news

한어Русский языкEnglishFrançaisIndonesianSanskrit日本語DeutschPortuguêsΕλληνικάespañolItalianoSuomalainenLatina

Source: Times Finance Author: Wu Kai

"Wuling Hongguang, you deserve it." On the last day of July, SAIC-GM-Wuling Brand and Communication General Manager Zhou Jinkai said on Weibo. But then SAIC Group's production and sales data showed that SAIC-GM-Wuling Automobile Co., Ltd. (hereinafter referred to as "SAIC-GM-Wuling") sales in July fell 31.72% year-on-year, with only 76,000 vehicles sold that month.

Image source: Times Finance

Wuling was once the representative brand of domestic minivans. In the era of fuel vehicles, the monthly sales of various Wuling Hongguang minivans reached thousands of units. After 2020, the trend of electrification of my country's automobile industry is coming, and SAIC-GM-Wuling has also launched the Wuling Hongguang MINIEV in a timely manner, trying to knock on the door of the new energy era.

Wuling Hongguang MINIEV is a pure electric mini car, initially priced at 28,800-38,800 yuan, far lower than the price of mainstream pure electric cars in the market. With its price advantage and flexible body, Wuling Hongguang MINIEV is deeply loved by some female consumers and commuters, and is even dubbed the "god car for shopping".

As competition in the new energy vehicle market intensifies, Wuling Hongguang MINIEV's first-mover advantage is no longer prominent. On the one hand, there is a rapid increase in similar products, and on the other hand, the prices of compact and small cars are falling, giving consumers more choices.

In the first seven months of 2024, despite the increase in overall sales of SAIC-GM-Wuling, the monthly sales of Wuling Hongguang MINIEV were less than 20,000 units, a 70% drop from the peak period. At a time when new energy vehicle products are emerging in an endless stream, Wuling Hongguang MINIEV is not selling well.

Sales of leading models plummet

Wuling Hongguang is the core product series launched by SAIC-GM-Wuling (hereinafter referred to as the "Company"), which is the first "Sino-foreign" joint venture formed in the mixed ownership reform of state-owned enterprises in China jointly established by SAIC Group, General Motors (China) and Guangxi Automobile Group. Its predecessor can be traced back to the Liuzhou Power Machinery Plant established in 1958.

Although it is a joint venture, the two passenger car brands of SAIC-GM-Wuling, Wuling and Baojun, are both independent brands. SAIC Group calls it "a model of Chinese automobile companies that have built independent brands under the joint venture model."

Image source: Times Finance

Wuling and Baojun are both relatively affordable. In terms of product structure, Wuling has small vans, small trucks and a variety of power passenger cars, with an overall price of less than 150,000 yuan; Baojun is a new brand, with its products mainly new energy passenger cars, with an overall price of less than 140,000 yuan.

The main sales of SAIC-GM-Wuling are entry-level models such as Wuling Hongguang MINIEV, Wuling Bingo, Baojun Yueye, etc., which are mostly priced within 100,000 yuan. Among them, the overall sales of Baojun brand models are limited, and the Wuling brand contributes most of the sales. Public data shows that less than half a year after the launch of Hongguang MINIEV, the sales volume reached 120,000 units, and the sales volume continued to rise afterwards, becoming the "pillar" of SAIC-GM-Wuling. However, compared with the initial launch, the competitive pressure faced by models such as Wuling Hongguang MINIEV is continuing to increase.

Take the best-selling Wuling Hongguang MINIEV as an example. It was first released in July 2020 with a price range of 28,800-38,800 yuan. Since then, the price has been raised and a number of derivative models have been launched. Now the price of the MINIEV series has reached 35,800-103,900 yuan.

For reference, the Changan Lumin pure electric mini car with similar size and range is priced at only 49,900-69,900 yuan; the BYD Seagull small pure electric car with larger size and longer range is priced at 69,800-85,800 yuan. Wuling Hongguang MINIEV is no longer as competitive in terms of price as before.

Market data is more intuitive: in the first seven months of 2024, Wuling Hongguang MINIEV's monthly domestic sales did not exceed 20,000 units. In July, its sales were 15,765 units, a drop of nearly 70% from the peak sales of 50,561 units in December 2021.

Give up the “grocery cart”?

The sales decline of SAIC-GM's joint venture brands was even more serious.

From January to July this year, SAIC General Motors Co., Ltd. (hereinafter referred to as "SAIC GM") has sold 241,000 vehicles, a sharp drop of 55.14% compared with the same period last year. The sales of the main models of GM's three major brands, Buick, Chevrolet and Cadillac, in the domestic market have all declined compared with the same period last year.

Against this backdrop, SAIC-GM announced on August 9 that it would adjust its senior management team. Lu Xiao, former executive vice president of Pan Asia Technical Automotive Center (a joint venture between GM and SAIC), replaced Zhuang Jingxiong as general manager of SAIC-GM. Wang Conghe, former vice president of Pan Asia Technical Automotive Center, took over as executive vice president of Pan Asia Technical Automotive Center.

At the same time, Cai Bin, former assistant to the president of SAIC Group, rejoined SAIC-GM and served as the party secretary of SAIC-GM.

The personnel adjustment of SAIC-GM also affected SAIC-GM-Wuling. Xue Haitao, former deputy general manager of SAIC-GM-Wuling, replaced Lu Yi as the deputy general manager of SAIC-GM, responsible for marketing-related work.

SAIC-GM said the adjustment is aimed at accelerating the electrification transformation and improving market competitiveness. "The new leadership team will continue to accelerate the company's transformation in the electrification and intelligent track, focus on innovative breakthroughs in technology, products and marketing, and face fierce market competition."

In addition to the high-level adjustments, General Motors may also adjust its business structure in China.

On August 13, media reported that GM plans to carry out large-scale reforms to its business in China and will cut employees in multiple departments, including R&D. In the future, GM will discuss with SAIC the option of reducing production capacity, switching to the production of electric vehicles and focusing on high-end models, and increasing the import of luxury models.

Times Finance verified the news with SAIC-GM and GM China, and their executives said they had not received the news yet.

Regarding whether the focus on high-end models mentioned in the above information will affect SAIC-GM-Wuling's business development, a relevant person in charge of SAIC-GM-Wuling told Times Finance that GM's possible structural adjustments have little to do with it.

Nevertheless, SAIC-GM-Wuling may be trying a similar structural adjustment strategy to the above news, that is, increasing the proportion of electric vehicles and high-end models. For example, the prices of many models such as Wuling Xingguang, Baojun Yueye PLUS and Baojun Yunduo, which were recently launched, have exceeded 100,000 yuan, entering the mainstream passenger car range.

"In the long run, we can't keep raising prices. We are studying how to gradually increase Wuling's brand value." In April this year, Zhao Yifan, general manager of SAIC-GM-Wuling Product Marketing Center, told the media: "We will continue to emphasize our technical capabilities, consolidate our technical foundation, and further increase the brand premium."

In the view of industry insiders, it is reasonable for SAIC-GM-Wuling to seek upward breakthrough.

However, facing the price competition of internal competition, as well as BYD and Changan, which have taken the lead in entering the mid-to-high-end market through brands such as Yangwang, Denza, Avita, and Deep Blue, SAIC-GM-Wuling's road to upward mobility is extremely difficult. On the one hand, it is difficult to enhance brand power by deeply cultivating the low-priced market with the product label of "People's Wuling"; on the other hand, young users are increasingly interested in the technological attributes of cars, which means that while SAIC-GM-Wuling is breaking through the price range, it will also face challenges in product power such as intelligence and endurance.

Retail data from the China Passenger Car Association shows that sales of domestic mid- and low-priced car models have continued to decline since 2023, and the market below 50,000 yuan, which is dominated by Wuling Hongguang MINIEV, has shrunk particularly significantly. In the first seven months of this year, sales of models below 50,000 yuan accounted for only 2.4%, a decrease of 0.8 percentage points from 2023.

But without the concept of "grocery shopping car", will Wuling still sell well? Perhaps the market will give the answer.