Since the dawn of the industry, automakers have wrestled with how to move upscale with their products, and now the first modern Chinese company to try it is getting a lesson in humility.
Great Wall's low-priced SUVs have been a big hit in China. As Bloomberg noted last week, Great Wall's stock price surged, its margins fattened beyond those of any Chinese automaker and the company's chairman even talked about outselling Jeep. But its ambitions to be China's first challenger to major foreign car brands have hit a snag.
Sales of the new Haval H8, Great Wall's first SUV priced in the 200,000 yuan ($32,000) segment that includes the Volkswagen Tiguan and Ford Kuga, were suspended indefinitely this month because of quality woes.
Vivien Chen, an analyst at Oriental Patron Financial Group in Hong Kong, wrote that the suspension "indicates domestic automakers haven't met requirements to upgrade to be a high-end vehicle maker."
In a May 9 statement, Great Wall said it halted sales of the H8 after customers reported hearing "knocking noises" in the transmission system when driving at high speeds.
Great Wall didn't try to sugarcoat the problem. In the statement, it said the situation "reflected the company's deficiencies in research and development as well as technical management of high-end products. As such, the company decided to further rectify Haval H8 which will not be launched unless it is of premium standard."