Great Wall Executive’s Comments on Price War Trigger a "Verbal Battle"

TMTPOST--"Some say competition in the automotive industry is like playing cards on the table. You choose whether to play based on your strength, pass if you can't keep up, and wait for the next round. But if someone cheats, we must sound the alarm, stand up, even flip the table," said Li Ruifeng, Chief Growth Officer (CGO) of Great Wall Motors at the launch of the all-new Haval H6, sparking intense discussions in the auto industry.

Emphasizing the need to uphold bottom lines and integrity, Li stressed the importance of creating the highest-quality Chinese automotive brand. While he didn't specify who might be cheating or who would flip the table, his remarks were quite thought-provoking.

Recently, discussions about the car price war have once again become heated.

During the 2024 China Auto Forum, prominent figures such as the CEOs of Li Auto and BYD expressed their views on China’s competitive car market. Their perspectives varied, with some embracing "involution" while others called for a level-headed approach. Involution is a term in anthropology, which refers to a phenomenon where a society becomes very complex and competitive internally but fails to expand its economy.

Li acknowledged that competition is normal but stressed it must be fair and legal. He pointed out that current competition, exemplified by price wars, reveal the true nature of cheating, disorder and self-harming.

He cautioned, "Under the guise of lowering prices, some companies are cutting corners on technology, quality, service, and operational ecology. Beneath the low prices lies no real substance."

Li also highlighted concerns about the seriousness of issues was reflected in insurance costs. He noted that insurance premiums for some domestic A-class cars exceed those for joint-venture B-class cars, due to frequent breakdowns, high repair costs, and overall rising costs of ownership.

He argued that while consumers might initially benefit from lower prices, they would ultimately pay a higher price in the long run.

Li's stance against "involution" in the industry aligns with voices like those of GAC Group Chairman Zeng Qinghong and Geely Holding Group Chairman Li Shufu.

In contrast, BYD Chairman and President Wang Chuanfu and Changan Automobile Chairman Zhu Huarong have actively embraced the concept of "involution," viewing it as a normal trend in the industry.

The debate among industry leaders reflected unprecedented competitiveness in the Chinese car market. The focus of the competition has shifted from aspects like pricing and technology even to the number of an automaker executives’ followers on social media.

Amidst the buzz of public opinion, the increasingly commercialized marketing strategies have left many automotive tycoons feeling confused.

The marketing reform initiated by Great Wall this year, starting with criticisms of Haval H6's strategy by Chairman Wei Jianjun, underscores the brand's need to overhaul its marketing approach.

Despite advancements in Haval H6's technology, the failure to effectively communicate the product’s highlights through marketing strategies has impacted market perception. Previous marketing efforts exposed shortcomings within Great Wall's marketing team.

The shift towards a new marketing approach under Wei's guidance signals a determined effort by Great Wall. However, some critics argue that this forward movement is predominantly driven by Wei himself.

The automotive sector's heated discussions on "involution" continue to escalate, revealing underlying challenges and opportunities for industry players. As Great Wall Motors navigates these challenges, the outcome of their efforts to revive Haval H6 remains uncertain, showing the complexities of competing in China's rapidly evolving automotive market.