BEIJING -- China's top truck maker, Great Wall Motor, is not willing to enter a price war as industry sales slide further because of the coronavirus epidemic but will keep trying to develop overseas markets, its chairman said.
"Great Wall does not want to enter a price war in the market slowdown because price represents brand value," Wei Jianjun, chairman of Great Wall, one of the biggest SUV makers in China, told a conference.
"Blindly occupying the market with price cuts will hurt the brand, especially when automakers' cash flow cannot be fully guaranteed," Wei said, according to a transcript provided by Great Wall.
"We are now adjusting the production cycle and slowing it down,” he said. “If production causes a large backlog of products, it will not be good for the entire operation."
Great Wall was among the first major automakers to cut vehicle prices in late 2018, when China's market, the world's biggest, started to drop. However, since 2019, Great Wall has slowly dialed back the aggressive pricing strategy to regain profit.
The Baoding-based automaker, which is also building a car plant with BMW in China’s eastern province of Jiangsu, has cut its 2020 sales target by 8 percent to 1.02 million units and profit target by 14 percent to 4.05 billion yuan.
Rival state-owned automaker GAC, which has joint ventures with Toyota and Honda, also lowered its 2020 sales target from 8 percent growth to 3 percent.
Great Wall sold 1.06 million light vehicles last year. In February, in the midst of the coronavirus outbreak, sales totaled 10,023, down 86 percent from a year earlier, while the overall market dropped 79 percent.
An official at China Association of Automobile Manufacturers told Reuters that if the outbreak in China is effectively contained before April, the market could shrink around 5 percent for the whole year.
Great Wall agreed to buy two plants in India and Thailand from General Motors earlier this year as the Detroit automaker retreats from unprofitable markets.
Wei said Great Wall considered entering Indian and Thai markets around seven years ago but did not move forward because the company was not ready. Great Wall now expects transactions of both plants to be completed in the second half of 2020 and will revamp production lines to make its own models.