Great Wall net income tumbles as discounts, r&d outlays increase
Great Wall Motor Co., China's largest SUV maker, says its net profit for the first six months fell 51 percent year on year to 2.4 billion yuan ($636 million).
To shore up sales, Great Wall offered cash coupons and free maintenance service at a cost of 1 billion yuan. Despite the incentives, sales for the first six months increased only 2.3 percent to 460,743 vehicles.
The company also significantly increased its outlays to market its new Wey premium brand and strengthen its r&d capabilities.
At the Shanghai auto show in April, Great Wall launched sales of its first Wey-badged model, the VV7 compact crossover. Next month, the company plans to exhibit the VV7 and the smaller VV5 crossover at the Frankfurt auto show.
Because of higher discounts, Great Wall’s revenue in the first six months dipped 1.5 percent to 41 billion yuan.
This month, Great Wall confirmed to Automotive News its interest in buying the Jeep brand from Fiat Chrysler Automobiles. But Fiat Chrysler denied it had been approached by the Chinese company about Jeep or any other matter relating to its business.
Great Wall, headquartered in the north China city of Baoding, is listed in Shanghai and Hong Kong.