As one of the mainstream joint venture automakers in the Chinese market, SAIC-GM once fought fiercely with FAW-Volkswagen and SAIC Volkswagen, and was also one of the two pillars of SAIC Motor Group during its heyday.

However, after the decline of Chevrolet, Buick and Cadillac have also struggled in the market, and SAIC-GM has been surpassed by domestic automakers such as BYD, Geely Automobile, and Great Wall Motor. Its once top three sales ranking has slipped to eighth.

SAIC-GM once sold 2 million vehicles annually, but in 2023, sales plummeted to 1 million, a direct halving of sales! It was like going back to 2010 overnight!

SAIC-GM could no longer sit idly by. After a major shake-up of senior leadership, various models were introduced with significant price cuts to save the company.

SAIC-GM is using historically low prices to counter the challenges posed by domestic automakers and new energy vehicles. It is waging the largest-scale counterattack by a joint venture automaker against domestic automakers in history.

After the Regal and LaCrosse models were replaced with price reductions of 30,000 yuan, Cadillac, Buick, and new energy brands and series have successively introduced "limited-time fixed pricing" policies: Cadillac XT5 prices have dropped by more than 130,000 yuan, Buick Envision PLUS prices have dropped by 60,000 yuan, and Buick E5 new energy prices have dropped by 35,000 yuan. We believe this is not the last price cut.

However, if the decline in auto sales is merely due to pricing issues, then SAIC-GM would be too naive. Although this is currently the most effective and convenient thing it can do.

SAIC-GM reached its peak sales of 2 million vehicles in 2017, its 20th anniversary. Sales have declined annually over the past seven years. According to production and sales data released by SAIC Motor, combined sales of Cadillac, Buick, and Chevrolet from January to August 2024 totaled only 256,400 units, a year-on-year decrease of 58.92%.

It is reported that SAIC-GM's four major production bases in Shanghai, Yantai, Shenyang, and Wuhan have an annual production capacity of up to 1.9 million vehicles. If production lines are not shut down, its capacity utilization rate may be the lowest among mainstream Chinese automakers, and SAIC Motor may not be able to absorb its excess capacity, leaving SAIC-GM with no other options.

According to SAIC Motor's financial report, SAIC-GM contributed a net profit of 2.5 billion yuan to SAIC Motor in 2023. However, the company reported a loss of 4.54 billion yuan (net profit attributable to shareholders of the parent company: -2.27 billion yuan) in the first half of this year, marking its first semi-annual loss since its establishment in 1997.

If SAIC-GM fails to achieve significant sales growth while sacrificing current profits, it risks falling into an annual loss, significantly impacting SAIC Motor's overall financial performance.

SAIC-GM is trapped in the curse of one million annual sales, just like Chang'an Ford and Beijing Hyundai, which have fallen from grace after reaching the one million sales milestone and have struggled ever since.

Facing competition from traditional rivals like Toyota and Honda, Chang'an Ford and Beijing Hyundai once abandoned their price floors in an attempt to win back Chinese customers. However, their era of one million sales is long gone, and the same fate may await SAIC-GM, which must now confront the dual challenges posed by domestic automakers and new energy vehicles.

After discontinuing certain models and plants, Chang'an Ford and Beijing Hyundai have become more agile in responding to challenges in the Chinese market, thriving in their respective niche segments more than ever before.

Most unfortunately, Cadillac, once a leading second-tier luxury automaker in China, may now face the reality of returning to being an imported brand, given its current sales performance and market competition.

Today, SAIC-GM relies solely on the Buick GL8 to maintain its once dominant market position. With a market share of over 2 million vehicles, the Buick GL8 continues to lead the MPV market, thanks in part to its two-generation sales strategy that solidifies its premium position.

However, as domestic new energy MPVs like the Toyota Sienna, Tengshi D9, and Zeekr 009 gain ground, the Buick GL8 can only rely on SAIC Motor's electric technology to create a green-licensed version exclusive to the Chinese market, marking SAIC-GM's helplessness in the face of competition in the Chinese automotive market.

SAIC-GM is unwilling to relinquish its status as a one-million-vehicle automaker. However, after abandoning Opel's sedan resources and facing challenges from new energy vehicles, SAIC-GM has fallen into a product gap in the Chinese market.

General Motors' exit from the European market has distanced it from the forefront of global new energy vehicles. Meanwhile, its hardcore off-road models from the US cannot enter the world's largest automotive market, China. Sales declines cannot be easily reversed through price cuts alone.

SAIC-GM is unwilling to sit idly by, but its over 70 billion yuan investment in new energy vehicles has failed to make a splash in the Chinese market with low prices.

As prices continue to drop, they will eventually hit the cost threshold. What's next? Should SAIC-GM follow the example of new automakers and sell cars at a loss?

Whether it's rumored asset-light operations, shutting down production lines or layoffs, or even exiting the Chinese market, SAIC-GM has many options. For example, it could adopt SAIC Motor's technology to develop new energy vehicles. However, the first thing it must recognize is that it can no longer aspire to return to its former status as a one-million-vehicle automaker.

As General Motors struggles against Toyota in the North American market and partners with Honda and Hyundai in the global new energy vehicle market, exiting the Chinese market is not an option. However, breaking through the current challenges is no longer solely within SAIC-GM's control.

Ford has reestablished its global image in the Chinese market with its hardcore off-road SUVs, while Hyundai has risen to the top three globally. For General Motors, abandoning the European market was a mistake; it must not lose the Chinese market as well.

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