news

As of August 14, SAIC Group has completed the largest-scale senior management adjustment in 2024.SAIC Volkswagen, SAIC Passenger Vehicle, SAIC General Motors,SAIC-GM-Wuling, involving the adjustment of as many as 15 senior executives, almost completing a comprehensive change of leadership from the group to all branches.

Whether in terms of the frequency of changes or the number of people and positions involved, it is unique in today's automotive industry.

With frequent job transfers, who is the most suitable person?

In fact, SAIC is not the only company that has seen major personnel changes in the automotive industry this year. According to Gasgoo's previous statistics, at least 70 personnel changes occurred in the first half of this year, involving more than 100 people, affecting traditional automakers, foreign/joint venture automakers, and new forces.

Even in the second half of the year, in July alone, FAW, Dongfeng,BAIC、auspicious、Great Wall、NIO、Xiaopeng、Zero Run、Porsche, Genesis and many other car companies have undergone personnel changes, involving more than 20 people, and basically they are the top and second-in-command.

But obviously, no other company can match SAIC's frequency of change, number of people involved, and number of positions.

According to incomplete statistics from Gasgoo, since Chen Xianzhang was transferred to SAIC Group as deputy chief economist and deputy director of the technical committee in February 2023, and Jia Jianxu, the former general manager of Yanfeng, took over as general manager of SAIC Volkswagen, SAIC Group has announced 12 personnel changes. From the replacement of the chairman of SAIC Group to the vice president of SAIC Group, the top leaders of SAIC Volkswagen, SAIC GM, SAIC Passenger Vehicles, Huayu Automotive, SAIC Transmission, Yanfeng and other companies have all changed.

There are also rumors that Zhuang Jingxiong, the former SAIC-GM general manager who was replaced by Lu Xiao, was transferred to SAIC Anji Logistics one year and three months after taking office, and Lu Yi, another former SAIC-GM sales vice president, will be transferred back to SAIC Group. Unfortunately, no official documents have been confirmed so far.

Judging from the existing information, unlike the cross-shift between FAW and Dongfeng, and also unlike the senior management succession of other automobile groups, a "rotation" system has been adopted among the subsidiaries of SAIC Group.

The main promotion route is from parts companies to vehicle companies, and then to group management, especially the general manager of SAIC Volkswagen. The last two general managers came from Yanfeng Automotive and Huayu Automotive. Jia Jianxu took less than 18 months to complete the job transition from Yanfeng Automotive General Manager, SAIC Volkswagen General Manager, SAIC Group Vice President, and then SAIC Group President. At this point, he is only 46 years old, and has become the youngest manager of SAIC Group.

Tao Hailong, the current general manager of SAIC Volkswagen, has also been frequently transferred. In January this year, Tao Hailong, the former general manager of SAIC Passenger Vehicle,Feifan AutomobileAfter Wu Bing, the former vice president of SAIC Motor, who was previously the CEO, stopped holding the position of branch company concurrently, Wang Jun, the former general manager of HUAYU Automotive, took over as the general manager of SAIC Passenger Vehicle and CEO of Feifan Automotive. The general manager position of HUAYU Automotive was handed over to Tao Hailong, the former general manager of SAIC Transmission.

However, within half a year, as Jia Jianxu was promoted to President of SAIC Group, Tao Hailong was transferred from General Manager of HUAYU Automotive to General Manager of SAIC Volkswagen, and one month later he concurrently served as Secretary of the Party Committee of SAIC Volkswagen.

At this point, the top leaders of SAIC Group and its major subsidiaries have all been replaced. Does this mean that SAIC Group’s downward trend can be stopped?

Can the replacement of senior management reverse the downward trend of development?

"What's going on with SAIC recently?" In a private conversation in the middle of the year, a senior in the industry asked a manager of SAIC Group. What he got was a long and awkward moment.

It is undeniable that as the largest automobile group in China, SAIC Group is currently facing a development bottleneck.

To be more precise, this downturn began four years ago.

I still remember that in 2018, after a series of hardships such as the global economic slowdown, the downturn in the auto market, and the escalation of Sino-US trade frictions, all opinions had declared that "the high-speed growth period of the automobile industry has ended", and SAIC Group's sales remained strong thanks to SAIC Volkswagen and overseas businesses. But unexpectedly, the sales of SAIC GM, once a cash cow, began to decline sharply in 2019, followed by SAIC Volkswagen, and only SAIC Passenger Cars was slowly climbing.

Sales trends of SAIC Motor's subsidiaries from 2016 to July 2024; Image source: Gaia Systems

But obviously, with the explosive growth of the new energy vehicle market,BYDThe rapid development of new energy enterprises has continuously squeezed the traditional automobile market.ZhijiThe SAIC Group also failed to gain much benefit.

According to SAIC Motor's production and sales report, in July, the group sold 251,484 vehicles, a sharp drop of 37.16%; in the first seven months, the cumulative sales were 2,078,438 vehicles, a drop of 15.92%. Its two major growth engines, new energy and export business, have both stalled. Among them, new energy sales were 90,987 vehicles, a drop of 21.85%; export and overseas base sales were 97,070 vehicles, a drop of 15.77%.

The performance of SAIC Group's branches was also unsatisfactory. In July, SAIC Volkswagen wholesaled only 81,003 vehicles, a year-on-year decrease of 18.18%; the cumulative wholesale volume in the first seven months was 593,091 vehicles, a decrease of 1.53%. Its sales scale is already smaller than that of SAIC-GM-Wuling, ranking second within the group.

SAIC-GM performed particularly poorly, with wholesale sales of only 15,000 vehicles in July, a year-on-year drop of 82.42%; the cumulative wholesale sales in the first seven months were 240,579 vehicles, a drop of 55.14%. SAIC Passenger Vehicles sold 50,279 vehicles in July, a year-on-year drop of 29.95%; the cumulative wholesale sales in the first seven months were 385,118, a drop of 20.19%.

Under such circumstances, SAIC must make some changes, but how to make the changes is a difficult problem facing every SAIC employee.

During the three years that Chen Hong was in office, she said, "It is difficult for SAIC to accept a single supplier providing us with an overall solution. We must have our soul in our own hands." Even today, some people still mock her and call her a conservative. But isn't this also a sign of her struggle to break through?

Image source: Zhiji Auto

According to SAIC Group's financial report, between 2021 and 2023, SAIC Group's cumulative R&D investment exceeded 56 billion yuan, which has enabled SAIC Group to make important breakthroughs in key technology fields such as autonomous driving, new energy, and solid-state batteries.

But the reality is that SAIC has lost the top spot in domestic sales for two consecutive months this year, replaced by BYD. So Chen Hong passed the unsolved problem to Wang Xiaoqiu, who was supposed to retire in August. If the problem is still difficult to solve, it may be handed over to the next chairman in three years.

"Carriage" changes guard, gamble on 3.5 million new energy vehicles

SAIC Volkswagen, SAIC GM and SAIC-GM-Wuling were once the "three horses" supporting SAIC Group's sales. However, under the siege of independent brand new energy vehicles, the sales of the "three horses" reached a historical low in 2023, at 1.215 million, 1.001 million and 1.403 million respectively, down 41%, 49.2% and 32.3% from 2018.

Even so, it remains the sales pillar and an important source of profit for SAIC Group, accounting for 72% of the group's total sales, 71.55% of revenue and 46.8% of net profit in 2023.

But this is obviously not a long-term solution. Gasgoo Automotive Research Institute believes that the three major brands of SAIC-GM have been offering high discounts for a long time, and the strategy of trying to exchange price for volume is obviously not conducive to the shaping of brand value, and has caused internal price overlap and unbalanced product structure.

GM's financial report also confirmed this. It lost $104 million in China in the second quarter. In this regard, GM Chief Financial Officer Paul Jacobson admitted, "In China, we have been taking measures to reduce inventory, match production with demand, and reduce fixed costs, but it is clear that the measures we have taken are not enough."

The withdrawal of joint ventures will inevitably require independent brands to take over. Based on its future development expectations, SAIC Group has updated its "three pillars" to new energy, overseas expansion and independent brands, and plans to achieve annual sales of 3.5 million new energy vehicles by 2025, a 2.5-fold increase from 2022, of which independent brands will account for 70%.

On May 24, SAIC Motor announced at the "SAIC Motor New Energy Technology Conference Towards a New Decade" that since the beginning of this year, the latest technologies such as solid-state batteries, smart car "central brain", and digital smart chassis have been put into mass production, helping SAIC Motor's "seven major technology bases" to fully leap forward and upgrade into the 2.0 era.

In terms of overseas expansion, SAIC has now entered more than 100 countries and regions around the world, and its overseas market layout is relatively balanced. Except for the European market, it has already ranked among the top in major global markets such as the Middle East, Australia and New Zealand, South America, and Southeast Asia.

Gasgoo also noted that at the end of July, SAIC's 32nd car carrier, the SAIC Anji Jincheng, was put into use. This world's largest green roll-on/roll-off ship has 7,600 parking spaces, a displacement of more than 40,000 tons, and can achieve a 30% reduction in carbon dioxide emissions. It will join SAIC's self-operated routes in Europe, actively breaking through the bottleneck of export capacity and accelerating cross-ocean shipping.

Image source: SAIC

At the same time, SAIC is negotiating with several countries to determine the layout of the new factory. In July, it was reported that SAIC will make a decision by September 30 to clarify whether it will invest in Spain to build its first electric vehicle factory in Europe, and plans to produce the first car in the fourth quarter of 2027.

In August, SAIC MotorMGMG Motor said in an announcement that it plans to build a Latin American hub in Mexico, including a car factory and a research and development center. Zhang Wei, head of MG Motor's Mexican business, said in a statement that this will not only produce cars locally, but also generate market intelligence for Latin America. In addition, the company also plans to introduce its high-end brand Zhiji to Mexico.

It is undeniable that SAIC has entered the "deep waters" of transformation. With the sales of joint venture brands declining and the EU building a "tariff wall" against Chinese electric vehicles, how to accelerate the rise of independent brands and reduce the operating pressure in overseas markets are still waiting for the new management to solve. It is expected that such a large-scale adjustment of the high-level structure will play a positive role in its innovative transformation and return to the right track of development to a certain extent.