New energy, new energy, new energy

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Recently, SAIC Motor has frequently changed its leadership. After Wang Xiaoqiu took over as chairman of SAIC Motor and Jia Jianxu as president of SAIC Motor, executives of various companies under SAIC Motor have been adjusted, including SAIC Passenger Vehicle. Earlier, SAIC Passenger Vehicle announced that Yu Jingmin, the former executive deputy general manager of sales and marketing at SAIC Volkswagen, would serve as the executive deputy general manager of the company.

As you may know, Yu Jingmin is a well-known 'internet celebrity' in the automotive industry. He has a strong online presence and a natural sense of humor, which has served him well in marketing. His personal brand, "Fat Head Yu," alone demonstrates his prowess in this field.

Prior to his stint at SAIC Volkswagen, Yu Jingmin also served as a senior executive at SAIC Passenger Vehicle and delivered impressive results, earning him the reputation of being the "firefighter" of the company. Now that Yu Jingmin has been transferred back to SAIC Passenger Vehicle from SAIC Volkswagen, the intention is clear: SAIC Passenger Vehicle needs him to put out the fire of declining market performance. At present, the brands under SAIC Passenger Vehicle, such as Roewe, MG, and Feifan, are experiencing sluggish sales in the market.

Now, this marketing veteran has once again taken up the banner of SAIC Passenger Vehicle and taken on the heavy responsibility of revitalizing the company. Yu Jingmin hit the ground running upon taking office, not only publicly lambasting Xiaomi Automobile to grab media attention but also positioning SAIC Roewe as the new Volkswagen with an annual sales target of 200,000 units.

After these series of maneuvers, Yu Jingmin has indeed gained immense popularity, but SAIC Passenger Vehicle, which should have been the main focus of the marketing efforts, has failed to capture the attention of the public with any notable point. Whether such marketing strategies align with their original intentions is debatable.

Why is it always him?

Within SAIC Motor, Yu Jingmin seems to have always played the role of the "firefighter." Back in 2014, when the Roewe and MG brands were struggling with outdated products and sluggish sales growth, SAIC Passenger Vehicle's sales dropped from 230,000 to 180,000 units. In June of that year, Yu Jingmin joined SAIC Passenger Vehicle as the deputy general manager of marketing.

Facing the performance challenges of the Roewe and MG brands, Yu Jingmin's strategy was to differentiate the brands through market positioning. Roewe focused on new energy and intelligent connectivity, while MG targeted the young, sporty, and international audience. As a result, the launch of Roewe RX5 two years later broke into the market with the catchphrase "Hello, Zebra," achieving monthly sales of over 20,000 units. Roewe became the main sales driver for SAIC Passenger Vehicle, contributing to over 700,000 sales in 2018, with over 200,000 units coming from Roewe RX5. Similarly, the MG brand, under its international strategy, has consistently ranked as the "Champion of Single Chinese Auto Brand Exports" for multiple years.

While SAIC Passenger Vehicle's market performance was steadily improving, SAIC Volkswagen was struggling. From 2019 to 2021, SAIC Volkswagen's sales declined by 3.07%, 24.79%, and 17.50% year-on-year, respectively. In 2021, Yu Jingmin was appointed executive deputy general manager of sales and marketing at SAIC Volkswagen and general manager of Shanghai Anji Automotive Sales Co., Ltd. to turn the situation around.

In the year following Yu Jingmin's appointment at SAIC Volkswagen, the company's sales increased by 6.35% year-on-year. From January to July of this year, despite intense competition and price wars in the new energy vehicle market, SAIC Volkswagen still managed to sell nearly 600,000 units.

While we cannot solely attribute the success of SAIC Passenger Vehicle and SAIC Volkswagen to Yu Jingmin, it is undeniable that his addition has injected a significant force into the development of these companies.

Three years later, Yu Jingmin has been transferred back to SAIC Passenger Vehicle, underscoring SAIC Motor's intention to revitalize the company's flagging market performance and elevate the profiles of Roewe and MG, which have been overshadowed in recent years. SAIC Passenger Vehicle has been experiencing a steady decline in brand strength and sales, lagging far behind mainstream Chinese brands in market performance.

Rescuing SAIC Passenger Vehicle: A Daunting Task

Currently, SAIC Passenger Vehicle boasts brands such as Roewe, MG, and Feifan, but their market performance remains lackluster. For instance, Roewe's sales have plummeted from 470,000 units in 2018 to just 157,200 units in 2023. From January to July this year, cumulative sales were a mere 70,400 units. MG, while performing well overseas, has struggled in the domestic market. Similarly, Feifan's monthly sales hover around 1,000 units, with only 222 units sold in August.

The sluggish sales of SAIC Passenger Vehicle's multiple brands are not a recent phenomenon but the result of long-standing internal and external factors. Externally, competition in China's automotive market has intensified, with leading Chinese automakers like BYD, Geely, Great Wall Motor, and GAC Aion leveraging their brand power, product strength, and service capabilities, as well as the rise of new energy vehicles, to seize market share. The development of smart technology has further weakened Roewe's competitiveness in the intelligence field, while joint venture automakers' products continue to drop in price, further compressing the market space for non-mainstream brands like Roewe and MG.

As competitors grow stronger, Roewe and MG seem to have stagnated. Despite the surge in new energy vehicles and rapid updates in technology and models from various brands, Roewe and MG have failed to create a compelling core competitiveness for their new energy products.

The same is true for their gasoline-powered vehicles. The prolonged use of dry dual-clutch transmissions in Roewe and MG models has significantly impacted the driving experience, with frequent consumer complaints about gearbox noise and engine vibration. Over time, this has significantly tarnished the brands' reputation among consumers.

Not only do the products fail to meet market demands, but the brands' low market recognition is also related to SAIC Passenger Vehicle's lack of innovative and targeted marketing strategies. This inability to effectively communicate the value and appeal of their models to consumers, coupled with inadequate service channels compared to other leading brands, has made it difficult to provide high convenience in car purchasing and ownership.

In summary, SAIC Passenger Vehicle is neither dominant in the new energy vehicle segment nor able to consolidate its market share in gasoline-powered vehicles. Coupled with issues in marketing strategies and service channels, the company has struggled to build a strong market competitiveness, ultimately leading to a continuous decline in sales.

In July this year, SAIC Passenger Vehicle sold 50,279 units, a year-on-year decline of 29.95%. Cumulative wholesale sales for the first seven months reached 385,118 units, down 20.19%. These figures underscore the significant market pressure facing SAIC Passenger Vehicle.

With Yu Jingmin's return to SAIC Passenger Vehicle, it is hoped that he can address the company's challenges, whether by improving marketing strategies, enhancing brand recognition, or repositioning the brand and formulating relevant strategies. However, Yu Jingmin faces a heavier burden than in previous years, and resolving SAIC Passenger Vehicle's issues will require more time.

Building Momentum for Breakthrough

SAIC Passenger Vehicle's predicament mirrors the ongoing transformation and upgrading of China's automotive industry. China's automotive industry is transitioning from pursuing sales growth to high-quality development. In this process, automakers lacking core technologies are seeing their market space compressed and sales declining, a necessary step in the industry's transformation and upgrading that SAIC Passenger Vehicle cannot avoid.

SAIC Passenger Vehicle faces mounting challenges in the market. Firstly, the automotive consumption environment has changed significantly, with consumers prioritizing brand recognition, smart technology, and overall vehicle quality, all of which are weaknesses for brands like Roewe, MG, and Feifan. Secondly, EU pressure has targeted MG, imposing an additional 38.1% tariff, adding uncertainty to its overseas expansion plans.

Faced with these challenges, Yu Jingmin launched a counteroffensive upon returning to SAIC Passenger Vehicle. He publicly criticized Xiaomi Automobile for plagiarism, generating buzz and attention for himself and SAIC Passenger Vehicle. He also positioned Roewe as the new Volkswagen of China, emphasizing the brand's commitment to reliable and practical vehicles like its German counterpart. Additionally, SAIC Passenger Vehicle has set an annual sales target of 200,000 units and indicated plans to adjust its brand architecture, personnel, and key methodologies.

SAIC Passenger Vehicle is currently in a period of adjustment and momentum building. Whether the Roewe brand can achieve its annual sales target of 200,000 units and whether SAIC Passenger Vehicle can regain its former glory under Yu Jingmin's leadership remains to be seen by the market.

One thing is certain: the market environment in 2024 is vastly different from that of 2014. The automotive market has entered an era of stock competition, with more diverse forms of internal competition. Automakers must excel not only in marketing but also in brand power, product quality, and service capabilities. Otherwise, all adjustments made by SAIC Passenger Vehicle will ultimately be in vain!