The automotive industry has always been a battlefield of giants,continuously evolving and adapting to the changing tides of technology and consumer preferences.Among these giants,SAIC Motor Corporation,known for its historical dominance in vehicle sales in China,recently experienced a significant phase of transformation.Once celebrated for its 18 consecutive years atop the vehicle sales charts and holding the title of the most valuable automotive company in the A-share market,the company faced a downturn as the new energy vehicle (NEV) market surged,leading to a decline in its stock performance.By mid-2024,SAIC ranked last among peer companies in terms of stock price increase over the same period,highlighting a pressing need for a turnaround.

However,a noticeable shift began on September 14,2024,when the company’s stock price initiated a remarkable rebound.Over the following 70 trading days,SAIC’s stock saw an impressive rise of 79.74%,adding approximately 106.6 billion RMB to its market value.The reasons behind this turnaround encapsulate not just market dynamics but also strategic internal adjustments within the corporation.

To understand the origins of this rebound,one must look at the competitive landscape of the Chinese automotive market.Historically,SAIC has combined joint ventures and independent brands to solidify its market presence.Nevertheless,the tides have shifted in 2024,with companies like BYD taking center stage.In June 2024,BYD sold 341,700 vehicles,a 28.46% increase year-on-year,while SAIC’s sales fell to 300,500 vehicles,down 25.92% from the previous year.This downward trend continued throughout 2024,where BYD's total sales skyrocketed to 4.27 million vehicles,marking a 41.26% increase.In contrast,SAIC’s wholesale vehicle sales dropped to 4.01 million for the year—a worrying 20.07% decline compared to 2023.

This downturn can be largely attributed to the rapid ascendancy of new energy vehicles in China,a market that took off in the second half of 2020 and continues to exert pressure on traditional combustion engine vehicle sales.While SAIC has made strides toward an electric vehicle transition,the growth in NEV sales did little to offset the heavy losses in its traditional fuel vehicle segments.By 2024,SAIC's wholesale NEV sales hit 1.23 million units,achieving a modest 9.90% increase but representing only a 30.75% share of its total sales.

The figures relay a stark reality: the company’s performance in fuel vehicle sales plummeted even more acutely.In 2024,SAIC’s fuel vehicle sales totaled 2.78 million,compared to 3.89 million in 2023,translating into a staggering dip of nearly 112,000 units.SAIC General Motors,a subsidiary focusing primarily on fuel vehicles,also reported a decline,selling only 435,000 units,down 566,000 units from the previous year.

The bleak outlook led to a considerable impact on SAIC’s profits,which are significantly driven by fuel vehicle sales.The ongoing transition toward electrification demands persistent investment,which places further strain on profitability in the short term.For the third quarter of 2024,SAIC reported total revenue of 145.8 billion RMB,marking a 25.91% year-on-year decline,with net profits crashing by 93.53% to just 280 million RMB.In the first three quarters of the year,revenues reflected a decline of 17.74% to 430.5 billion RMB,with net profits dropping by 39.45%.

These numbers tell a compelling story—a company actively pursuing transformation while grappling with the burdens of legacy operations.SAIC’s stock performance mirrored this challenge; from June 2020,when NEVs began to dominate the automotive scene,until September 2024,the company’s stock saw a decline of 23.32%,the worst among all publicly listed passenger vehicle companies on the A-share market.

Nonetheless,the tide turned with a dramatic resurgence following September 14,demonstrating that pressures can evolve into powerful momentum for change.This shift,characterized as “the elephant turning around” in the context of company reforms,allowed SAIC to reclaim some of its former glory and market respect.

The recent changes in SAIC's management played a critical role in instigating this turnaround.In July 2024,Wang Xiaoqiu was appointed as the new chairman,succeeding Chen Hong,while the young and dynamic Jia Jianxu stepped up as president.This management transition was not just superficial; it was accompanied by extensive adjustments across the company's core subsidiaries,with key posts being reshuffled to infuse fresh leadership and innovative thinking into operations.

This strategic shake-up also saw individuals from SAIC-GM Wuling,a subsidiary with a strong record in the NEV sector,being entrusted with more significant roles within SAIC.Notably,Xue Haitao,formerly VP of SAIC-GM Wuling,now occupies the deputy general manager position at SAIC General Motors.These appointments indicate a systematic approach to leveraging successful strategies from the NEV business into the broader organization.

In terms of operational strategies,SAIC has embarked on significant restructuring.The integration of resources within subsidiaries like SAIC Passenger Cars has led to notable brand consolidations.For instance,the merging of Feifan and Roewe brands,whereby Feifan will spearhead the high-end positioning of Roewe,indicates a focus on streamlining operations and enhancing brand value.Additionally,the Feifan RC7 project is reportedly set to relaunch,equipped with Huawei’s advanced autonomous driving technology.

Meanwhile,SAIC’s premium-focused brand,Zhiji,is sharpening its instruments for the mid-range market by partnering with Momenta to bolster its high-level intelligent driving capabilities.Zhiji plans to introduce a range-extended model,anticipated to compete directly with the likes of the Li Auto L7,set for debut in the first quarter of 2025.

SAIC’s Volkswagen subsidiary is also adapting its strategy to embrace both its fuel and electric vehicle segments.The guiding principles for this division are characterized as “promoting fuel vehicles while stabilizing electric vehicle growth and advancing Audi’s strategies.” Their goal is to double down on profitable gasoline engines while not neglecting the electric transition.By 2026,SAIC Volkswagen aims to unveil two new electric models harnessing CMP platforms and CEA electronic architecture.

Placing a spotlight on SAIC General Motors,the focus has been on instilling confidence within the dealer and consumer ecosystems amidst declining sales.The recently launched promotional campaigns aimed to reinvigorate interest.For instance,models like the Cadillac XT6 and XT5 have seen price reductions exceeding 100,000 RMB,which has begun to yield positive results.Notably,monthly sales figures ascended from approximately 15,000 units in July-August to a resounding 64,000 in December—a clear indication of the revival in consumer interest.

Furthermore,SAIC-GM Wuling is advancing with the ambition of “moving upward” in market positioning,aiming for greater brand prestige,elevated vehicle pricing,and improved profitability.In 2024,they successfully introduced new models,including the Wuling Xingguang and Wuling Xingguang S,gaining traction within the compact SUV and mid-size sedan markets,where prices have reached the vicinity of 100,000 RMB.

Overall,the proactive reforms under SAIC's new leadership seem to have sparked a revival.As the company strives to maintain its competitive edge,the question remains: can SAIC Motor Corporation further enhance its sales momentum and reclaim its title as the leading automotive choice in China?The coming months and years will undoubtedly shed light on this pivotal transformation journey.