Joint Ventures Flail While Domestic Brands Fail to Prosper — How Will SAIC Win the Battle for Survival?(AI Translation)

【周刊提前读】合资滑落自主未起 上汽如何打赢保卫战？

**Summary**

SAIC Motor Corporation Limited, a major player in the Chinese automotive industry, recently experienced significant managerial changes with Chen Hong retiring as Chairman and being replaced by former President Wang Xiaoqiu. Jia Jianxu, formerly SAIC Volkswagen's General Manager, has taken over as the President of SAIC Motor [para. 1]. This comes at a time when the company is facing intense competition from BYD, a new energy vehicle leader [para. 2]. In July 2024, SAIC Motor sold 251,000 vehicles, trailing 91,000 units behind BYD [para. 2].

Historically, SAIC Motor had reached a sales peak of 7.052 million vehicles in 2018 but saw a decline to 5.021 million in 2023 [para. 3]. For 2024 so far, sales stand at 2.078 million vehicles, a year-on-year decrease of 15.9% [para. 3]. Conversely, BYD’s sales have increased from about 500,000 units per year in 2018 to 3.024 million in 2023 [para. 4]. BYD's impressive rise is exemplified by its control of the plug-in hybrid vehicle market [para. 13].

SAIC Motor’s legacy lies heavily in its joint ventures, particularly SAIC Volkswagen and SAIC-GM [para. 6-7]. These partnerships accounted for 86.6% of the company's sales in 2018 but dropped to 72.1% in 2023 [para. 8]. While these joint ventures once thrived, their sales have nearly halved. SAIC Volkswagen and SAIC-GM have become less competitive, unable to maintain their market dominance due to internal and market dynamics [para. 9-11].

SAIC Motor has also ventured into developing its brands such as Roewe, MG, Zhiji, and Feifan [para. 12]. Despite early successes in new energy vehicle (NEV) technology, the company has lagged behind BYD in this area [para. 13]. A senior consulting firm executive attributes this lag to managerial constraints within SAIC’s state-owned enterprise structure and issues of talent outflow [para. 14-15]. Consequently, SAIC's NEV market share has been underwhelming. For example, Feifan's sales are negligible and the company's battery-swapping strategy has faced criticism [para. 20-21].

The company’s strategies in product development and market adaptation have also faced challenges. Joint venture management has struggled with the balance of power and technology sharing with foreign partners [10,11]. Moreover, the continuous turnover and ineffective management realignment have stifled innovation and responsiveness to market changes [15,16].

Recently, managerial positions within SAIC’s major subsidiaries, including SAIC-GM and SAIC Volkswagen, witnessed significant restructuring [para. 30-32]. The new management team, consisting of individuals with technical backgrounds and experience within SAIC's joint ventures, is expected to address inherent systemic issues [para. 36]. Notably, Lu Xiao's appointment as GM of SAIC-GM signifies a shift towards developing 100% locally-developed products in collaboration with both Chinese and foreign partners [para. 30].

However, broader challenges remain, such as increasing competition from global automakers and potential punitive tariffs on Chinese-made electric vehicles in Europe [para. 26]. Establishing overseas production remains a strategic necessity, but indecisiveness has delayed site selection for such factories [para. 27].

In summary, SAIC Motor must navigate through a complex landscape of internal realignment, increased market competition, and geopolitical pressures to regain its market standing. The company's future largely hinges on the effectiveness of its new management team and their ability to foster innovation within SAIC’s legacy frameworks [30-32,36].