Great Wall Motor, whose shares were suspended from trading on Thursday (8 May), told dealers to stop taking orders for its new Haval H8 SUV because it cannot make enough of the vehicles, two sources have said.
According to Bloomberg News, the sources said the carmaker told dealers this week. An official with Great Wall’s media department told the news agency he hadn’t received any relevant information.
Bloomberg noted the H8, Great Wall’s most expensive SUV triggered investor concerns in January when the carmaker said it would delay the launch of the vehicle after the automotive press panned it in test drives, causing the company’s shares to tumble 12%, their steepest drop since 2008, the following day.
“I can’t really recall any other automaker stop taking orders soon after they started so this is quite unusual,” Han Weiqi, a Shanghai-based analyst with CSC International Holding, told Bloomberg.
“If they can’t give a convincing reason, people may start to wonder whether there are other untold stories behind the suspension.”
Great Wall shares fell 6% on Wednesday in Hong Kong trading before the company suspended trading Thursday pending an announcement “in relation to inside information” of the company. Its Shanghai-traded shares, also suspended, dropped 4% Wednesday.
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By GlobalDataGreat Wall had said on 13 January it decided to push back the H8 by three months after detecting that the vehicle had issues ranging from the brakes to low steering resistance and excessive noise.
Deliveries started on 21 April 21 during the Beijing show and sales started in cities including Beijing, Xi’an, Chengdu, Guangzhou, Kunming and Harbin.
Great Wall had about 1,000 pre-orders for Haval H8 and the company was targeting sales of 3,000 and 5,000 units for the vehicle in May and June, and 30,000 to 35,000 this year, Ole Hui, a Hong Kong-based auto analyst with Mizuho Financial Group Inc. (8411), wrote in a research note last month cited by Bloomberg.
“H8 is very important for Great Wall and it is seen as the next engine of the growth for the company given it is their first high-end model,” CSC International’s Han told Bloomberg.
“The importance works as a double-edged sword and it will be quite a blow to the company if the model for some reason fails to meet people’s expectations.”