Great Wall, China’s biggest maker of SUVs, has raised investor concerns over its heavy discount promotion policy amid intensifying competition, even though it posted 30% earnings growth in 2016. Price cutting is “unavoidable” and will continue amid intense competition, Wei Jianjun, Chairman of the carmaker said. The company, based in Baoding, Hebei province, announced a CNY1 billion discount promotion for its Haval SUVs. Great Wall reported that its net profit rose 30.9% to CNY10.55 billion for 2016. However, operating costs surged on rising promotion costs, up 30.1% to CNY7.4 million in 2016 from CNY5.7 million the previous year. Gross profit margin decreased 0.62 percentage point to 24.58% in 2016 from 25.20% the year before.“Margins will continue to contract in coming years and we maintain our ‘sell’ rating on Great Wall due to new product launches, competition and its new brand Wey,” said Lo Ka-leong, Analyst from Kim Eng Securities. “Great Wall may spend even more on promotions in the second half of this year amid a series of new H6 launches.” As a result, it will be difficult for the company to maintain market share and profitability, Lo added. Goldman Sachs also expects the carmaker’s margins will come under further pressure due to price reductions on its SUVs, the South China Morning Post reports.