01/03 2025 380
The year 2024 was a challenging one for SAIC Motor.
Sales data revealed that in the first 11 months of the year, SAIC Motor was overtaken by BYD. BYD reported cumulative sales of 3.7573 million vehicles, marking a 40% year-on-year increase, while SAIC Motor's sales amounted to 3.53 million vehicles, a decrease of 19.48% year-on-year. The sales gap between the two companies reached 200,000 vehicles.
BYD's ascendancy signals a significant shift, indicating that the long-standing dominance of joint ventures in China's auto market is evolving. For SAIC Motor, this marks the first time in nearly 20 years that it has lost its position as China's top auto seller.
In addition to sales challenges, SAIC Motor faced another blow with the adjustment of the SSE 50 Index constituents.
According to a previous index adjustment announcement by the Shanghai Stock Exchange, five stocks were replaced in the SSE 50 Index. Thalys, CRRC, Beijing-Shanghai High-Speed Railway, China Molybdenum, and Cambrian were added, while TBEA, SAIC Motor, Pien Tze Huang, Power Construction Corporation of China, and GigaDevice Semiconductor were removed. The adjustment took effect after the market close on December 13th.
Despite these multiple negative factors, it's noteworthy that SAIC Motor's performance in the capital market has gradually improved.
As of the last trading day of 2024, SAIC Motor's share price closed at 20.76 yuan per share, with a total market capitalization of 240.3 billion yuan. If calculated from the stage low of 11.49 yuan per share on September 18th, in less than three months, SAIC Motor's share price has nearly doubled, and its market value has surged by over 110 billion yuan.
Share price movements often anticipate a company's operating conditions. From this perspective, after a difficult 2024, SAIC Motor may usher in a "drastic change" in 2025.
"Signs of Fatigue"
SAIC Motor is a giant in China's auto market.
Historically, the market often referred to China's auto industry as having "one superpower and three strong players." While the "three strong players" were somewhat controversial, the "one superpower" was undoubtedly SAIC Motor, underscoring its prominent position in the auto market.
However, in the face of the new energy wave, SAIC, this "super giant," is starting to show signs of fatigue.
Statistics reveal that SAIC Motor's three main subsidiaries—SAIC Volkswagen, SAIC GM, and SAIC-GM-Wuling—achieved sales of 1.215 million, 1.001 million, and 1.4031 million vehicles, respectively, in 2023, totaling 3.619 million vehicles. Notably, this number was 6.1067 million in 2018, indicating a decline of over 40% in sales over five years.
Entering 2024, SAIC Motor faced an even more challenging situation, impacted by the rise of independent brands. According to official data, SAIC Volkswagen's cumulative sales for the first 11 months were 1.018 million vehicles, down 5.06% year-on-year; SAIC GM's cumulative sales were 370,900 vehicles, down 58.61% year-on-year; and SAIC-GM-Wuling's cumulative sales were 1.1605 million vehicles, down 3.4% year-on-year.
To revive sales, SAIC Motor has employed various strategies, including "price wars."
Reports indicate that since this year, SAIC Motor has launched a "one-price" discount promotion campaign, offering substantial price reductions to boost sales. Over a hundred models across 13 vehicle brands under SAIC Motor, including IM Motors, Roewe, R-Auto, MG, MAXUS, Wuling, Baojun, Audi, and Volkswagen, offered promotional discounts in November, with overall discounts ranging from 50% to 80% after combining trade-in subsidies.
These substantial price reductions have eroded SAIC Motor's profits. Financial reports show that as of the third quarter of this year, SAIC Motor achieved revenue of 430.6 billion yuan, down 17.74% year-on-year; net profit of 6.907 billion yuan, down 39.45% year-on-year; and core net profit of 1.05 billion yuan, down 88.92% year-on-year.
Fortunately, with various promotions, SAIC Motor's sales rebounded in November. Taking SAIC Volkswagen, SAIC GM, and SAIC-GM-Wuling as examples, SAIC-GM-Wuling sold 180,000 new vehicles in November, up 12.5% year-on-year; SAIC Volkswagen sold 132,500 new vehicles in November, up 10.41% year-on-year; while SAIC GM performed slightly weaker, selling 56,200 new vehicles in November.
For SAIC Motor, 2024 was indeed a challenging year, with various data declining amidst a fiercely competitive market environment. However, with the rebound in sales in November, the pressure on SAIC Motor began to gradually ease, and there were signs of a "counterattack".
SAIC's "Counterattack"
SAIC Motor's share price embarked on a fierce counterattack after entering September.
As of the last trading day of 2024, SAIC Motor's share price closed at 20.76 yuan per share, with a total market value of 242.2 billion yuan. If calculated from the year's low of 11.49 yuan per share, in less than three months, SAIC Motor's share price has nearly doubled, and its market value has surged by over 110 billion yuan.
Over the same period, the Shanghai Composite Index increased by approximately 24%, which, while also performing well, was outperformed by SAIC Motor.
So, why has SAIC Motor's share price performed so strongly?
We believe that SAIC Motor now has all the conditions for a "counterattack".
Moreover, besides the rebound in sales of joint venture brands, SAIC Motor's independent brands have also been very active recently. In November, the once-independent R-Auto returned to SAIC Roewe. According to media analysis, this move indicates that SAIC Motor is emphasizing resource integration in management models, strengthening collaboration, and intensifying marketing efforts to achieve business collaboration and cost-sharing across the group's various segments, thereby reducing customer acquisition costs and improving conversion rates.
On the other hand, IM Motors, the main new energy brand, is also starting to "take off".
Statistics show that in the first 11 months of this year, IM Motors achieved sales of 58,000 vehicles, a year-on-year increase of 106.5%. Currently, IM Motors is planning market opportunities and technical routes for medium and large MPVs and SUVs. In 2025, IM Motors will launch two pure electric and two extended-range vehicles, totaling four new products. It is foreseeable that monthly sales exceeding 10,000 is just the beginning, and IM Motors' sales should perform well in 2025.
As an auto giant, the reason SAIC Motor fell behind in the past two years is mainly due to its inadaptation to the new "pace of the times." In the era of fuel vehicles, the industry rule was "a minor facelift every three years and a major facelift every seven years"; however, in the era of new energy vehicles, models are generally updated every six months, with a very fast iteration speed. Previously, Jia Jianxu, General Manager of Shanghai Volkswagen, publicly reflected that their current development process is still sequential, leading to delays in many aspects.
However, after several years of "adjustment" in the past, SAIC Motor has apparently gradually adapted to the pace of the new energy vehicle era. Taking IM Motors as an example, in October, IM Motors' IM AD mapless city NOA was officially launched nationwide across the entire product line, becoming the fourth company in the industry to implement a "nationwide drivable" mapless city NOA.
Judging from the current progress, after a challenging 2024, SAIC Motor is poised to embark on a counterattack in 2025.