From Hilux to Highlife – The Great Wall Story Part Two

Share Our Knowledge With Your Friends, Contacts And Co-Workers

Read part one here.

On March 5th 1996 the first Great Wall Deer pick up truck came down the production lines, with its engine sourced from Minyang Xinchen engine factory and its transmission from Tangshan Gearing company, Great Wall was able to squash pricing into the psychologically important 60,000RMB to 70,000RMB price barrier putting it far below competitors who were selling their own vehicles for around 100,000RMB. Great Wall also pushed its products into areas where private business were booming; Shandong, Zhejiang, Jiangsu, Fujian and Guangdong where the Deer received large sales figures. Wei Jian Jun’s high volume, low price strategy had paid off in its first outing.

Great Wall produced the Deer in as many combinations as they could, long bed, short bed, twin cab, single cab, etc with seven variants in total. By 1997 Great Wall had sold 1700 units and set up 200 sales and service centers across China. In October that year, the first Deer’s were exported to the Middle East, becoming the first Chinese cars to be exported.

Greatwall exports From Hilux to Highlife   The Great Wall Story Part Two

Deer’s heading East

Great Wall have been exporting cars for over 16 years with sales happening in every continent except for North America, Wei believes that North America will be a target in the next generation of vehicles which includes mid size and full size trucks that come with what North American’s desire, such as automatic gearboxes and larger displacement engines.

In 1998 Deer sales and production breached the 7000 units mark, the best selling truck in the Chinese market, and also the biggest auto export from China selling over 700,000 units in total. In 2012 Great Wall sold 136,694 pick up trucks in China, taking 32.81% of the market.

Whilst Great Wall grew at an amazing rate, so did Nanxiang Government’s investment in the fledgling company, they reaped a 200% return on their investment which netted them 19.87% of the company to begin with, in addition under the 1994 agreement with Wei they received 10% tax each year netting them over 2.14 million RMB – not a small sum for a county government in the mid 90′s. In this year, Wei’s 5.48% share in Great Wall was boosted to 25% of the company.

Under a new agreement Nanxiang would take 65% of the company, Wei would take 25% and the remaining 10% would be split between employees that had made notable contributions to the company via the company union. This agreement paved the way for Great Wall Industry Company to changing its name to Great Wall Automobile Limited, with a registered capital of 390 million RMB, Great Wall Auto was officially born.

In May 1999, Baoding’s Tian Ye Auto – a state owned automotive company went into a period of economic uncertainty which led to it nearly closing down. Under a plan put forward by Baoding Government, Tianye would be merged into Great Wall, but when the bosses of Tian Ye met with Wei agreements couldn’t be reached, further meetings would be made further down the road but again no deal was sealed. Nan Xiang’s funds were depleting fast, they sold 21% of Great Wall Auto to Wei for a mere 8 million RMB, giving Wei 46% control of the company and the major shareholder (Nan Yuan would remain 44%, and the union 10%), effectively putting Great Wall into private ownership.

1999 was the year that the 10,000th Deer would rumble through Great Wall’s production line. At the same time Tianye had a shotgun wedding to a Shenyang based automotive company called Huachen Auto, which would later become Brilliance, this new company created Hebei Zhongxing Auto (ZX Auto). Wei was shocked and worried by this new competitor on his doorstep, at the same time his engines were sourced from Minyang XinChen Auto, of which HuaChen also had a majority share. Great Wall was suddenly at a disadvantage, the company could effectively be cut off from the market.

Huachen and Tianye were not meant to be, Huachen pulled out of the agreement leaving Tianye to talk with Wei once again. On Jan 18th 2000 Wei spent 80 million RMB to buy Gao Bei Dian State Owned Northern Auto Factory, creating Baoding Great Wall China Northern Factory in his wake.

Wei talked with two Baoding based businessman to develop a joint venture company. On June 18th 2000 Wei created the Great Wall Internal Combustion Company of which he took 51%. The new company brought in technology from Germany, America and Japan with the aim of creating Great Wall’s own engine range and thus developing core technologies, which was the aim of the central government at the time. The engine factory was a great success and made its first profit in record time, and according to Great Wall legend, received orders from a certain Changchun based automaker who was more than interested in Great Wall’s technology.

Wei was not happy with the supply chain situation within the baby Great Wall, he looked to his fathers Tai Hang Group to develop a production line that was capable of producing engines, car bodies, suspension, interiors and air conditioners etc. The new partnership with Taihang Group met that Wei took 51% of the company, with explicit rules that the new company would first settle Great Wall’s demand, and then sell its excess produce to external markets. Wei was serious about developing and expanding his supply chain.

The union with its 10% shares would move to liquidate its offerings in 2001, giving 9% to Wei’s family, 0.5% to his mother and 0.5% to his wife for just under 150 million in total, this would be spread out amongst employees. This would give Wei and his family a 56% share in Great Wall, and again it brought about a name change to Great Wall Motor Company Limited, with a registered capital of 1.75 billion RMB.

Great wall Sailor truck From Hilux to Highlife   The Great Wall Story Part Two

The Sailor arrives

Another pick up would emerge in November 2001, the Sailor or Sai Ling in Chinese. The Sai Ling was based off the Isuzu truck created under license and used a 4JB1 diesel engine and also Great Wall’s own first multi point injection gasoline engine. The Sai Ling was priced higher than the Deer in the 60,000-80,000RMB segment. With new products, Great Wall’s spot in the Chinese truck market was further cemented in place.

 

About the author  ⁄ Ash

China Car Times is the number one portal for the latest information, statistics, and industry information on the Chinese automotive industry. Over the past six years of operation we have seen the Chinese auto market grow from a backwater of old European models to the world's largest auto market with the world's leading technology being delivered here first. You can connect with China Car Times founder and Editor Ash Sutcliffe by clicking on the Linkedin logo, you can also follow us on Twitter, Facebook and Google Plus via the relevant icons

2 Comments

  • dragin
    December 19, 2013

    An interesting history of Great Wall , but this account is a bit rough around the edges…..

  • Ash Author
    December 20, 2013

    Agreed, but the next one will be more awesome.

Leave a Comment

See News by Industry
Industry News China Green Auto News Spy Shots China Auto Culture
See News By Brand
Acura China Acura China Aston Martin China Aston Martin Audi China,FAW-Audi Audi China
Baojun Auto Baojun Beijing Auto Beijing Auto Group Beijing Auto Beijing Auto
Besturn Auto, FAW Besturn Besturn BMW China BMW China Brilliance Auto Brilliance Auto
Buick China Buick China Baojun Auto BYD Baojun Auto Cadillac
Changa,Chang'an Chang'an - Chana Changfeng Changfeng Changhe Auto Changhe
Chery Auto Chery Chevrolet China Chevrolet Chevrolet China Chrysler
Citroen China Citroen Dodge China Dodge Dodge China Citroen DS
Dongfeng Auto Dongfeng Geely Emgrand Emgrand Geely Emgrand Englon
FAW,First Automobile Works FAW Ferrari China Ferrari Fiat China Fiat
Foday Auto Foday Ford China,Changan-Ford Ford Guangzhou Auto Guangzhou Auto
Geely Auto Geely Geely Auto Gleagle GoNow Auto GoNow
Great Wall Great Wall Hafei Auto Hafei Haima Haima
Hawtai Hawtai Honda Honda Huanghai Yellow Sea Auto Huanghai (Yellow Sea)
Hyundai China Hyundai Infiniti China Infiniti JAC China JAC
Jaguar Jaguar Jinbei Jinbei JMC JMC
Kia Kia     Jaguar Land Rover
Landwind Landwind Lexus China Lexus Lifan Auto Lifan
Lincoln Lincoln Youngman Lotus Youngman Lotus Luxgen Luxgen
Mazda Mazda Mercedes China Mercedes MG - Morris Garages MG
MINI China MINI Mitsubishi China Mitsubishi Nissan China Nissan
Opel China Opel Opel China Peugeot Reely China Reely
Renault Riich Riich Riich Roewe
Rolls-Royce China Rolls-Royce SEAT SEAT Senova Senova/ShenBao
Double Ring Double Ring - Shuang Huan Sichuan Yema Sichuan Yema Skoda Skoda
Double Ring Smart Subaru Subaru Suzuki Suzuki
Toyota Toyota Volvo Volvo Volkswagen Volkswagen
Zotye Zotye   Others    
Close
Sign up today to receive China Car Times weekly newsletter!
Your name
Your email