SAIC GM Solves The Problem Of Brand Differentiation: Strive To Win The Market This Year And Next

In a twinkling of an eye, 2020 is coming to an end, and auto companies are about to hand in their final report cards.

For most car companies, 2020 will not be easy. Affected by the decline of the overall market, the emergence of new consumption trends and other factors, the domestic automobile market is brewing a dramatic change, many car companies began to reposition themselves.

"Our market growth is expected to recover to 7% year on year." On November 19, on the eve of the Guangzhou auto show, general manager Wang Yongqing of SAIC General Motors told reporters of the 21st century economic report that "although we have encountered various difficulties this year, the goal is also to win the domestic sales."

SAIC GM is one of the top three auto companies in domestic sales scale, and also one of the most important sources of sales and profits of SAIC Group. However, overall, SAIC GM's market performance this year is not satisfactory. Under the impact of the epidemic at the beginning of the year, although SAIC GM's sales gradually recovered in the second half of the year, the cumulative sales volume from January to October was 1.176 million units, a year-on-year decrease of 18% -- the decline rate was higher than 10% of the narrow passenger car market, and its market share further decreased to 7.3%.

SAIC GM's scale advantage is still there, but its development in recent years is difficult to meet the expectations of the previous management. As early as 2015, SAIC GM issued a high-profile 2020 strategy to the outside world. At that time, the company's target was to achieve an annual sales volume of 2.7 million-3 million, and its share in China's automobile market would reach 10%.

Now, SAIC GM overestimated the capacity of China's auto market in 2020 and underestimated the intensity of market competition.

In the past two years, China's auto sales have fallen unexpectedly. This year, affected by the new crown epidemic, it is expected to further shrink. According to the prediction of Roland Berger, an internationally renowned management consulting company, China's auto sales will show a negative growth of 8% - 10% in 2020, with a total scale of about 23 million vehicles.

In the process of the decline of market scale, the performance of major automobile enterprises is also gradually differentiated, especially in the new trend of electrification, the traditional automobile enterprises represented by SAIC general motors are facing more significant challenges. Some commentators pointed out that SAIC GM's total sales volume this year is still stable in the top three, but how to face this huge change market with the same ease after twists and turns is the next big problem that needs to be answered urgently.

Before answering this big question, SAIC GM first carried out a round of high-level transfer. At the media communication meeting on the 19th, except for Wang Yongqing, other senior managers of SAIC General Motors changed: Jiang Jiong, the former general manager of SAIC General Motors Wuhan Branch, replaced Shi Hong as the deputy general manager of SAIC general motors. Niu Feng and Zhou Peng were the marketing directors of Buick and Chevrolet brands respectively, while Gu yebin, who was in charge of Buick brand, was transferred to Cadillac's marketing department minister.

Under the new personnel layout, SAIC GM will carry out a series of adjustments to the three major brands.

The gap between the three brands is obvious

SAIC GM has Buick, Chevrolet and Cadillac. The former two brands are oriented towards the public, while the latter is positioned as luxury, which together constitute the cornerstone of SAIC GM's sales volume. However, this year, the performance gap of the three major brands is obvious, and the sales of Chevrolet are not good, which has greatly affected the overall performance of SAIC GM.

From January to October this year, among SAIC GM's three brands, only Cadillac, with the smallest sales volume, achieved a year-on-year positive growth. According to the data, Cadillac sold 178000 vehicles in the first ten months, up 17% year-on-year; Buick sold 687000 vehicles, down 5% year-on-year; while Chevrolet sold 242000 vehicles, down 44% year-on-year.

The automobile market has always been known as "gold nine silver ten". In October this year, the backlog of market demand was released, and many car companies and brands made breakthrough achievements. Buick and Cadillac's sales volume rose by 27% and 81% respectively in the same month, which both reached a new monthly sales record. However, the sales volume of Chevrolet in October still dropped by 29%, which was hard to recover.

Chevrolet has been in the Chinese market for 15 years, but this popular brand in the United States has not been ideal in the Chinese market in recent years. Data show that in the past two years, the sales of Chevrolet in the U.S. market were close to 2 million, but last year there were only 413500 vehicles in China. Now the sales share of SAIC GM has dropped to 20%, only one third of that of Buick.

The overlap in market positioning between Chevrolet and Buick is believed to be one of the reasons for the loss of sales. Some people who have long observed the automobile market pointed out that SAIC GM has three major brands in hand. In the incremental market, all brands can go hand in hand and rapidly expand the market scale, but it faces the risk of internal competition in the stock market.

Unreasonable product layout is one of the problems that GM brands are widely criticized in China. Different brands, even within the same brand, often compete with each other. This is particularly evident between Buick and Chevrolet.

Brand and product re carding is the work that SAIC GM needs to continue to promote in the next few years. "The key question is how to do differentiation well." Wang Yongqing also frankly said, "people, positioning, product differentiation must be done well."

In fact, SAIC GM is obviously aware of this problem. In recent years, at the annual media communication meeting, the marketing directors of the three major brands will jointly attend, trying to deepen the impression of the different positioning of each brand. Taking Chevrolet and Buick as examples, according to Wang Yongqing's summary, the target population of the former is "the social backbone of solid work and happy life", while the latter is "the social backbone of innovation and enterprising".

After sorting out the brand positioning, Chevrolet still needs to "suit the medicine to the case". Different from that in the United States, Chevrolet has a low brand tone in the Chinese market and is gradually marginalized in the wave of consumption upgrading. It is obvious that in the future, it is necessary to strive for brand improvement by adjusting product structure and other means.

Zhou Peng, the new marketing director of Chevrolet, said that Chevrolet attaches great importance to the consumption upgrading trend of China's automobile market, and has launched corresponding market research to prepare for the next stage of product planning. He also introduced that several North American heavy-duty models such as the eighth generation Chevrolet Corvette hardtop convertible displayed during the Expo had a very good response, implying that these models would also provide reference for the design of the next generation of products.

New energy vehicles ready

The simultaneous development of various brands is the guarantee for SAIC GM to remain in the top three sales volume. However, in the medium and long term, with the industry reform, SAIC GM also needs to have a layout in new fields.

With the development of the automobile industry in the direction of electrification and intellectualization, the focus of the market is gradually attracted by hot concepts such as electric vehicles, Internet of vehicles, intelligent driving, etc. in this wave, the new forces of automobile manufacturing and independent automobile enterprises are moving forward. In comparison, the large-scale joint venture vehicle enterprises represented by SAIC-GM are slow.

In the past two years, SAIC GM and its parent company, general motors, have announced their plans for electrification more than once. However, its new platform for pure electric vehicles has not yet been put into mass production. The late arrival of the new generation makes GM miss opportunities again and again in the competition with new forces such as Tesla, and even makes it difficult for the outside world to link its brand with new energy vehicles.

As far as GM is concerned, it is not enough for GM to communicate with other companies in the traditional power market.

On the one hand, SAIC GM has launched four or five new energy products this year, and obtained good feedback in the market; on the other hand, starting next year, with Cadillac's first pure electric vehicle on the market, SAIC GM will launch a new generation of high-end electric vehicles in the next few years.

During 2025-2020, the company will introduce three new models, namely, wangyongqing, SAIC, and SAIC to meet the needs of different brands. "In terms of technology reserve, general motors is the pioneer of new energy vehicle technology development, and we are speeding up the development of new energy products." He said.

In Wang Yongqing's view, although the joint venture vehicle enterprises entered the new energy vehicle field relatively late and belong to the "third echelon", they still have their own unique advantages in product strength and configuration. The pure electric vehicle developed on the new platform will present a totally different look and feel. With more intelligent technology, it is believed that it can have a certain competitiveness.

"For example, the enhanced super cruise can change lanes automatically on expressways. From 2023 to 2024, intelligent technology suitable for more scenes will also be configured on the third generation of electric vehicles, including more advanced automatic following, automatic parking technology, intelligent driving, etc

It should be pointed out that pure electric is not the only direction of SAIC GM's future layout. Under the trend of automobile emission reduction, SAIC-GM will also develop energy-saving technology of internal combustion engine and promote its application in products. It is reported that a large number of SAIC GM models will be equipped with 48V light hybrid technology next year. (Editor: He Fang)

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