AutoBeta(AutoBeta.net)05/14 Report--

In May, in order to promote new car sales, SAIC held a 10-day offline promotion with its five major enterprises, with a 55% discount on a number of new cars, including SAIC Volkswagen, Cadillac, Buick, Roewe and other brands. Due to the remarkable effect of price reduction and promotion, SAIC officially announced the postponement of the event, while maintaining the original promotion efforts of the main products, a number of new cars were treated at special prices, and continued to launch 55% discount cars of Volkswagen, Buick and other brands.

SAIC sells new cars at a 55% discount through multiple channels.

It is very rare for manufacturers to vigorously promote the sale of new cars with sharp price cuts and 50% discounts in the market. one is to disrupt the price level originally maintained by dealers, and the other is to deal a serious blow to the brand image. The ongoing SAIC price reduction promotion campaign, in addition to responding to the policy call to stimulate car consumption, may also be a means to clean up inventory.

In May, SAIC Group, together with its five major enterprises, held offline promotional activities, with car prices as low as 50% discount, offering 50% discount on cars, car price concessions, fee subsidies, free purchase tax, zero down payment, and so on. Nine vehicle brands, including Roewe, Mingjue, SAIC Volkswagen, Skoda, Buick, Chevrolet, Cadillac, all participated in the promotions held by the manufacturers.

It is worth noting that the Cadillac CT4, which has been on the market for only one month, also participated in the 55% discount sales plan in this event, and the manufacturer is said to have launched more than 30 new CT4 cars with a 5.5% discount.

According to official sources, the event has received nearly 10,000 orders in the Shanghai area. SAIC believes that SAIC firmly grasps this major business opportunity and gives full play to the superposition effect of policies by means of "100 offline intensive activities" and "all-weather online exposure". It has boosted consumer confidence and promoted the recovery of automobile consumption.

In view of the remarkable promotion effect of the price reduction, SAIC announced that the price reduction would continue until the end of June. "We hope that in two months' time, the average monthly sales will double compared with the first quarter." Cai Bin, assistant to the president of SAIC, said so.

A number of models are on sale at this event, including SAIC-Volkswagen, SAIC-GM Buick, 200 new energy vehicles and 100 SUV5.5.

Not long ago, a number of Shanghai auto products have been sold at a 55% discount on pinduoduo's platform, including 55 SAIC new Cadillac XT5, Volkswagen Tuguan, Volkswagen Tuen, etc., with a maximum price reduction of nearly 160000 yuan. Among them, XT5 with a guide price of 349700 yuan will be sold at 192335 yuan after a reduction; Volkswagen Tuang with a guidance price of 299700 yuan will be sold at 181445 yuan; and Volkswagen Tuguan L with a guide price of 253,800 yuan will be sold at 139,59 yuan after a price reduction.

The 55% discount auto products sold by pinduoduo are led by the Shanghai Municipal Government, subsidized by pinduoduo, coupled with terminal discounts for brand dealers, and vehicles are provided by officially authorized dealers of the Shanghai auto brand.

Therefore, SAIC multi-channel 5. 5% discount sales, in the industry is also very rare.

Clear the stock?

In 2020, SAIC sales and performance have declined significantly. SAIC sold 1.0966 million vehicles from January to April, down 45 per cent from a year earlier and exceeding the 31 per cent decline in the overall market, according to the report.

Among them, SAIC-Volkswagen sold 303000 new cars from January to April, down 50.4% from the same period last year. SAIC GM sold a total of 290000 vehicles in the first four months, down 47.7% from the same period last year. SAIC GM Wuling fell 47% from the same period last year, with sales of 285000 vehicles.

According to the latest "Automobile Dealer inventory" data released by the China Automobile Circulation Association in April 2020, seven brands were named with inventory levels of more than 2.5 months. Three of them are SAIC brands, including Skoda, Roewe and SAIC Volkswagen.

Serious decline in sales, high inventory, price reduction promotion is a good solution. Therefore, the continued price reduction activities of the above-mentioned manufacturers, in addition to responding to the policy call to stimulate car consumption, may also be a means to clean up inventory.

Especially Skoda brand, in SAIC's operation for many years, the brand's sense of existence is getting lower and lower. Due to market pressure, Skoda brand took the lead in official price reduction measures in April this year, lowering product guidance prices and reducing brand market positioning at the same time. This is conducive to terminal sales and reduce inventory, but it is a serious blow to the brand.

SAIC performance plummeted

SAIC's total revenue in 2019 was 843.324 billion yuan, down 6.53 percent from the same period last year; the net profit attributed to shareholders of listed companies was 25.603 billion yuan, down 28.90 percent from the same period last year, resulting in a loss of 10.4 billion yuan. This is also the first decline in annual profits since SAIC went public 10 years ago.

According to the financial results for the first quarter of 2020, SAIC achieved operating income of 101.249 billion yuan, down 48.35% from the same period last year. The net profit belonging to shareholders of listed companies is only 1.121 billion yuan, a year-on-year decline of 86.42%.

With the decline of market competitiveness, premium and sales of its joint venture brands, the era of SAIC relying on joint venture brands to live a stable life may be over.

Not long ago, according to a report in the Shanghai Securities News, the sales and performance of SAIC have dropped again and again, and the senior management in Shanghai can no longer sit still. The situation of SAIC has attracted the attention of senior officials in Shanghai, and issued special instructions requiring SAIC to study the existing problems, including brand, quality and sales. At the same time, relevant departments in Shanghai will step up support for SAIC's nine major brands and a number of new cars.

Price reduction is an easy way to get sales, but the blow to the brand is also difficult to estimate. SAIC, including Volkswagen, Skoda, Buick, Chevrolet, Cadillac, Roewe, Mingjue, Wuling, Baojun, Chase and other brands, have encountered severe market challenges in the face of fierce competition. The problems of internal competition, product strategy, product strength, brand building and marketing level of many sub-brands all need to be solved urgently.

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