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There is a famous car company in my country called Great Wall Motors, which has produced many off-road vehicles and pickup trucks. The boss of the company is Wei Jianjun, who is an interesting person.

It’s not that he is humorous, but that as a boss, there are some aspects of Wei Jianjun that are worth studying.

What does sales prove? When the market is booming, sales can prove that the company has high turnover and a large market share. It has a good development momentum. However, when the market needs to be boosted or is not so good, sales can only prove high turnover and a large market share.

At this time, it cannot be said that the company's development momentum is good. In the past few years, the real estate industry has been developing rapidly. In the words of Chiang Kai-shek, it is full of vitality and still in front of us. The advantage is in our hands. Many companies have good sales. From Sunac to Evergrande, which one does not have a turnover of hundreds of millions of yuan?

However, we have to look at the profit margin. Evergrande's high turnover is accompanied by high costs for land acquisition, and it is betting on the premium of the land, rather than the profit of real estate development itself. Hong Kong has New World and Hutchison, which are also engaged in real estate, and their profits come from selling houses. Evergrande obviously does not follow this path.

Spend money to occupy the market, provide subsidies at low prices, and when the market becomes bigger and user stickiness increases, companies will raise prices. This is the usual way of doing things for Internet companies, but real industries cannot do this.

During the money-burning phase, takeout delivery companies can subsidize merchants and riders, and then subsidize users after subsidizing riders, because the consumption cycle of takeout delivery is only three to five days at most. If a meal cannot be finished in one go, it will be kept in the refrigerator and will have to be eaten within three to five days.

Therefore, by burning money to gain market share, they can quickly squeeze out other companies, then raise prices, cut off merchants and riders, and then cut off riders and users. However, the use cycle of any industrial product is calculated on a yearly basis.

If houses are sold as fast-moving consumer goods, and eventually there are problems with the quality of the houses, or if consumers spend a total price of one or two million to buy a house and eventually problems arise after living in it for twenty years, what will happen then?

Of course, Xu Jiayin has not thought about this problem. Twenty years later, Xu Jiayin no longer knows where to eat coriander chicken. He himself is also aware of this, so he doesn’t think about this matter. But what about consumers who buy houses?

Therefore, the real economy is never about sales volume, how much can be sold in a short period of time, but also about profits. How long can the enterprise survive?

For large-ticket items, how long a company can survive is much more important than how big its market share is. This is where Wei Jianjun's interesting point lies. After he came back to take over, some strange color combinations and product names disappeared.

Great Wall has chosen the path of long-term survival, so it must give its competitors a slap in the face. And then give the second generation a slap in the face.

It is okay to criticize Great Wall's sales, just like when I had the advantage in real estate business, Joy City Holdings had no residential properties at all, not many commercial properties either, and its business seemed to be very average.

But Joy City is stable. Even after the storm has passed, Joy City is still building buildings. It would be great if it could grow in scale and stand firm like Vanke, but if it cannot grow in scale but is just stable, it is also a good choice.

It is perfectly fine to criticize Joy City for its low sales, because they do not take an aggressive approach. The same is true for criticizing Great Wall, saying that Great Wall's sales are not high, but Great Wall expects its net profit in the first half of this year to be 6.5 billion to 7.3 billion yuan, an increase of 5.139 billion to 5.939 billion yuan compared with the same period last year, a year-on-year increase of 377.49% to 436.26%.

Looking at 2023, Great Wall Motor's net profit will be 7.022 billion yuan.

That is to say, Great Wall has achieved the net profit of the whole of last year in just half a year. It sells one million cars a year, including exported cars. In the first half of this year, Great Wall sold 201,500 cars in overseas markets. Just looking at the domestic sales, you can find that the sales data is indeed ugly.

But Great Wall is steady. It is not about raising prices, but optimizing product structure and accurately occupying a part of the market, which is enough. It is better to be cautious than to spend money before it is earned. How many good results can there be?

The Chinese motorcycle roll market was a flash in the pan 20 years ago, but later lost out to Southeast Asia due to quality issues.

All I wanted was a flourishing business and a raging fire, but what happened in the end? In the end, the building collapsed.

No, not even one. Whoever spends money before it is earned will end up with a collapsed building.