The Chinese company Great Wall Motor (GWM), which has been well promoted in Russia thanks to its crossovers, SUVs and pickups, feels insecure in Europe due to weak sales in the electric vehicle segment and difficulties adapting to local management traditions. Last year GWM intended to build its own plant in Europe, and this week it suddenly announced that it was closing its local head office in Munich (Germany).
“Electric cars” are not the strongest side of GWM’s business; its only electric car brand Ora is losing ground even in its homeland: in the first four months of this year, according to CAAM, 14,755 Ora cars were sold in China, which is 26.3% less sales in January-April 2023.
GWM opened its European headquarters in Munich in 2021, sales began in 2023, the debut model was the pop-eyed electric hatchback Ora Funky Cat, and was later joined by two Wey plug-in hybrid crossovers — Coffee 01 and Coffee 02. In November 2023 GWM announced rebranding in Europe: the Ora and Wey brands were demoted to sub-brands, their models began to be sold under the single GWM brand, the Ora Funky Cat hatchback was renamed GWM Ora 03, Wey Coffee 01 — into GWM Wey 05, Wey Coffee 02 — in GWM Wey 03. In Russia, by the way, Ora Funky Cat has been officially sold since last fall as Ora 03, that is, still under its own brand, and not the mother brand. Wey crossovers are also sold under their own brand, but with digital indices, as in Europe.
Current GWM range in Europe: GWM Ora 03 (left), GWM Wey 05 (center) and GWM Wey 03 (right)
Last year, according to the analytical agency JATO Dynamics, the Ora Funky Cat/GWM Ora 03 hatchback sold 6,237 units in Europe, and the combined sales of the two Wey crossovers amounted to 82 units. In the first quarter of this year, GWM Ora 03 was sold in Europe in the amount of 918 units, the Wey sub-brand sold 201 cars. For comparison, let's say that sales of the MG 4 electric hatchback in January-March of this year in Europe amounted to 13,628 units. (British brand MG, we recall, belongs to the Chinese automaker SAIC), electric hatchback BYD Dolphin — 1778 units.
European media reported this week that GWM has decided to dissolve its European headquarters, which will close on August 31. The management of the Chinese company explains this decision by the global slowdown in demand for electric vehicles and the high risk of introducing protective duties on Chinese electric vehicles in Europe.
The German magazine auto motor und sport presented the news of the closure of GWM's Munich office as almost a complete capitulation of the Chinese company in Europe, while Automotive News Europe reports that GWM will still continue to operate in Europe, but this work will be supervised directly from China. Moreover, a GWM representative who spoke to Automotive News Europe said that the company's intention to build a plant in Europe remains in force, with potential sites in Germany, Hungary and the Czech Republic being considered. Note that BYD is already building its own plant in Hungary, it should start operating in the second half of 2025.
If the GWM plant in Europe is built, it is not very clear how it will work without an official representative office — perhaps the representative office, as they say, will be recreated. The fact is that in the Munich office, as the Frankfurter Allgemeine Zeitung newspaper reports, there is an unhealthy atmosphere, Chinese and German management cultures do not fit well together, the Chinese treat German colleagues very rudely, and conflicts arise. It's possible that the new headquarters, if it comes to fruition, will be made up primarily of expats who don't have to get used to the Chinese leadership style.
In light of faltering sales in the electric vehicle segment, GWM is also considering exporting conventional vehicles to Europe. models with internal combustion engines, which will not be subject to potential protective duties. In general, GWM is not leaving Europe, but simply adapting.
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