SAIC Volkswagen personnel readjusted, learn BYD? What are the odds?

SAIC Volkswagen recently announced that it will use 3.7 billion yuan to join the price reduction army, reducing its models by up to 50,000 yuan, and extending the event to April 30.

SAIC Volkswagen, which was originally considered relatively stable by the outside world, could not sit still.

Recently, SAIC Volkswagen issued a pre-appointment announcement that Fu Qiang, the current manager of SAIC Volkswagen brand sales and channel department, intends to be the manager of SAIC Volkswagen's brand marketing division; Xie Shiqi, manager of SAIC Volkswagen brand ID marketing department, intends to serve as the deputy manager of SAIC Volkswagen brand marketing department.

The price reduction of models and the major adjustment of personnel are no longer ordinary changes, but determine the development direction of SAIC Volkswagen in the coming period.

So, what effect will this adjustment have?

01. The voice of the ID series is improved

SAIC Volkswagen brand, it is very difficult to read.

Simply put, SAIC Volkswagen has three brands: Volkswagen, Audi and Skoda, Fu Qiang intends to be in the marketing department of the Volkswagen brand, and Xie Shiqi is his deputy.

There are two notable aspects of Xie Shiqi's appointment.

First of all, SAIC Volkswagen has never had the position of deputy department manager in its history, and this is a new one.

Secondly, Xie Shiqi also served as the manager of the ID marketing department this time.

Xie Shiqi's position is obviously "high-fied".

It can be seen that SAIC Volkswagen attaches great importance to ID series electric vehicles.

In 2022, the cumulative sales of SAIC Volkswagen's ID. series models will be 74,000 units, which is the first echelon among many joint venture models, which also gives SAIC Volkswagen more confidence to promote the development of electric vehicle business.

It is worth mentioning that SAIC Volkswagen ID. series also has its own unique sales channel.

According to SAIC Volkswagen's official data, by the end of 2022, the cumulative number of SAIC Volkswagen new energy city showrooms ID.Store opened has exceeded 200, covering 88 cities across the country, and this number may increase to 300 in the future.

With a certain user base, a higher right to speak, and gradually improving sales channels, it seems that the SAIC Volkswagen ID. series will do a lot in 2023.

In fact, the sales of SAIC Volkswagen ID. series of 74,000 vehicles a year are not bright, that is, the sales of BYD Song PLUS in one month at its peak, but compared with Toyota and Honda, which are still struggling, it is at least on the road.

02. Is this transformation speed enough?

Xie Shiqi, as the manager of the marketing department of ID., is highly qualified as the deputy position of Fu Qiang, the manager of the marketing department of the Volkswagen brand, which is not a small move.

But looking further ahead, in September 2022, SAIC Volkswagen also made adjustments to larger moves.

In the reform in September 2022, the marketing department of SAIC Volkswagen's Volkswagen brand established three new model groups, namely SVI, SVH, SVV, of which SVI refers to the ID. department led by Xie Shiqi, SVH model group is mainly responsible for high-end models such as Passat and Tiguan, and SVV department is responsible for low-end models such as Lavida, Polo, and Lingdu L.

The three model groups originally belonged to the "level unit", but this time Xie Shiqi became Fu Qiang's deputy, and the other two model groups did not have such treatment for the time being, which seems to indicate that SAIC Volkswagen really attaches great importance to new energy vehicles and is willing to invest more resources in ID. series models.

But is such an adjustment of SAIC Volkswagen really enough?

I'm afraid it's not so optimistic.

At this stage, SAIC Volkswagen is facing a relatively obvious problem: it is really inseparable from fuel vehicles.

In 2022, SAIC Volkswagen sold 74,000 units of the ID. series, but SAIC Volkswagen's sales in 2022 reached 1.27 million units.

In other words, SAIC Volkswagen ID. series needs to use the profits earned by the fuel vehicle business to support its own development.

However, China's fuel vehicle market has stopped growing rapidly.

According to the predictions of professional organizations such as the Passenger Association, the Chinese car market will have zero or negative growth in 2023, while the sales of new energy models will increase from 5.67 million units in 2022 to 8.5 million units in 2023.

This extra 3 million vehicles is equivalent to saying that it is completely a market grabbed from fuel vehicles.

SAIC Volkswagen wants to use the profits created by fuel vehicles to support the development of the ID. series; but in the case of weak growth of fuel vehicles, in order to have enough profits, it is necessary to accelerate the research and development of new models, but the research and development of new fuel models must increase investment, which is inconsistent with the direction of the company's transformation to electrification.

In fact, it is not uncommon for some departments to make money within a company to support others.

Ren Zhengfei's original positioning for Huawei's mobile phone business was to "make money and support HiSilicon", and did not set any profit requirements for HiSilicon; BYD founder Wang Chuanfu also expressed that "BYD's development of oil vehicles is to accumulate experience for the development of electric vehicles".

But the problem is that Huawei and BYD both have a strong founder, and SAIC Volkswagen is an old joint venture company with intertwined interests, and how to deal with the relationship between fuel vehicles and new energy vehicles will be a big problem.

03. The performance of the ID. series is the key to breaking the game

For SAIC Volkswagen, the ideal state should be this: with sufficient investment and support, the sales of ID. series models will continue to increase, and then the company's internal resistance to the development of electric vehicles will be reduced, forming a virtuous circle, and eventually all its models will be "new energy".

Then, Volkswagen will transform into a real new energy vehicle manufacturer.

But if the sales of the ID. series are not good, this envisaged virtuous circle will become a vicious circle: the ID. series burns money but sales do not go up, but the company's plan for the transformation to new energy will not change, and can only continue to reduce investment in the fuel vehicle business, and the decrease in investment in the fuel vehicle business will lead to a decline in sales and no money to support the development of new energy.

In the end, SAIC Volkswagen will fall into the dangerous situation of not winning the electric vehicle market and losing traditional fuel vehicles.

It can be said that in the next few years, the possibility of a significant increase in sales and profits of SAIC Volkswagen fuel vehicles is very low, so if it wants to break the game, it can only hope that the ID. series models will become popular.

To put it bluntly, SAIC Volkswagen is in a race against time.

But what the prospects for the future ID. series will be, it is difficult to say.

You see, SAIC Volkswagen has invested a huge amount of money, but the sales of the ID. series in 2022 will only be 74,000 units, which is obviously not up to standard.

Conclusion

The advantage of SAIC Volkswagen is that it is going in the right direction of its transition to new energy, and it has enough funds to support the development of the ID. series for the time being, but if it tosses for a year, the sales volume is not as good as the new forces of car manufacturing that are halfway out, it will be a very bad situation.