Great Wall says sales of delayed H8 vehicle may resume in Jan
Updated: 2014-09-20 06:44
By Bloomberg(HK Edition)
Great Wall Motor Co, which halted sales of the Haval H8 sport utility vehicle (SUV) twice this year, may resume deliveries of its flagship vehicle in 2015, Chairman Wei Jianjun said, following which the stock rose.
The H8 may come out in January at the earliest, Wei said on Friday in response to Bloomberg queries after a media briefing in the mainland province of Hebei. Great Wall is working with German parts maker ZF Friedrichshafen AG in tackling an issue involving the H8's rear axle, a task that requires several rounds of modifications, he said.
Great Wall shares are headed for their worst year since 2008 after the company repeatedly delayed the introduction of the vehicle, the company's first SUV priced in the 200,000 yuan ($32,570) plus segment that's dominated by foreign brands. The delays, which occurred because of quality concerns, undermined the mainland automaker's credibility over its ability to move beyond making cheap vehicles.
"This is a car that people are looking forward to, it's a symbolic car for the company," said Yang Song, a Hong Kong-based analyst at Barclays Plc. "People have been waiting to see what they can do in the higher-end SUV segment."
Shares of Great Wall rose 1.7 percent to close at HK$32.25 in Hong Kong, reversing earlier declines. Its Shanghai-traded stock also advanced from an earlier drop.
The company isn't looking to add more sedan models in the immediate future, Wei told reporters. Great Wall will ensure that any more vehicles it introduces will be "in line with international standards and competitive," he said.
Monthly sales of the company's H6 SUV are expected to exceed 30,000 units, Wei also said. The company delivered 25,709 units of the model in August, according to Great Wall.
The Haval remains the best-selling SUV line in mainland, with 32,800 deliveries in August, according to data from the China Association of Automobile Manufacturers.
Great Wall's shares had plummeted 17 percent on May 9, the most in more than five years, after the carmaker suspended sales of the H8 for the second time this year. Customers had reported hearing "knocking noises" in the transmission system when driving at high speeds, and sales of the vehicle wouldn't resume until it is deemed to be built to a "premium standard," the company said at the time.
The introduction of the H8, Great Wall's most expensive SUV, was first halted in January after the auto press panned the vehicle in test drives, leading to a 12 percent slump in the company's shares the following day.
Great Wall this year declined 25 percent, compared with a 4.6 percent gain for the benchmark Hang Seng Index. The stock had surged about 40-fold in the five years through 2013 as the company's knack for keeping costs low helped it generate wider profit margins than any other listed automaker worldwide.
(HK Edition 09/20/2014 page6)