Recently, Wei Jianjun, Chairman of Great Wall Motors, stated in an interview with Sina Finance the problems faced by the automotive industry in its development so far. In his view, the automobile industry is a key pillar industry for China's development and support, and we cannot let so many years of hard work go to waste just because of excessive capital manipulation

Undoubtedly, the Chinese automotive industry has achieved significant success in both production and sales exceeding 30 million vehicles, as well as in the transformation of new energy and export volume. The entire industry is immersed in the frenzy of scale and development speed. However, under the excessive influence of capital, the phenomenon of deliberately or even maliciously pursuing market value and raising stock prices has become frequent, leading to problems such as overinvestment, vicious competition, or resource misallocation in the industry, which in turn amplifies the profitability of car companies and even poses unprecedented threats to industry safety.

Among them, the problem of insufficient profitability is one of the key hidden concerns behind the prosperity of the industry. Data shows that in 2024, the total profit of 18 listed car companies in China was only 48.8 billion yuan, while Toyota's net profit was as high as 125.3 billion yuan. This gap not only reflects the disadvantage of Chinese car companies in global competition, but also exposes deep-seated problems in industry development.

There is too much chaos in the industry and too little Wei Jianjun

In addition to insufficient profitability, the Chinese automotive industry has experienced a severe period of pain due to price wars, supply-demand imbalances, and industrial transformation impacts. In the first eight months of 2024, the industry's retail losses reached 138 billion yuan, with an average of 10 dealers closing down daily, and the supply chain being squeezed below the cost line, reflecting the deep-seated structural contradictions in the industry.

Faced with the chaos and false prosperity in the industry, as a witness to the reform and opening up, and also a witness to the development of the automotive industry to prosperity, Wei Jianjun, who has been engaged in the automotive industry for 35 years, has spoken out with righteousness like a sharp knife, cutting open the hidden pain beneath the glamorous surface in the hustle and bustle of the automotive industry.

The hidden worries behind the prosperity of the industry

In recent years, while the Chinese automotive industry has rapidly expanded, it has also been caught in multiple chaotic situations such as price wars, capital wars, and public opinion wars. These phenomena not only exacerbate the short-term pains of the industry, but also pose systematic challenges to its long-term development.

In 2024, over 200 car models in the Chinese auto market will actively or forcibly engage in price wars, resulting in an average price reduction of 9.2% per vehicle, leading to a serious decline in the industry's profit margins. Intense competition forces car companies to sacrifice profits in exchange for market share, with some new energy brands losing nearly 40000 yuan for every car sold. Even the net profit of top companies' bicycles has dropped to less than 10000 yuan.

When a snow mountain collapses, not a single snowflake is innocent. In 2024, the total profit of 18 listed car companies in China was only 48.8 billion yuan, less than 40% of Toyota's, and the median gross profit margin dropped to 10.53%, far below the level of international car companies of more than 15%.

Meanwhile, as capital continues to enter the field of new energy vehicles, the utilization rate of automobile production capacity in 2024 will be less than 50%, but there are still new players blindly expanding production. Some enterprises' factory capacity utilization rate is less than 30%, and the pressure of fixed cost allocation intensifies losses. Under the short-term profit oriented capital, the structure of R&D investment is imbalanced, and more and more R&D expenses are flowing towards intelligent iteration rather than underlying technology.

There is too much chaos in the industry and too little Wei Jianjun

In addition, some car companies frequently exaggerate technical parameters and even use "black PR" to maliciously attack opponents in order to compete for traffic. One of the car models had a discrepancy of 30% between their advertised fuel consumption and actual data, which led to collective complaints from consumers. Such behavior not only misleads users and affects their actual driving experience, but also leads to more and more consumers questioning brand value.

From price wars to capital wars, to public opinion wars and many other industry chaos, it has led to a decline in the profitability of enterprises, a decrease in product quality, damage to brand image, and poor user reputation, all of which are attached to the body of the industry and seriously affect the healthy development of the automotive industry.

Faced with chaos, Wei Jianjun knew deeply that the false beauty deliberately woven by the car circle must be broken.

So, he refused to remain silent and used "seeking truth" as a blade to expose the essence of the problem. He deeply analyzed the growth pains faced by the Chinese automotive industry and proposed systematic reflection and solutions from three dimensions: national policy determination, over capitalization crisis, and industry disruption. He called for the industry to return to rational competition and high-quality development.

In terms of national policy determination, in order to curb internal competition and reshape the competitive order, Wei Jianjun repeatedly criticized the vicious competition in the industry. One aspect of the industry's so-called healthy development is to replace the "sales only theory" with a multidimensional evaluation system.

There is too much chaos in the industry and too little Wei Jianjun

Earlier, Wei Jianjun criticized the industry for overly relying on sales rankings and advocated for a comprehensive evaluation of a company's health based on indicators such as quality complaint rate, tax contribution, and research and development investment. He bluntly stated that he would rather have sales fall out of the top ten than pursue meaningless numbers, emphasizing that companies need to shift from "scale expansion" to "value creation".

Meanwhile, Wei Jianjun emphasized the importance of industry auditing. He called on government departments to conduct audits of the entire industry, even stating that "audit fees are covered by the Great Wall", in order to expose financial fraud, false production capacity, cutting corners and other irregularities, and eliminate non compliant enterprises.

In addition, Wei Jianjun also denounced excessive capital intervention that led to the industry falling into a "false prosperity". He pointed out that some car companies in the industry rely on capital injections and their business models are unsustainable. At the same time, under the influence of excessive capital, some car companies have lowered their prices beyond the cost compression limit in order to "recoup their losses", resulting in product quality hazards, battery shrinkage, downgraded car infotainment systems, and even frequent after-sales chaos such as "zero kilometer used cars".

This approach, while affirming policy guidance, warns against short-term behaviors such as capital carrying risks and low-priced competition, which can cause deep damage to China's automotive ecosystem. It confirms his emphasis on "seeking truth", which means following industry laws, adhering to healthy development of the industry, facing global competition, and drawing a lightning bolt of survival for the healthy development of China's automotive industry.

There is too much chaos in the industry and too little Wei Jianjun

Building a car is a marathon, steady driving is the key to achieving great success.

Wei Jianjun's criticism and advice directly point out the core contradiction of China's automobile industry's transformation from "wild growth" to "high-quality development". Its proposition is not only a correction of industry chaos, but also a response to national strategy - only through technological autonomy, ecological coordination, and policy norms can we achieve a leap from "price strangulation" to "value creation".

Shoot at false prosperity

Wei Jianjun dared to speak out, but never spoke recklessly.

As a "sober minded person" in the Chinese automotive industry, Wei Jianjun has repeatedly caused industry shock in recent years with his precise judgment and outspokenness. He not only reveals the chaos in the industry, but is also gradually validated by policy trends and industry realities, demonstrating his profound insight into industry laws.

Among them, regarding industry competition, Wei Jianjun has publicly criticized industry competition multiple times. He believes that vicious price wars and low-quality competition will lead to the collapse of industry chain profits, enterprise allocation and cost reduction, ultimately damaging consumer interests and industry reputation.

A few days ago, the National Development and Reform Commission issued a statement to rectify internal competition by adhering to innovation leadership, strengthening local constraints, optimizing industrial layout, and strengthening market supervision, once again confirming Wei Jianjun's accurate judgment on China's automotive development path, business model, and industry issues. Wei Jianjun pointed out that the recent systematic rectification of "internal competition" by the top management is a key signal of the industry's shift.

There is too much chaos in the industry and too little Wei Jianjun

Wei Jianjun said so and did so, which is naturally reflected in his management of Great Wall Motors.

Throughout its history, with the principle of long termism and strong strategic determination, Great Wall Motors has adhered to self generating management and healthy development, leading 140000 employees to do a good job in management, self-reliance and self-improvement, and continuously improving its profitability and brand.

In 2024, Great Wall Motors achieved significant profit growth in the fierce industry competition, and its development path indeed presents the characteristic of "focusing on quality rather than just sales". The core logic of this strategic adjustment lies in optimizing product structure, strengthening high-value market layout, deepening globalization strategy, and adhering to long-term technological investment.

Endow oneself with the concept of industry insight in the development of Great Wall Motors and greatly benefited. This is because Wei Jianjun saw the overall damage caused by malicious internal competition to the upstream and downstream of the industrial chain. Therefore, in the current malicious internal competition environment, he has repeatedly expressed regret and spoken out for the living conditions of Chinese car enthusiasts, and has repeatedly stood up for consumers' right to know.

It is worth mentioning that Wei Jianjun dared to explain the real situation in the industry, issued enlightening words to dispel the industry fog, and escorted the development of the industry. This move is not only a voice for Chinese car enthusiasts who are deeply affected by chaos, but also a defense of the bottom line of "Made in China". It is also aimed at promoting the high-quality transition of Chinese cars from "bloated scale" to "global competitiveness".

There is too much chaos in the industry and too little Wei Jianjun

From surpassing Germany in 2022 to becoming the world's second largest automobile exporter, with exports reaching 5.22 million vehicles by 2023, breaking Japan's seven year streak of being the world's largest automobile exporter. During this period, whether in terms of the proportion of sales data, export volume, or its significance to the industry, the continuous breakthroughs in going global not only consolidated China's position as the world's number one automobile exporting country, but also became an important driving force for promoting the growth of automobile production and sales.

From quality breakthrough to reputation breakthrough, China's automobile industry is currently thriving and facing the global market. It is time for Chinese automobiles to shed the hat of low-end backwardness. At this critical period, in Wei Jianjun's view, "driving the overseas automobile market requires abiding by laws and regulations and maintaining integrity", and cannot affect the global image of Chinese automobiles due to industry chaos.

So, we see that whether it is daring to speak out, practicing the long termism of Great Wall Motors, or caring about China's automobile going global... Wei Jianjun, standing in the eyes of the industry storm, does not lose direction, does not follow the crowd, is not bound by capital, always remains clear headed and alert, and watches over the healthy development of China's automobile industry. He is a truly sober car company owner.

To outsiders, Wei Jianjun, who spoke frankly, was a lonely pioneer. Because while peers are chasing sales myths in the frenzy of traffic, and "bloodletting price cuts" have become the norm in the industry, he still insists on "high-quality market share". This belief stems from his reverence for car manufacturing - cars are not fast-moving consumer goods, but a responsibility loop that carries the safety of users' lives.

There is too much chaos in the industry and too little Wei Jianjun

But Wei Jianjun was not alone.

His shout is awakening resonance among more peers: central policies frequently target "internal competition", when the "zombie car graveyard" piles up like a mountain, confirming his prediction that "second-hand cars are like scrap metal", when the host factory collapses and consumers have no way to after-sales, those consumers who have been hurt by industry chaos gradually understand that the true guardians are never the bottom line carnivores, but people like Wei Jianjun who are willing to ignite torches and find a way out in the cold winter.

And for the better development of the industry, it is obviously necessary for more Wei Jianjun to dare to stand up and use a critical perspective to tear apart the chaos in the industry, bringing clear thinking to the global competition of Chinese automobiles.