With the top management accelerating the "blood transfusion", can SAIC-GM get out of the sales quagmire?
2024-08-15
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This year, affected by unfavorable factors such as product strength and the "price war" in the auto market, the growth of Chevrolet, Buick and Cadillac brands under SAIC-GM has been sluggish, and they have almost entered the normal state of "selling cars at a lower price". The picture shows the Chevrolet 4S store in Dongfang Jiye Auto City, Chaoyang District, Beijing.
In the increasingly competitive automobile market, sales volume is often the core indicator that can most directly reflect the development of a brand or a team. Faced with the continued decline in market performance, SAIC-GM is accelerating the pace of "replacing" its senior management.
On August 9, SAIC-GM announced that Lu Xiao, former executive vice general manager of Pan Asia Technical Automotive Center, will replace Zhuang Jingxiong as general manager of SAIC-GM; Xue Haitao, former vice general manager of SAIC-GM-Wuling, will replace Lu Yi as the company's vice general manager, responsible for marketing-related work.
The reporter found that this is the fourth senior management adjustment and appointment within SAIC Motor this year. "Compared with the previous three personnel changes, this time the 'blood transfusion' of SAIC-GM's senior management seems more thorough and comprehensive." Xu Hong, an independent analyst in the travel industry, said frankly that this move also shows to some extent SAIC-GM's determination to accelerate reform and get out of the sales quagmire.
Sales volume continues to decline
At the 2024 Beijing International Auto Show in April this year, several photos of General Motors Chairman and CEO Mary Barra attracted a lot of attention and discussion. In the photos, Mary Barra stared at a product of a domestic brand in front of her, frowning, and seemed to be worried.
As the head of General Motors, Mary Barra helped GM emerge from the post-bankruptcy era and delivered net profits of tens of billions of dollars in 2021, 2022, and 2023; however, in China, SAIC-GM's net profit in 2023 was only 2.543 billion yuan, a year-on-year drop of more than 54%.
Since the beginning of this year, SAIC-GM's sales have been even worse. In July, SAIC-GM wholesaled only 15,000 new cars, down 82.42% year-on-year; in the first seven months, the cumulative wholesale was 240,500 vehicles, down 55.14%, and the sales scale fell to fourth place within SAIC Group.
"As one of the earliest joint venture automakers to enter the Chinese market, Buick, Chevrolet and Cadillac under SAIC-GM were once household names, but their influence is now rapidly declining," Xu Hong told reporters. "Slow product iteration and lagging electrification are all factors that have led to SAIC-GM's decline."
In fact, as early as 1996, General Motors launched the EV1 electric car; in 2010, General Motors introduced the Chevrolet VOLT extended-range electric car... However, General Motors, which has the "first-mover advantage" in new energy vehicles, has failed to catch up with the development of new energy vehicles in China.
In 2021, GM announced that its new global electric vehicle platform, the AutoNergy platform, would officially enter China. At the GM Technology Outlook Day in 2022, SAIC-GM announced that it would invest 70 billion yuan to increase electrification. However, it was not until the end of 2023 that the first new energy vehicle built on the AutoNergy platform, the Cadillac Regal, was officially launched and launched on a large scale this year.
The sales of Buick E5, Buick E4, Velite 6 and other models that came out at the same time as Cadillac Regal were also tepid. In particular, the Pioneer Edition of Buick E5, which was launched in 2023 and priced at 169,900 yuan, not only failed to bring more impressive sales, but also made many old car owners feel that they were "backstabbed by the price", affecting the reputation of the Buick brand and even SAIC-GM.
This struggling market performance is in stark contrast to the bold statement made by former SAIC-GM General Manager Zhuang Jingxiong that "SAIC-GM PHEV intelligent electric plug-in hybrid will become the 'strongest plug-in hybrid in joint ventures', directly entering the plug-in hybrid 2.0 era, and launching a counterattack against joint venture plug-in hybrids."
At the same time, the SAIC-GM Software and Digitalization Center, which was established after Zhuang Jingxiong adjusted and reorganized the original software development team of the Pan Asia Technical Automotive Center during his tenure, did not achieve the expected results. According to the original plan, the establishment of this center would achieve linkage with GM's North American Detroit headquarters and achieve the goal of "Chinese people making software that meets the needs of Chinese consumers."
However, the reporter learned that, up to now, the implementation of SAIC-GM's local intelligent solutions still faces constraints from GM. "Although GM started research in the field of autonomous driving quite early, the autonomous driving technology used in China is still relatively conservative. If you want to make changes, you need the consent of GM." Xu Hong revealed, "Therefore, whether it is Cadillac, Buick or Chevrolet, the intelligent level of their products has not made obvious progress and changes after the establishment of SAIC-GM Software and Digitalization Center."
Comprehensive reform is urgently needed to stop the decline and recover
"At its peak, SAIC-GM's annual sales exceeded 2 million vehicles, but in 2023 it was only 1 million. Such a situation cannot be stopped by a 'change of blood' at the top level." As Xu Hong said, the problems currently facing SAIC-GM are systemic, and a change of leadership is only the first step.
Recently, the reporter visited the Chevrolet 4S store in Dongfang Jiye Auto City in Chaoyang District, Beijing. There were no other customers in the store except for a few salesmen. Many models including the Equinox, Trailblazer and Cruze were on sale at reduced prices, and some cars were even reduced by more than 40,000 yuan.
"There are not many consumers coming to the store to look at cars at the moment, and many of them are attracted by the price cuts," a salesperson at the store told reporters. He said that price cuts have become a regular way to sell cars in the store, and if the prices are not cut, it will be difficult for consumers to buy Chevrolet.
It is important to note that whether it is Chevrolet, Buick or Cadillac, "selling cars at a lower price" has become the norm. When encountering national standard conversion and other nodes, these three brands will even have "price cuts". It is also because of the frequent price cuts that Cadillac, which is a second-tier luxury brand, has some models whose prices even overlap with Buick's models.
"Chevrolet and Buick originally had problems with product overlap and price overlap, which made SAIC-GM prone to 'internal friction'. Now Cadillac's price cut has intensified the internal competition among the three brands under SAIC-GM." Xu Hong analyzed that such a situation on the sales end would undoubtedly greatly reduce the effectiveness of the products and development strategies that should have been promoted during the actual implementation process.
In addition to adjustments in product and sales, it remains to be seen whether Lu Xiao, who was born as an engineer, can use the "GM technology" brand to drive sales growth. As the first Chinese chief engineer in GM's global platform, Lu Xiao has led the development of important models such as Buick Regal, LaCrosse, and Chevrolet Malibu.
"Nowadays, on the product side, it is not easy to transform SAIC-GM's existing models into 'hot sellers'. In addition to model changes, the research and development of new cars often requires a relatively long period of time. Currently, new cars are launched in the Chinese auto market almost every week. Therefore, if we want to transform Lu Xiao's technical talents into new products in a short period of time, and then successfully transform the new products into high sales, all these will test the patience of SAIC Group and even General Motors." Xu Hong analyzed.
The weakness of product and sales has also caused SAIC-GM's brand reputation to decline, and customer stickiness has become worse year by year. Xue Haitao has to solve this problem.
The reporter learned that Xue Haitao has been deeply involved in the front line of automobile marketing for many years, creating popular models such as Hongguang MINIEV and Wuling Bingo and multiple new energy technology brands, and also promoted the expansion of SAIC-GM-Wuling's overseas business. Therefore, the running-in between him and Lu Xiao will also become the focus of attention from the outside world in the next period of time.
"In fact, SAIC-GM's problems are also SAIC Group's problems. SAIC-GM used to be SAIC Group's 'profit cow' and helped SAIC Group's independent brands to develop rapidly. Today, the sales and profits of SAIC Group's joint venture brands are both declining, while SAIC Group's independent brands do not seem to have achieved 'feedback'. In this situation of transition, how SAIC Group will make adjustments is also a cause for concern," Xu Hong concluded.
China Youth Daily and China Youth Network reporter Zhang Zhenqi wrote and photographed Source: China Youth Daily
Source: China Youth Daily Travel Weekly
