AutoBeta(AutoBeta.net)07/06 Report--

SAIC Group released the latest production and marketing KuaiBao, finally ushered in the first monthly sales growth since 2020, but the two major joint ventures SAIC Volkswagen and SAIC General Motors continued to decline. As a result of six consecutive months of decline, the two joint ventures also recorded a decline of more than 30% in the first half of the year.

According to the data, SAIC sold 479000 vehicles in June, up 2.8% from a year earlier. In terms of cumulative sales, SAIC sold 2.0491 million vehicles in the first six months, down 30.24% from a year earlier.

SAIC-Volkswagen has been in a state of decline since 2020, even if the car market picks up and most car companies achieve a year-on-year increase in sales, SAIC-Volkswagen still fell slightly. SAIC-Volkswagen sold 143275 vehicles in June, down 7% from a year earlier; in the first half of the year, it ranked first among its subsidiaries with cumulative sales of 577400, but it also had the biggest year-on-year decline of 37.18%.

The continuous decline of SAIC-Volkswagen is related to the poor performance of Passat, which affects the brand reputation and corporate reputation, as well as the marginalization of Skoda brand, marketing promotion and product strategy. To this end, in April this year, the Shanghai Auto Skoda brand announced an official downgrade and lowered its market positioning, becoming the first brand to officially reduce its price in 2020. The Volkswagen brand also accelerated the launch of new products, and after launching the new Passat model, SAIC Volkswagen Varan medium and large MPV was launched in May.

SAIC GM has not stopped falling, with sales of 130863 vehicles in June, down 7 per cent from a year earlier, and cumulative sales of 556200 vehicles in the first half, down 33.31 per cent from a year earlier. It is pointed out that SAIC GM has paid a price for its "price for volume" market strategy in recent years, which has led to internal friction among Buick, Chevrolet and Cadillac, resulting in a decline in brand premium and market competitiveness.

At present, SAIC GM accelerates the progress of product launch and makes compromises to the market in terms of product strategy. A number of main Buick and Chevrolet cars have launched four-cylinder naturally aspirated models to solve the dilemma that there are only three-cylinder engines for consumers to choose from. In addition, SAIC GM made efforts in new cars, with the launch of new GL8 cars, Chevrolet Trail Blazers and Cadillac CT4 in the first half of the year. GM is already looking for ways to stop the decline in sales in China, and whether it works still needs to be tested by the market.

SAIC GM Wuling sold more than the same period for three months in a row, with sales of 124000 vehicles in June, up 24 per cent from a year earlier and 531000 in the first half, down 28.69 per cent from a year earlier. It is reported that with the opening of the "stall economy", SAIC GM Wuling sales are expected to usher in a short period of rapid sales growth. In the field of passenger cars, as the MPV market is not as expected, Wuling and Baojun brands are also seeking brand upgrading and transformation, while promoting the mini electric vehicle market.

In terms of independent brands, SAIC sold 48310 passenger cars in June, down 3.48% from a year earlier. Ting sold 241500 vehicles from January to June, down 22.52% from a year earlier. Compared with the first-line independent brands, the market competitiveness of Roewe and Mingjue brands is still weak.

The decline in sales and performance of SAIC has sounded the alarm for enterprises. In May this year, the Shanghai Securities News reported that the sales and performance of SAIC Group had dropped again and again, and the senior management of Shanghai could 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.

According to the report, SAIC achieved a net profit of 25.603 billion yuan belonging to shareholders of listed companies in 2019, down 28.90 percent from a year earlier, resulting in a loss of 10.4 billion yuan. According to the first quarter of 2020, SAIC achieved only 1.121 billion yuan in net profit attributable to shareholders of listed companies, a year-on-year decline of 86.42%.

To solve the problem of continuous decline in performance, SAIC should start with SAIC-Volkswagen and SAIC-GM "profit cow" joint ventures to restore positive sales growth. At present, SAIC has encountered severe market challenges, with a decline of 30% higher than the average level of the overall market. SAIC is still facing greater performance pressure in the second half of the year.

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