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In terms of vehicle exports, SAIC Motor was once the leader for many years. According to official data from SAIC Motor, the group sold 1.208 million vehicles overseas in 2023, an increase of 18.8% year-on-year, maintaining its position as the top Chinese automaker in overseas sales for the eighth consecutive year. Among them, new energy vehicles accounted for nearly 24%, and sales in Europe reached 330,000 units.

However, as overseas "targeting" intensifies, SAIC Motor is also facing challenges abroad. Its sales report shows that from January to September this year, SAIC Motor's cumulative exports and overseas base sales reached 739,200 units, a year-on-year decrease of 11.78%. Over the same period, Chery Holding Group exported 829,400 vehicles, an increase of 24.5% year-on-year. Chery has regained its position as the top exporter among Chinese automakers.

According to media reports, at the 2024 Mid-Year Cadre Conference held in August this year, the newly appointed President of SAIC Motor, Jia Jianxu, stated that the company would accelerate the pace of establishing factories overseas, even if faced with numerous difficulties.

In the past period, the increasing number of policies targeting domestic automakers overseas has affected their international expansion plans. Nevertheless, going global remains the choice of most automakers, including SAIC Motor.

01

Pioneering in Going Global

Among domestic automakers, SAIC Motor was among the first to venture into the international market.

In July 2005, Nanjing Automobile Group acquired the UK's MG Rover Automobile Company and its engine production division. Two years later, SAIC Motor completed its acquisition of Nanjing Automobile Group, bringing MG into its fold and embarking on its mission to expand globally.

Furthermore, in 2009, SAIC Motor acquired the core assets of the UK's LDV and established SAIC MAXUS on its foundation, leveraging the existing popularity and influence of the MAXUS brand to introduce SAIC MAXUS globally.

In 2011, SAIC MG returned to the UK market with the MG6, although without establishing a production base there. Instead, SAIC Motor accelerated its production layout in Southeast Asia.

In 2012, SAIC Motor announced a joint venture with Charoen Pokphand Group in Thailand to establish SAIC-CP Motor, where it licensed the production and sales of right-hand drive MG vehicles, establishing a production base for such vehicles in Thailand targeting both local and export markets. In 2017, the second SAIC-CP plant in Thailand commenced operations. In May 2023, SAIC Motor announced the construction of a new energy vehicle industrial park in Thailand, covering an area of 120,000 square meters and capable of locally producing core electric vehicle components. In October of the same year, SAIC-CP officially opened its first battery production plant.

According to data, in 2015, SAIC Motor announced its entry into Indonesia alongside General Motors to establish a production base. In 2017, Wuling Motors Indonesia, a subsidiary of SAIC Motor, officially commenced operations in Cikarang, Indonesia. In April 2023, Wuling Indonesia signed a memorandum of understanding with the Indonesian government on a new energy project investment, pledging to actively expand investments in Indonesia and deepen its involvement in the country's new energy vehicle industry and ecosystem construction.

India is another production base targeted by SAIC Motor. In early 2017, SAIC Motor acquired and transformed General Motors' Halol plant in India to produce MG vehicles, establishing a wholly-owned subsidiary, SAIC MG Motor India Private Limited.

SAIC Motor's official website indicates that it has established three overseas manufacturing bases in Thailand, Indonesia, and India, as well as a KD factory in Pakistan. It has also set up three innovation R&D centers in Silicon Valley, Tel Aviv, and London, and multiple regional marketing service centers across Europe, South America, the Middle East, North Africa, Oceania, and ASEAN. With over 1,800 overseas marketing service outlets, SAIC Motor has developed six "50,000-unit-level" overseas markets in Europe, ASEAN, Oceania, South Asia, the Americas, and the Middle East.

This extensive global layout once made SAIC Motor the leader in going global. In 2016, SAIC Motor exported and sold a total of 129,000 vehicles overseas, a year-on-year increase of 50%, surpassing Chery and ranking first in the country for the first time. In the following years, SAIC Motor continued to lead the country in exports.

02

Export "Obstacles"

However, SAIC Motor's export momentum may have been impacted by overseas policies, showing signs of weakening.

In October 2023, the European Commission initiated an anti-subsidy investigation into Chinese electric vehicles. In July this year, the European Commission announced that after a nine-month anti-subsidy investigation into Chinese electric vehicles, it had decided to impose provisional anti-subsidy duties on electric vehicle imports from China.

These provisional tariffs took effect on July 5, 2024, and will last for a maximum of four months. SAIC Motor faces the highest tariff rate of 37.6%, while Geely faces 19.9% and BYD 17.4%. Other automakers that cooperated with the EU investigation face an average tariff rate of 20.8%, while those that did not cooperate face a tariff rate of 37.6%.

SAIC Motor has responded by officially requesting a hearing from the European Commission on the temporary anti-subsidy measures on Chinese electric vehicles, further exercising its right of defense in accordance with the law.

On October 4, 2024, EU member states voted on whether to impose high tariffs on electric vehicles exported from China to the EU. Ultimately, with 10 votes in favor, 5 against, and 12 abstentions, the 27 EU member states supported imposing tariffs of up to 45% for a period of five years on electric vehicles exported from China to the EU. The European Commission will publish the final results of the anti-subsidy investigation and implementation measures for the additional tariffs in the Official Journal of the European Union by October 30.

However, it is reported that negotiations are still ongoing, and it is unclear whether the final outcome will result in a reversal.

For SAIC Motor, the EU is a major export market and is inevitably affected. According to SAIC Motor's sales report, its monthly sales for exports and overseas bases declined by double digits in most months from January to September this year, with only March and April recording growth rates of 8.83% and 2.7%, respectively, and a decline of 4.2% in May.

Overall, from January to September this year, SAIC Motor's cumulative exports and overseas base sales reached 739,200 units, a year-on-year decrease of 11.78%. Its leading position in going global has been regained by Chery.

Some believe that after the anti-subsidy measures take effect, the best option for automakers is to establish factories in the EU. SAIC Motor has plans in place. According to media reports, SAIC Motor is considering establishing its first electric vehicle factory in Europe in Spain to produce MG-branded models for sale in various European markets. Currently, SAIC Motor is in negotiations with the Spanish Ministry of Industry regarding the construction of the factory. As planned, the factory will commence operations in the fourth quarter of 2027. Additionally, Spain is not the only option for SAIC Motor, as Hungary and the Czech Republic are also being considered.

However, factory construction takes time, so SAIC Motor is accelerating the introduction of HEV/PHEV models that are not subject to tariffs. SAIC Motor has stated that it will launch one PHEV and two HEV new products in the second half of the year to maintain its market share in Europe. In the future, it will optimize its global production and sales layout, including markets in the Middle East and Southeast Asia, to balance potential fluctuations in the EU market. SAIC Motor is accelerating the pace of site selection and factory construction in Europe and will soon announce its global strategy, as globalization is a firm commitment for the company.

SAIC Motor has also encountered setbacks in India. In June 2023, rumors circulated that the JSW Group was attempting to acquire a stake in SAIC MG Motor India Private Limited, a wholly-owned subsidiary of SAIC Motor in India.

In April this year, SAIC Motor announced the "Announcement on Equity Transfer and Capital Increase of Subsidiary" stating that to continuously increase MG's market share in India and effectively prevent operational risks, MG India intended to introduce local Indian investors. The JSW Group subscribed to a 26% stake in MG India for INR 26.51 billion (approximately RMB 2.256 billion) and an additional 354 million shares for INR 9.26 billion (approximately RMB 788 million). After the transaction, the JSW Group holds a total of 35% of MG India's shares. SAIC Motor will retain a 49% stake and a higher proportion of voting rights in MG India. This joint venture not only leverages local resources but also aligns with India's demands for local industrial protection.

However, given the current situation, changes in overseas policies will present challenges for international expansion. SAIC Motor must navigate these changes to find a path for compliant and sustainable development in the future.

Author | Fanie

Source | WhaleDimension (ID: WhaleDimension)

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