/// The transformation is fast, but not enough.

Since peaking at 7.052 million units in sales in 2018, SAIC Motor has seen a downward trend, falling back to the level of a decade ago in 2023 with annual sales of 5.021 million units.

Faced with declining sales and the overall trend of the new energy vehicle industry, SAIC Motor's pace of new energy strategic transformation is also accelerating.

In fact, SAIC Motor began its new energy transformation journey as early as 2014, subsequently reinforcing the "new four modernizations" through organizational restructuring and business layout.

However, it is not difficult to see from sales performance that although SAIC Motor has long been established, it still needs to find a more effective way to break through.

So, what exactly is SAIC Motor's new energy development strategy? Is there a way forward in the future? Today, let's talk about SAIC Motor's new energy layout.

01

Weak Joint Ventures, Strong Independent Brands

In April 2023, SAIC Motor released a three-year action plan for new energy vehicle development: by 2025, SAIC's annual sales of new energy vehicles will reach 3.5 million units, an increase of 2.5 times over 2022, with a compound annual growth rate of 50%.

Among them, independent brands will account for 70% of the overall sales of new energy vehicles, realizing the switch of development momentum between old and new tracks.

For traditional Chinese automakers, overall vehicle sales have always relied on joint venture brands. However, in recent years, as China accelerates its transition to new energy industries, joint venture brands have begun to struggle in the local market, leading to weak overall sales.

SAIC Motor's ability to maintain its leading position over the years is mainly attributed to its two "profit cows": SAIC Volkswagen and SAIC-GM. SAIC Volkswagen, SAIC-GM, and FAW-Volkswagen have long dominated the top three in domestic passenger vehicle sales.

However, as China's automotive market rapidly transitions to new energy, both traditional automakers and multinational automakers have lagged behind the market, resulting in SAIC Motor maintaining its sales crown but still facing market impact.

Data shows that sales of SAIC Volkswagen and SAIC-GM in 2023 were 1.215 million and 1.001 million units, respectively, down 8% and 14.5% year-on-year.

Of SAIC Motor's 5.021 million sales, independent brand vehicle sales were 2.775 million units, accounting for 55.27% of the total, exceeding half of the total sales.

Among them, SAIC Passenger Vehicle sold 986,000 units, SAIC MAXUS 226,700 units, and IM Motor 38,300 units, with each brand experiencing varying degrees of growth in 2023, with IM Motor seeing the highest growth rate at 665.06%.

In terms of new energy vehicle sales, SAIC Motor sold 1.123 million units last year, an increase of 4.7% year-on-year.

In fact, at the beginning of its new energy transformation, SAIC Motor had already begun to support the development strategy of independent brands, aiming to achieve brand upgrading through independent brands in new energy development.

As early as 2014, Chen Hong, the former chairman of SAIC Motor, began promoting SAIC Motor's full layout in electrification, intelligent connectivity, sharing, and internationalization. In Chen Hong's view, SAIC Motor would not be a "follower" but a "leader".

Since then, the "new four modernizations" have also become a universal consensus in the entire automotive industry regarding future development trends.

In 2014, SAIC Motor signed a strategic cooperation agreement with Alibaba, "proactively ushering in a new era of 'internet cars'", and two years later, in July 2016, SAIC Motor and Alibaba jointly launched the world's first internet car, the Roewe RX5, which became a hit model upon its launch.

In 2021, SAIC took the lead in the industry in comprehensively deploying five centers for software development, big data, artificial intelligence, cloud computing, and network security, initially establishing the basic technical capabilities of "data determining experience and software defining cars".

In 2022, SAIC successfully launched seven internationally leading technology platforms, including pure electric, hybrid, and hydrogen vehicle platforms, as well as battery, electric drive, ultra-hybrid systems, and full-stack solutions for smart vehicles.

As new energy vehicles enter various market segments, SAIC is establishing a new energy vehicle lineup and product series for global users.

From 2014 to 2023, SAIC's annual sales of new energy vehicles rose from 4,000 units to 1.123 million units, an increase of 280 times, with a cumulative global user base exceeding 4 million.

In the first half of this year, SAIC Motor's overall sales reached 2.122 million units, with independent brand deliveries of 1.264 million units, accounting for over 59% of total sales.

At the same time, SAIC Motor's new energy vehicle sales exceeded 522,000 units, an increase of 29.5% year-on-year, with SAIC-GM-Wuling selling 249,000 units, SAIC Passenger Vehicle 128,000 units, SAIC Volkswagen 57,000 units, SAIC-GM 47,000 units, and IM Motor 22,000 units.

Although independent brands under SAIC Motor account for half of sales, the largest contributor is Wuling Hongguang MINI EV, which sells in high volumes but generates low profits.

Meanwhile, independent brands such as IM Motor and R Auto, which bear the responsibility of upgrading SAIC Motor's brand, have their own issues.

02

Multi-Brand Division of Labor and Cooperation

In addition to focusing on supporting the development of independent brands, SAIC Motor also emphasizes multi-brand division of labor and cooperation. The automotive brands led by SAIC Motor include IM Motor, R Auto, Roewe, MG, Wuling, and Baojun.

Among them, IM Motor and R Auto target the mid-to-high-end market, Roewe and MG cover the mainstream market, while Wuling and Baojun target the low-to-mid-end market.

Currently, the division of labor among brands is relatively clear, but initially, the positioning distinction between IM Motor and R Auto was not clear.

In November 2020, on the opening day of the Guangzhou Auto Show, SAIC R Auto officially launched the global pre-sale of its 5G smart electric SUV, the MARVEL R, marking the official establishment of the R Auto brand.

Meanwhile, on November 26th, SAIC Motor announced the official launch of IM Motor, a ten-billion-yuan project jointly established by SAIC Motor, Pudong New Area, and Alibaba, located in Zhangjiang Smart Park, Pudong New Area.

From a brand hierarchy perspective, after the independence of the R brand, it became one of the three independent brands of SAIC Passenger Vehicle alongside MG and Roewe, suggesting that the R brand belongs to SAIC Passenger Vehicle.

However, IM Motor is operated by an independent company jointly established by SAIC Motor, Pudong New Area, and Alibaba, and is on the same level as SAIC Passenger Vehicle.

This capital configuration indicates that IM Motor represents SAIC Motor's group-level layout for future high-end passenger vehicles, encompassing outward exploration in new energy and intelligence sectors.

R Auto, spun off from the Roewe brand and overseen by SAIC Passenger Vehicle, can be seen as SAIC Motor's internal competition prior to the launch of IM Motor products.

The strategy at the time was that if R Auto sold well, it could continue to sell independently; if not, it could be abandoned in favor of IM Motor.

In 2021, SAIC's R brand officially announced the establishment of Feifan Automotive Technology Co., Ltd., and the R brand would continue its market operations under the name Feifan Auto.

Previously, the distinction between IM Motor and R Auto was not very clear, and after R Auto changed its name to Feifan Auto, it became even more confusing for users to understand the distinction between SAIC Motor's brands.

To date, Feifan Auto's voice in the industry has not been loud, and sales have not seen sustained breakthroughs. SAIC Motor has not publicly disclosed Feifan Auto's sales figures for a long time.

According to third-party platform statistics, in May of this year, Feifan F7 sold 212 units, and Feifan R7 sold only 68 units, totaling less than 300 units. This is not only a huge gap from competitors selling tens of thousands of units per month but also far less than even the fractional sales of IM Motor, its higher-end sibling brand.

Compared to Feifan, IM Motor's development has been steadily upward, with retail sales of 6,015 units in June, an increase of 200% year-on-year. IM Motor L6 and IM Motor LS6, both priced above 200,000 yuan and positioned in the mid-to-high-end market, sold 3,623 and 2,013 units, respectively, in June.

In addition to IM Motor and Feifan, SAIC Passenger Vehicle's pure electric vehicles have primarily been under the Roewe and MG brands. From the earliest Roewe E550 and Roewe e50, which were discontinued new energy models between 2012 and 2015, to the current MG new energy series, most of these vehicles were derived from "oil-to-electric" conversions.

Furthermore, in the export market, MG Motor, under SAIC Passenger Vehicle, is the main force for SAIC Motor's automotive and new energy vehicle exports, focusing on overseas markets.

In 2023, MG brand global sales exceeded 840,000 units, ranking first in China's single-brand automotive exports for five consecutive years, accounting for about 70% of SAIC Motor's overseas sales.

Among them, MG new energy vehicle exports exceeded 200,000 units, with the popular MG4 EV exporting 138,700 units annually and selling 108,900 units in Europe.

In its 2023 annual report, SAIC Motor stated that it would leverage the 100th anniversary of the MG brand in 2024 to promote IM Motor products overseas.

However, on July 4th of this year, the European Commission decided to impose provisional countervailing duties on electric vehicle imports from China, with SAIC Motor's pure electric models facing the highest provisional countervailing duty rate of 37.6% (total tax rate reaching 47.6%), effective from July 5th, 2024.

SAIC Motor subsequently filed a protest, but the risk of high tariffs has not yet been resolved.

Additionally, SAIC's Wuling Hongguang MINI EV targets the A0-segment market and once became an industry hit, selling over 30,000 units per month. However, current overall sales have stabilized, with monthly sales hovering around 12,000 units after peaking at 420,000 units annually.

From 2014 to 2023, SAIC Motor's new energy vehicle sales increased by 280 times, a commendable achievement.

However, from the current perspective of SAIC Motor's independent new energy brands, the sales scale of a single brand is not high, especially in the mid-to-high-end new energy market, where SAIC Motor's brands still have a weak presence.

03

Wang Xiaoqiu Takes the Helm, SAIC Motor Welcomes a New Leader

On July 10, 2024, SAIC Motor released a board resolution announcement stating that the current SAIC Motor President Wang Xiaoqiu has been promoted to Chairman, and the current SAIC Motor Vice President Jia Jianxu has been promoted to President. The former Chairman Chen Hong resigned from his position due to retirement.

Public information shows that Wang Xiaoqiu, born in 1964, is both a Ph.D. in Engineering and a professor-level senior engineer, renowned in the industry as an entrepreneur, versatile, and manager.

He has served as Deputy Director of the Shanghai Automotive Industry Technology Center, General Manager of Shanghai Automotive Corporation Passenger Vehicle Company, General Manager of Shangchai Co., Ltd., General Manager of SAIC-GM, Vice President and General Manager of SAIC Motor Passenger Vehicle Company and Technology Center, and President of SAIC Motor.

In 2014, Wang Xiaoqiu stepped down as General Manager of SAIC-GM to become General Manager of SAIC Passenger Vehicle. At the time, SAIC Passenger Vehicle sold 184,800 units, a year-on-year decline of 20.31%, but by 2018, SAIC Passenger Vehicle sales reached 711,100 units, an increase of 34.45%, catapulting SAIC Passenger Vehicle to the forefront of the independent automaker industry.

Wang Xiaoqiu is a firm supporter of new energy transformation and development. He once emphasized, "Why do we invest heavily in the new energy sector? Because we believe it is the future trend.

The future competition is actually about quality and cost-effectiveness. I hope SAIC's electric vehicles are developed for customers. Because in the traditional power sector, SAIC's technology is already proficient, and reputation is important to us. I hope our new energy products' technology is also proficient, enabling us to truly bring a good experience change to customers."

Another confidence in SAIC Motor's new energy transformation development comes from its investment in technology research and development.

At the "New Decade New Energy Technology Conference" held on May 24th of this year, SAIC officially released the "Seven Technology Platforms" 2.0, including multiple smart electric black technologies, to create a new growth engine for the new racetrack.

For example, SAIC's all-solid-state battery will achieve mass production in 2026 with an energy density exceeding 400Wh/kg;

The Nebula platform further enhances energy efficiency, challenging the industry record of "12 km per kWh" of pure electric vehicle energy consumption through energy closed-loop technology;

The Zero-Bundle Smart Vehicle Full-Stack Solution 3.0 achieves "centralized + regional control," supporting L3-level mass-produced autonomous driving, which will be fully implemented in 2025.

While SAIC Motor has made progress in previous new energy transformations and independent brand development, it also faces significant challenges amidst the accelerating transformation of the automotive industry and the ever-changing international market.

Currently, SAIC Motor has ushered in a new leadership team, and it remains to be seen how the new leaders will accelerate the company's new energy transformation and achieve a breakthrough for its independent brands.