Text / Seven Kung

Source / Jie Dian Finance

Confronting the issue of "inward-spiraling competition," high-ranking officials have taken decisive action!

Recently, senior officials convened a meeting where Li Chao, Deputy Director of the Strategy Research Office and Press Spokesperson, announced a comprehensive plan to address "inward-spiraling competition" in key industries. This plan encompasses four strategic aspects: innovation drive, local constraints, industrial layout, and industry self-discipline.

This statement sends a strong corrective signal from a macro perspective, aiming to regulate and constrain phenomena such as zero-sum games, redundant construction, and low-quality expansion across various industries. It also signifies that China's manufacturing and emerging industries are transitioning from extensive farming to high-quality development.

In the fiercely competitive automotive industry, Wei Jianjun, the leader of Great Wall Motors, has long been aware of its pitfalls. He has repeatedly stated publicly, "Irrational and unbounded competition has severely harmed automakers' interests, impacting upstream and downstream sectors and tarnishing the image of Chinese brands."

Looking back, Wei Jianjun's insights prove prophetic – he is a true industry diagnostician and builder.

01 The Alarming Toll of "Inward-Spiraling Competition"

Wasting resources, exacerbating internal friction, eroding trust, stifling innovation, impeding progress… "Inward-spiraling competition" has undeniably become a societal cancer, with the automotive industry serving as a stark example.

Data reveals that in 2024, automakers' "price wars" led to direct losses of RMB 138 billion, drastically reducing the industry's profits to RMB 462.3 billion, a year-on-year decline of 8%, with a profit margin of just 4.3%.

In comparison, Toyota's 2024 profit reached RMB 236.4 billion, with a profit margin of 9.9%, equivalent to one company achieving half the results of hundreds of Chinese automakers combined.

From 2021 to 2024, the automotive industry's profit margin plummeted from 6.1% to 4.3%, further slipping to 3.9% in the first quarter of 2025, perfectly illustrating the adage, "There is no lowest, only lower."

What does 3.9% represent? It means selling a car for RMB 100,000 nets our automakers less than 40% of what Toyota pockets.

In reality, the relentless "price wars" have left numerous automakers in the red.

While new players may appear glamorous, only a handful, such as Li Xiang and Thalys, have achieved a balance between revenue and expenses. Some automakers, desperate to grab customers and market share, sell cars below cost price.

This self-destructive approach not only devours the industry's healthy profits but also drains the vitality of some market participants.

According to incomplete statistics from Jie Dian Finance, no fewer than 10 automakers have faced survival crises in the past two years, either on the brink of collapse or having prematurely "fallen martyr," including Yuanhang Auto, Hopon Auto, Jiyue Auto, Nezha Auto, and HiPhi Auto.

The automakers' plight has reverberated throughout the entire industrial chain.

Many automakers delay payments and pressure prices to cut costs, leading to liquidity crunches for upstream suppliers. Small and weak SMEs often cannot withstand the pressure, teetering on the brink of bankruptcy with no recourse.

Over the past year, more than half of China's auto dealers have incurred losses, with an average loss of RMB 1.78 million per dealership. One luxury brand dealer even reported losing RMB 1-2 million per month. Over 4,000 dealers have withdrawn from the network or closed down, averaging 10 closures daily.

The head of a BMW 4S dealership in Beijing couldn't conceal his frustration: "Selling cars is burning money just to stay afloat."

The alarming toll has deeply grieved and regretted Wei Jianjun, a veteran focused on car manufacturing for 35 years.

If you love something deeply, you plan for its long-term future. Since 2024, Wei Jianjun has repeatedly emphasized, "This kind of bottomless price reduction doesn't lead to profitability. Without profitability, how can a company thrive?" "Any business needs profits to generate revenue, blood, and continuous investments for development."

Great Wall Motors, under his leadership, has set an example by eschewing bubbles and choosing a restrained path, reaping rewards from the market.

Financial reports show that in 2024, Great Wall Motors achieved revenue of RMB 202.195 billion, a year-on-year increase of 16.73%; a profit of RMB 12.692 billion, up 80.73% year-on-year; and a net cash flow from operating activities of RMB 27.783 billion, a 56.49% year-on-year increase.

02 Users Ultimately Pay for Durability

Simply competing on price and blindly pursuing cheapness can lead manufacturers to take risks, cut corners, and commit financial fraud. The direct consequence is a proliferation of product flaws, severely damaging user rights and interests and threatening industrial security.

For instance, a new energy automaker falsely advertised its driving range, which shrank by 40% during actual testing, prompting a collective rights protection campaign by car owners. Another new player "sold 30,000 units but recalled 28,000 units." To boost rankings and create momentum, an independent brand concealed that a new car had already been contracted to a third party and purchased compulsory traffic insurance, suspected of reselling already insured vehicles...

Faced with this, Wei Jianjun bluntly stated, "When falsehoods and lies permeate a society, it certainly won't develop healthily. Great Wall Motors has always adhered to the principle of honesty first, practicing honesty and credit towards the country, society, and users."

Simultaneously, he publicly questioned the one-sidedness of various rankings and under-the-table manipulations, calling for the publication of multidimensional criteria such as complaint rates and tax payments. He exposed issues of substandard emissions from competitors and refused to compromise.

In Wei Jianjun's view, cars are bulk consumer goods, not fast-moving consumer goods. "Users ultimately pay for durability."

Great Wall Motors adheres to a truth-seeking and realistic attitude, following the principle of targeted efforts. It spends money where it should be spent, focusing on the right "targets" to compete.

When the industry was obsessed with stacking lidar, refrigerators, sofas, and large TVs, Great Wall Motors allocated a significant portion of its RMB 9.8 billion in R&D funds to "invisible quality" aspects like chassis rust-proof technology and the proportion of high-strength steel in the vehicle body.

At Great Wall Motors' technical centers and production bases across various locations, engineers diligently study how to increase the torsional stiffness of vehicle body welds by 5% and how to make the chassis rust-proof coating resist 300 hours of salt fog corrosion.

According to Jie Dian Finance, many indicators of Great Wall Motors exceed national mandatory standards: the A-pillar strength reaches 1500MPa-2000MPa, compared to the national standard of 900MPa-1500MPa; the roof compression resistance is generally more than four times the national standard, which is 3.0 times the curb weight of the entire vehicle or 45.0kN (whichever is smaller); the new 2025 national standard requires that the battery provide an alarm signal and not ignite or explode after a single cell thermal runaway, whereas Great Wall Motors adopts a multi-channel directional exhaust design that can quickly exhaust high-temperature gas even if an internal cell undergoes thermal runaway, preventing thermal diffusion...

Such examples abound.

Actions speak louder than words. Users always give objective judgments and vote with their wallets.

Great Wall Motors' complaint rate is far lower than the industry average of 21.3%.

In the J.D. Power 2023 China Vehicle Dependability Study (VDS) report, Great Wall Motors ranked first among independent brands with 135 PP100 (problems per 100 vehicles).

The China Automobile Dealers Association confirmed that Great Wall Motors' three-year average resale value rate is 8-15 percentage points higher than that of new forces. In the used car market, the Tank series leads with a three-year average resale value rate of 61.53%.

In 2024, Great Wall Motors' revenue per vehicle was RMB 163,800, an increase of RMB 23,000 from 2023; the gross margin was 19.51%, up 1.36 percentage points year-on-year, driving the profit per vehicle to RMB 10,300, earning RMB 4,600 more than in 2023.

03 Is the Industry Embracing an "Awakening Moment"?

Burying your head in the sand won't truly avoid danger; covering your ears won't silence the ringing bell.

When the "pearl of industry" is lost in disorder, chaos, and vanity, we need a torchbearer who dares to pierce through the clouds and fog.

Admittedly, Wei Jianjun's frequent voicing of opinions has sparked considerable public controversy, with some accusing him of "destroying the harmonious atmosphere." However, it is undeniable that this has, to a large extent, pushed the industry out of misconceptions like "sales volume supremacy" and "overtaking on curves," ushering in an "awakening moment."

Now, more and more automakers realize that "price wars" are unsustainable, and the "bleeding" approach is a mere band-aid. Only by returning to the essence of business and the original intention of car manufacturing, leveraging the "spear" of value to pierce the "shield" of the market, can one move steadily and achieve long-term success. Everyone has also started unconsciously discussing quality, product control, and user experience.

How to achieve this specifically? Wei Jianjun, with 35 years of experience in making cars, has already set an example. He is neither arrogant nor self-deprecating but calmly cultivates internal strength.

On one hand, with the positioning and vision of a "greater self" embodying great ideals, responsibilities, and patterns, he embraces all rivers and humbly learns from masters.

Wei Jianjun once candidly stated, "Our products have a 'label' in users' minds – sturdy and durable, but compared with foreign products, there is still a gap."

When encountering better competitors, Great Wall Motors upholds the spirit of learning from others' strengths and offsetting one's weaknesses. It lowers its posture, absorbs the essence from excellent predecessors, and complements resources, such as partnering with BMW, collaborating with the Emil Frey Group and Inchcape, etc., to seek maximum efficiency and benefits.

Jie Dian Finance learned that the "talent pool" at the Great Wall Motors Technology Center comprises over 10,000 people, including a team of nearly 100 foreign experts from countries like Europe, America, Japan, and South Korea.

Respecting causes and consequences lays the foundation for Great Wall Motors to go abroad, integrate into the world, and expand its growth radius.

On the other hand, relying on its own endowments and efforts, it strives for self-reliance to avoid being "choked." Gradually, it has built a closed loop from source materials (photovoltaics, solar energy, hydrogen energy, etc.) → core components (internal combustion engines, motors, batteries, chips, etc.) → software and hardware (algorithms, intelligent driving, intelligent cabins, etc.), forming a highly synergistic and energy-recyclable ecological barrier that covers all automotive power forms such as gasoline, diesel, hybrid, pure electric, and extended range.

The vigorous growth of enterprises cannot be separated from the technical support behind them. Great Wall Motors' patent count continues to lead the industry.

On the 2023 global automotive patent big data platform ranking, Great Wall Holdings ranked first among Chinese private automaker groups for three consecutive years with 6,888 patent publications and 4,665 patent grants.

In the field of new energy vehicles, Great Wall Holdings ranked first among Chinese automakers for three consecutive years with 1,838 patent publications and 1,375 patent grants.

Daily progress leads to an endless journey, and hard work eventually pays off. In 2024, Great Wall Motors' overseas sales reached 454,100 units, a year-on-year increase of 44.61%, with the proportion of total sales expanding to 36.8%, close to 40%.

This reflects that Great Wall Motors' hard power and localized operational capabilities have been widely recognized, and its influence in the international market is accelerating.

Written at the end

The veteran is not old and remains at the forefront.

Refusing short-term revelry and resolutely defending order, Wei Jianjun's "sober perspective" tears away the veil of the industry's "inward-spiraling competition," dropping a thought nuclear bomb at the level of industrial governance.

When the sharp sword of regulation meets an "enlightened" industry, it also means Wei Jianjun's cries have finally been heard echoing. This multi-year "fever" in China's auto industry is subtly showing signs of "cooling down" and moving towards a healthy and orderly track.

*The title image is generated by AI