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saic motor has been the top seller in the auto market for 18 years since it achieved sales of 1.224 million vehicles in 2006. but now, the crown is no longer stable.

although saic motor is still the industry sales champion, the title of "china's largest automobile group" is at risk of changing hands at any time. byd, as the leader in the new energy field, has surpassed saic motor in sales for two consecutive months, attracting the attention of the industry. what is more noteworthy is that the trend of one rising and the other falling seems to be difficult to reverse.

the reshaping of the market landscape is not just a change in sales rankings, but also a profound change in consumer demand, industry trends and even the global automotive industry ecosystem.

the new king is about to emerge, what should the old king do?

01

from leader to follower

according to saic motor's 2024 semi-annual report, from january to june, the company achieved wholesale sales of 1.827 million vehicles and terminal deliveries of 2.115 million vehicles. although this figure still ranks first on the sales list, the hidden worries behind it cannot be ignored. as the "runner-up", byd's sales in the first half of the year have reached 1.607 million vehicles, and the gap with saic motor is narrowing rapidly. in addition, saic motor's sales have been overtaken by byd for two consecutive months. in july this year, saic motor's wholesale sales were 251,500 vehicles, a year-on-year decrease of 37.16%, while byd's sales in the same period reached 342,400 vehicles, a year-on-year increase of 30.60%.

the decline in saic's sales is in sharp contrast to byd's growth, indicating a quiet shift in market power. of course, some people believe that saic is still the no. 1 in sales and it may be too early to worry about it, but if we look back in time, the grim situation is more obvious.

in 2018, saic group's sales volume exceeded 7 million vehicles, with annual sales of 7.052 million vehicles, reaching its peak. at that time, byd's new car sales were only 520,000 vehicles, less than one-tenth of saic group's.

in 2023, saic motor's sales volume dropped to 5.021 million units, and its overall sales volume has been declining for five consecutive years, and it has not achieved its annual sales target for the sixth consecutive year. during the same period, byd's sales volume increased to 3.024 million units, a year-on-year increase of 62.30%. the gap between byd and saic motor has dropped from 90% to less than 40%.

in terms of market value, byd now far exceeds saic, which is 4.6 times that of saic. as of the close of july 8, 2024, byd's market value is as high as 712.7 billion yuan, ranking third in the global auto company market value ranking. saic's market value is only 154.9 billion yuan, ranking only 22nd.

in terms of revenue performance, byd is also gradually pulling away from saic group. according to byd's 2024 interim performance report, byd's operating income in the first half of the year was 301.127 billion yuan, a year-on-year increase of 15.76%; net profit was 13.631 billion yuan, a year-on-year increase of 24.44%; non-net profit was 12.315 billion yuan, a year-on-year increase of 27.03%. saic group released its 2024 interim report showing that saic group achieved operating income of 284.7 billion yuan, a year-on-year decrease of 12.82%; net profit of 6.628 billion yuan, a year-on-year decrease of 6.45%; non-net profit was 1.02 billion yuan, a year-on-year decrease of 82.00%.

02

after the "fist" becomes weak

for a long time, saic motor's sales have been mainly guaranteed by its joint venture brands: saic volkswagen, saic gm, and saic-gm-wuling. these joint venture brands have contributed huge sales and profits to saic motor with their strong brand influence, mature product technology, and extensive market network.

however, with the intensification of market competition and changes in consumer preferences, the advantages of traditional fuel brands have gradually weakened. saic group's once "three fists" seem to be faltering in the transformation to new energy. the speed of product line updates is slower than market changes. in addition, affected by multiple factors such as the decline in subsidies for new energy vehicles, rising raw material prices, and greatly compressed profit margins, the company has fallen into a dilemma of declining sales and erosion of market share.

public data shows that in 2018, the sales of saic volkswagen, saic gm, and saic-gm-wuling were 2.065 million, 1.97 million, and 2.072 million respectively, totaling 6.107 million, accounting for 86.6% of saic group’s total sales that year. by 2023, the sales of the former “fists” collectively reached a historical low, at 1.215 million, 1.001 million, and 1.403 million respectively, compared with 2018, sales shrank by 41%, 49.2%, and 32.3%. moreover, under the strategy of “price for volume”, the net profit of the three joint ventures fell by 58% year-on-year, a decrease of 9.16 billion yuan compared with 2022.

the decline continued into this year. from january to july 2024, saic volkswagen's cumulative sales were 593,000 vehicles, down 1.53% year-on-year; saic gm's performance was even more sluggish, with sales of 241,000 vehicles in the same period, down 55.14%; although saic-gm-wuling has gained a place in the new energy market with micro electric vehicles such as hongguang mini ev, its subsequent growth momentum is insufficient in the face of a more intense competitive environment. saic-gm-wuling's cumulative sales in the same period were 646,000 vehicles, up only 2.31% year-on-year.

faced with this situation, saic motor had to seek new growth points and development momentum. the new "three fists" - new energy, overseas expansion and independent brands became the new strategic direction of saic motor.

however, the road to transformation is not smooth. in the field of new energy, although saic has invested a lot of resources and technical strength, the transformation speed is still slow, and there is a clear gap compared with competitors such as byd. specifically, the slow transformation of new energy is mainly reflected in two aspects: technology reserves and market promotion. although saic has launched a number of new energy models, it still lags behind industry leaders in core technologies such as battery technology and intelligent driving.

the overseas strategy faces the uncertainty of the international market. in the first half of this year, saic motor delivered 548,000 vehicles to overseas markets. among saic motor's overseas markets, the european market is quite important.

in the first half of this year, the terminal delivery volume of the mg brand in the european market exceeded 120,000 vehicles. from the perspective of the whole year, the european market has reached a scale of 200,000 vehicles. after the eu began to increase tariffs on electric vehicles manufactured in china, the sales volume of electric vehicles exported from china to europe in july showed a significant decline. data from dataforce, a world-renowned consulting firm, shows that the registration volume of chinese electric vehicles in europe has dropped sharply by about 45% compared with june. among them, the sales volume of the mg brand has dropped by 20%. for saic group, it is particularly important to ensure the size of the european market and have stronger global competitiveness and risk response capabilities in the future.

in terms of independent brands, although saic passenger cars and other brands have made some progress in recent years, they still need to strengthen product differentiation and quality improvement. at the same time, they also have to deal with many challenges such as low brand awareness and imperfect sales channels. there is still a risk of insufficient stamina. from january to july, saic passenger cars' cumulative sales were 385,000 units, a year-on-year decline of 20.19%. among them, the cumulative sales of the roewe brand were 72,400 units, a year-on-year decline of 12.68%.

03

big change

saic motor has deeply realized that only through self-reform can it consolidate its market position, so it has launched the largest-scale "reshuffle" in recent years. this round of personnel adjustments not only involves a wide range and great efforts, but also has clear goals and directions. it aims to inject new vitality into the company by introducing fresh blood and optimizing the management structure.

on july 10, 2024, the board of directors of saic group announced the election of wang xiaoqiu as the chairman of the company's eighth board of directors and the appointment of jia jianxu as the company's president. this personnel change marks that saic group has officially entered a new stage of development. as a senior executive and pioneer of saic group, wang xiaoqiu has accumulated rich experience and deep resources in many key positions. his succession will undoubtedly bring new development ideas and strategic directions to saic group. the promotion of jia jianxu as the general manager of saic volkswagen reflects saic group's high attention and expectations for new energy and overseas markets.

on august 9, 2024, saic-gm announced personnel changes in key positions such as the company's general manager and deputy general manager: lu xiao replaced zhuang jingxiong as general manager of saic-gm; xue haitao succeeded lu yi as deputy general manager of saic-gm; wang conghe replaced lu xiao as executive vice president of pan asia technical automotive center; cai bin returned to saic-gm again as party secretary.

according to incomplete statistics, 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 more than 10 personnel changes. the changes cover the entire group, from the change of leadership of saic group, the replacement of saic group's vice president, to the comprehensive changes of the top leaders of saic volkswagen, saic gm, saic passenger vehicle, huayu automotive, and saic transmission.

the new round of management adjustments of saic group is not only a personnel change, but also an update of strategic thinking and business philosophy. the overall idea of ​​saic group's "restructuring" is to introduce professionals with new energy vehicles and intelligent network technology backgrounds into the management, bringing new development concepts and strategic thinking to the group. some veterans who have made brilliant achievements in the traditional fuel vehicle market but failed to adapt to the changes in the new energy vehicle market have gradually faded out of the management.

under the leadership of the new leadership team, saic group has clarified the direction of its strategic transformation: first, to accelerate the development of new energy vehicles, increase research and development investment, and enhance product competitiveness; second, to deepen the construction of independent brands, enhance brand influence through technological innovation and brand building, and actively explore cross-border cooperation and diversified development paths; third, to expand overseas markets, seek new growth points and development space, and achieve a global layout.

saic motor has not neglected the transformation and upgrading of the traditional fuel vehicle market. by optimizing product structure, improving technology content and reducing costs, it strives to maintain the profitability of the traditional fuel vehicle business and provide strong support for the rapid development of the new energy vehicle business.

in order to better implement the strategic transformation plan, saic motor has also carried out organizational optimization and process reengineering, improving the internal operation efficiency and management level of the enterprise by streamlining the organization, optimizing the process, and strengthening the collaboration.

recently, there was news that saic motor is planning to integrate the r&d business of its two brands, zhiji and feifan, into the saic group innovation research and development institute, including power batteries, intelligent driving, chassis and other technical projects, which will be coordinated by the r&d institute. an insider said: "zhiji's 'solid-state battery' and feifan's 'battery swap technology', as well as the extended-range development project, have been prioritized by the saic r&d institute, thereby expanding the development scale and achieving technology cost reduction."

how long can saic motors keep its crown? the enterprise observer will continue to observe.

qiguan guozi is the official wechat public account of qidian observer newspaper. qidian observer is an all-media platform guided by the state-owned assets supervision and administration commission of the state council and hosted by the china enterprise reform and development research association. it is recognized by the state-owned assets supervision and administration commission of the state council as a "state-owned enterprise's own public opinion platform" and is committed to reporting on the reform and development of chinese enterprises from a professional, market-oriented and international perspective.

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