), Toyota RAV4 (807,400), Honda CR-V (748,000), Volkswagen Tiguan (703,100) and Hyundai Tucson (532,000), but ahead of the Nissan Qashqai (498,900), Kia Sportage (425,500), Mazda CX-3 (408,400) and Ford Escape (375,900).

As a result, Ms Fengying said she believed it would be business as usual for GWM Group after the new rules come into effect.

“We believe this policy change will not have a direct impact on the Great Wall Motors Group, but more of an indirect one,” she said. “We do not have a joint-venture background, so it doesn’t really affect us.

“In terms of tariff reductions, particularly for those global luxury brands in the Chinese market, it will definitely help them to be more competitive in the market.

“Competition is inevitable, no matter where you are, whether you’re in China or other markets.”

Asked if a marque like Tesla building manufacturing facilities in China would threaten local brands, Ms Fengying said: “Even if Tesla builds a factory here, it will still be regarded as a foreign brand.”