Great Wall Motors (GWM), a leading Chinese sport-utility vehicle (SUV) and pickup truck company, is exploring entry into the Korean market. As domestic sales in China weaken and it seeks a breakthrough overseas, it has picked Korea—where 6 out of 10 new cars are SUVs—as a new revenue source.
According to the imported car industry on the 1st, GWM is currently searching for a marketing head to launch the brand in Korea. GWM was said to have told candidates that it is in a strategic phase preparing to enter Korea and is actively working to expand into the market.
Founded in 1984, GWM is a Chinese finished vehicle company specialized in SUVs and pickup trucks. It owns five brands: ▲ urban SUV "Haval" ▲ off-road SUV "Tank" ▲ urban EV "Ora" ▲ premium SUV "Wey" ▲ pickup truck "Poer." In the first half of this year, it sold a total of 575,800 units and posted revenue of 102.1 billion yuan (about 20.6 trillion won). Among Chinese automaking corporations, only five, including GWM, surpassed 100 billion yuan in first-half revenue.
Behind GWM's push into Korea is sluggish domestic demand in China. According to the China Association of Automobile Manufacturers (CAAM), first-half passenger car sales in China were 8,288,000 units, down 24.3% from a year earlier. A Korean auto parts company official operating in China said, "The consumer mood for cars is troubling, and the profitability of major automaking corporations is falling rapidly," adding, "Local export competition to break through this is intense."
Accordingly, GWM has accelerated its overseas push this year. Its overseas sales in the first half rose 45.5% on-year to 289,000 units. For the first time since its founding, it outpaced domestic sales (286,700 units). Overseas revenue increased 56.8% to 56.288 billion yuan, accounting for 55.1% of total revenue, and its overseas dealer network grew by more than 200 this year alone to surpass 1,600.
GWM appears to have set its sights on Korea as a new breakthrough because of the high preference for SUVs. According to Kaizuyu Data Research Institute, SUVs accounted for 522,526 of newly registered passenger cars from January to July this year, or 58.1% of the total. Pickups also showed steady demand, with 15,129 units sold this year, up 2.6% from the same period a year earlier.
GWM is not the only Chinese automaker focusing on the Korean market. Zeekr, the premium EV brand of Geely Automobile Holdings, will soon launch the midsize electric SUV "7X." Another EV brand, Xpeng, is in the process of hiring a Korea business head, and Chery Automobile Co. is reviewing a brand launch, leveraging its strategic investment relationship with KG Mobility(003620). There is also steady talk of potential entries by Xiaomi and Nio.
If GWM ultimately enters Korea, price and sales network are likely to be the key factors for a successful landing. An imported car industry official said, "It will be difficult for GWM to compete as a premium brand, and under Hyundai Motor(005380) and Kia(000270), it will have to engage in low-price competition with KG Mobility, BYD, and others," adding, "It's worth watching how aggressively GWM will invest to expand its sales network, the biggest challenge for a new brand."