SAIC Is Old? Sales Decline And New Energy Vehicles Are Flagging. What Will Chen Hong Bet On The Future?

"Strive to win the market this year. We did not perform well in the past few days. We also hope that our shareholders will be more enthusiastic and not discouraged. " In June 11th, Chen Hong, chairman of SAIC Group, said at the annual shareholders' meeting that a series of sharp questions from shareholders seemed to make the veteran too stiff.

SAIC faces many challenges. Over the past few years, SAIC has not been spared under the influence of the overall market downturn and the new crown epidemic situation. In the 4 and May of this year, SAIC's performance was relatively slow when part of the vehicle market and the overall market began to recover. SAIC as a "new four modernizations" vigorously promote the "electrification" progress is also less than expected.

At the same time, the external environment is becoming increasingly complex. Recently, SAIC's important partner, Volkswagen Group, deepened its cooperation with another domestic car company (Jianghuai Automobile) and raised its shareholding ratio to 75% in Jianghuai Volkswagen, so as to import a series of new energy vehicle products. As a Chinese shareholder of SAIC Volkswagen, SAIC is facing the risk of the introduction of new energy products into the Volkswagen Group.

At the shareholders' meeting, SAIC executives said that from the latest data, SAIC has improved. With the development of its own brand and the launch of new products by joint venture brands (such as Volkswagen MEB plant), the group is confident that it will stabilize the market share this year.

Chen stressed that SAIC and Volkswagen have been working together for decades, and SAIC Volkswagen will continue to play an important role in the future. He said that in the next five years, the two sides will invest another 140 billion yuan in the direction of transformation of new energy and intelligent network.

The pressure of big brother

SAIC has been under heavy pressure this year. In the first quarter of the epidemic, SAIC had a total sales of 679 thousand vehicles, down 55.71% from the same period last year. However, also affected by the epidemic, FAW Group, Changan group and Dongfeng Group sales fell by 22.56%, 32.12% and 46.36% respectively - SAIC as the "big brother" the highest decline.

After the gradual recovery of domestic epidemic situation, sales volume of car enterprises returned to growth track in 4 and May, but SAIC did not turn right until the recent May. Data show that in May this year, SAIC sold 473 thousand vehicles, compared with 480 thousand in the same period last year.

Chen Hong said frankly that the impact of the epidemic on SAIC is greater than that of other enterprises, because SAIC's dealership is much larger than that of other car companies, with 7000 or so, so the recovery is relatively slow. In addition, SAIC has an important production base in Wuhan, which has also affected the company's performance.

But he also said that the current performance has shown some positive factors, such as sales growth is higher than the overall market, the retail sales growth is significant (retail sales in 1-5 months higher than wholesale sales of 230 thousand vehicles, inventories significantly decreased); for example, only from the domestic sales volume, SAIC also achieved a positive growth of 0.3% over the same period in May - from the whole year, there are still Confidence outstrips the market.

For its sales force, SAIC Volkswagen, Chen acknowledged that SAIC Volkswagen's sales were squeezed to a certain extent. But from its popular brand, it is still the highest brand in the domestic market share, and the MEB plant of SAIC's new energy vehicle factory will be put into operation in October. The new product is expected to further improve the company's performance after listing.

Another joint venture SAIC general Chen Hong also said that after the three cylinder engine switched to a four cylinder engine, its models such as Ying long, the sales volume of last month has increased significantly.

In terms of its own brand, Wang Xiaoqiu, President of SAIC Group, which once took charge of SAIC passenger cars, said that the company's last round of product launch began in 2014, and sales decline in 2019 was also due to the end of this round of product launch. In fact, from the second half of the year, with the new product plus the original product's modified listing, the sales volume of its own brand is also gradually improving.

Wang Xiaoqiu said that the user appeal of the new generation of products is different from that before. It may have looked at "heart" before, but now it is "face". Roewe and queen also have made improvements in these aspects. In addition, the independent brand is also making a brand by entering the mature market. Last year, the famous HS and the pure electric Lord EZS exported to Europe, which is a key move to "brand up" the brand.

Opportunities in the new energy era

The new energy vehicle is an opportunity for transformation and upgrading of the traditional automobile industry, but SAIC's performance in this field is not satisfactory. Data show that last year, SAIC's new energy vehicle sales were 185 thousand, accounting for only 2.9% of the total sales volume, and the sales volume was not as good as that of BYD and other car companies. In the recent list of new energy vehicle sales, SAIC's cars failed to enter the top ten.

In addition, SAIC also used new energy vehicles as the driving force of brand upgrading. It has launched a highly positioned Marvel X, but the sales volume of Marvel X is not outstanding. Wang Xiaoqiu summed up the main reason is poor shape, he admitted that before modeling the understanding of new energy vehicles is conservative, did not accept the front face "no face", but did not realize that the owners of new energy vehicles in fact, there is a distinctive demand.

This year, SAIC passenger cars launched the high-end brand Roewe R standard of new energy vehicles, and met with users through the new model Marvel R, hoping to attack the high-end brand again. It is worth mentioning that Marvel R will continue to be equipped with a new intelligent network function to create a technology sense of electric vehicles.

In the joint venture brand, the electrification process of Volkswagen will accelerate this year. Chen Hong said that by the end of last year, the MEB factory of the public had been completed, and the first product will be launched in the fourth quarter of this year (around October). In twenty-first Century, the economic report has learned that the product will be a new product of the Volkswagen ID series, and the production time is earlier than that of FAW Volkswagen, which may win the initiative for SAIC Volkswagen's electrification process.

Intelligent network and electrification are the significant labels of new energy vehicles. Chen Hong, who has led the trend of Tesla's market value, has already asked for global car companies. "From the perspective of capital market, Tesla is not a car company, but a high-tech company, always positioning itself in high-tech, Internet based, software featured companies, which is also the direction of the transformation of the automotive industry, Tesla has taken the lead." Chen Hong pointed out that, like TOYOTA and SAIC, this volume of automobile group is almost impossible to transform into a technology company as a whole, but the car enterprise group will create technology blocks inside the company, integrate all aspects of technology accumulation, and bring the new technology to the ground quickly. "Now our new technology is still slow, and the key is to accelerate the landing speed."

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