With new SUV delayed, Great Wall sales tumble

The market launch of the widely awaited Haval H8 SUV has been delayed twice this year. LU HANXIN/CHINA DAILY

Great Wall Motors saw its sales in the first six months fall 6 percent year-on-year, but some believe its prospects will brighten later this year.

Statistics show the Hebei-based automaker sold 347,000 vehicles in the first half, just 39 percent of the goal it set for 2014.

That is mainly due to its lackluster performance in the car segment. The company sold fewer than 57,000 cars in the first half compared to more than 113,000 in the same period last year.

The sales decline was in part due to the delayed launch of its much-anticipated Haval H8 SUV, said auto analyst Jia Xinguang in an interview with the newspaper Securities Daily.

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Dong Yang, secretary-general of the China Association of Automobile Manufacturers, said nothing appears wrong with the automaker's business operation as sales by many other Chinese brands also fell.

But "it is well known that Great Wall is good at SUVs but not cars", said Dong at the association's press conference in early July.

The automaker's Haval SUV sales in the first half grew 13 percent year-on-year. Among them Haval H6 surged 76 percent.

Haval was the most popular SUV brand in the first six months. Its sales totaled 171,700 units, over 40,000 more than the runner-up Volkswagen Tiguan.

Dong said that Great Wall spends 3 percent of its sales revenue on R&D while the average for Chinese brands is 2 percent.

Dong's optimism was shared by many financial institutions as some new SUV models are expected to hit the market in the second half of the year.

BCCOM International told Xinhua that the sales decrease was partly due to the absence of new models, so Great Wall's situation will improve later this year.

Analysts at Essence Securities said the new models will help boost the automaker's SUV sales while car sales are unlikely to fall further.

GF Securities believes Haval H6's sales will grow faster with Great Wall's plant in Tianjin expanding production capacity.

It added that long-term investors should not be too pessimistic about Great Wall's strategy for high-end products, but short-term investors should not have too high expectations for the Haval H8.

Great Wall's share price suffered heavily from the model's failure to hit the market as scheduled.

The automaker planned to roll it out in early 2014 but delayed its launch twice - in January and May - due to technical problems. No new timetable has been announced.