Together with dealers, talk about SAIC-GM's "black five years"

Written by | Fiesta ST

Edit | Ya Lan

Last month, the United States GM released a news that made the car company that has been out of focus in China for a long time become the focus of attention in the industry again - the Americans announced that they plan to create a new independent luxury brand in China, the purpose of which is to import high-end luxury models from the United States into China, abandon the existing joint venture car companies in China, and operate in a "highly autonomous" way.

This shows at least two signals. First, at the moment when the joint venture share ratio policy is liberalized, GM may not be eager to seek to increase the share ratio in the joint venture car companies like BMW, but try to establish a new wholly-owned brand, which can avoid complicated negotiations and games with SAIC and grasp the initiative of future development in their own hands; second, Americans are not satisfied with GM's existing joint venture brands in China, and after operating in the Chinese market for 25 years, Chevrolet, Buick, Cadillac and other brands have not reached the expected brand height.

What SAIC-GM encountered in the Chinese market is an irrefutable "cliff-like" decline.

In 2017, SAIC-GM's annual sales reached 2.0002 million units, which was the first and only time that SAIC-GM's sales exceeded the 2 million vehicle mark, and it also became a "watershed". In the following four years, SAIC-GM's sales declined. For the full year of 2021, in addition to Cadillac's slight growth of 1.4%, Buick and Chevrolet's sales fell sharply by 98,000 units and 41,000 units, respectively. Chevrolet has less than 270,000 vehicles, which has fallen by nearly half even compared with 2019 (413,500 vehicles) and is only a third of the peak of 767,000 vehicles in 2014. In the "low, medium and high" collocation of Chevrolet, Buick and Cadillac, Cadillac, which was originally aimed at the BBA, can only rely on huge discounts to maintain sales, while Chevrolet and Buick are getting more and more difficult in the gap between independent brands and luxury brands, and the brand distinction between them has become ambiguous.

"Opened a new chapter in accelerating the strategic transformation of the future" and "won the unanimous recognition of the industry and consumers". Even so, SAIC-GM's official press release remained optimistic when it came up with a "report card." But everyone in the industry can see that SAIC-GM has a problem — and even without exaggeration, SAIC-GM's problem is obvious, like an old man who is seriously ill, everyone knows that ta is sick, but there is nothing they can do about it.

Ten years ago, GM emerged from the shadow of the 2008 subprime mortgage crisis, and after throwing away several famous brands and accepting a bailout from the U.S. government, the former giant returned to the throne of the world's largest car sales in 2011. In China, SAIC-GM has also gone through an era of rising sales: from 2011 to 2016, SAIC-GM sold 1.231 million units, 1.3927 million units, 1.5752 million units, 1.7602 million units, 1.752 million units and 1.887 million units, respectively.

In 2017, it became a watershed for SAIC-GM, and in the five years since, SAIC-GM has entered a significant recession.

What makes these five years of SAIC-GM so dark?

Through talks with a number of dealers who have worked with SAIC-GM for many years, we tried to peel back the cocoon and find the answer.

SAIC-GM's biggest problem: people

Just as the so-called "time is not as good as the location, the location is not as good as the people", in the eyes of this dealer's predecessor, saic-GM's biggest problem is in the "people".

In the era when SAIC-GM became the first car company in China's auto market, OEMs, regions, and dealers can be said to be one heart and one mind, and everyone thinks about how to sell SAIC-GM's cars better. Dealer seniors recalled that in the Era of Hu Maoyuan, they once went to Shanghai to participate in the training arranged by the main engine factory, and at the gate of the conference room, SAIC-GM hung a banner: "Welcome home." This made dealers, including him, feel hot. At that time, Buick was able to become very popular in the Chinese auto market, which was not unrelated to the unity of the distribution system.

However, after experiencing the peak, SAIC-GM's psychology from the top to the middle has changed. Judging by the areas that their dealers have more access to, regional managers have begun to set up cards everywhere in policy. Marketing expenses are often discounted because of some unrelated factors, and the distribution of models is more and more out of line with the actual market, "pressure library" has become a common thing, dealers are miserable. "In such a situation, dealers have also had a passive heart to cope, and since then SAIC-GM's sales have become worse and worse." In the city where the dealer's predecessor lived, a SAIC-GM 4S store was able to sell nearly 500 vehicles a month at its peak, and now, it is good to sell dozens of vehicles a month. In the view of this dealer's predecessor, such a problem is not only in a certain region, but also a common phenomenon nationwide.

The mentality "floating" is not only the regional middle layer, but also the upper level of SAIC-GM.

Hu Maoyuan, the founder of SAIC-GM, once said: "As a leader, when you have achievements, you must look out the window, and when you have shortcomings, you must look in the mirror." If Chinese do things as seriously as they do, China's economy will be better than it is now! Hu Maoyuan, a Shanghainese by worker background, has the best international vision and the most open mind among the leaders of state-owned car companies. He made full use of international resources to build SAIC into an automobile enterprise with the most complete system and the most complete industrial sector in China. From Chen Hong, Ding Lei, Ye Yongming to Wang Xiaoqiu, saic-GM's successive general managers have made great contributions to the success of SAIC-GM - when SAIC-GM started, sometimes Hu Maoyuan, vice president of SAIC Group, personally laid a solid foundation for the rudder; when the original SAIC-GM production, procurement and other links were in ruins, Chen Hong, who was known for engineering, created a perfect system; when SAIC-GM laid a good foundation and entered the rising period, Ding Lei, an all-rounder, took Shanghai GM on the fast track When the Shanghai GM system was stable, There were marketing veteran Ye Yongming and "product master" Wang Xiaoqiu who led SAIC-GM Torrent to bravely occupy the position of sales champion.

Since 2018, SAIC-GM is facing an unprecedented recession. Saic-GM executives still maintain the confidence of fans.

In November 2019, Wang Yongqing, general manager of SAIC-GM, publicly stated in an interview with the media that in the Chinese market, SAIC-GM will always be in the first camp. Shi Hong, deputy general manager of SAIC-GM, added: "We can't lose. ”

SAIC-GM really can't lose, but who can guarantee that it can't lose? Although the camel was still large, it was not impossible to starve to death. After all, from 2019, when SAIC-GM shouted "it is impossible to lose" to last year (2021), SAIC-GM's annual sales fell by nearly 10%.

Also on this visit, Wang Yongqing's request to Cadillac is to achieve double-digit growth in 2020. The reality is that in 2020 and 2021, Cadillac's two-year cumulative growth did not reach double digits. Feng Dan, director of cadillac's marketing department, said at the time: "... I didn't look at the numbers at all, because Cadillac never saw Volvo as a competitor, and Cadillac always looked at a stronger opponent in the luxury market. ”

However, two years later, Cadillac did not narrow the gap between himself and the BBA, but was firmly pressed down by the sudden Tesla.

Just in 2019, SAIC-GM executives also expressed doubts about electric vehicles and new forces. Wang Yongqing said at the time: "Electric vehicles cannot be profitable under the current circumstances, and Tesla's 200,000 public statements are not profitable." At that time, Shi Hong believed that the heat of the new car-making forces was decreasing.

Today, Tesla has achieved profitability for 10 consecutive quarters; in February 2022, Tesla's sales have been twice that of Cadillac, and the ideal monthly sales of China's new power brands have approached Cadillac.

I don't know how SAIC-GM feels about this.

Five years of product: a tragedy that began with the "three-cylinder strategy"

In fact, even if SAIC-GM knows what the problem is, it is still helpless. In the words of the dealer: SAIC-GM's ship is too big to turn around.

Since 2015, Wang Yongqing has bluntly said the crux of SAIC-GM in many media interviews. In 2015, Wang Yongqing told the outside world: "A few years ago, traditional cars accounted for 70%, and SUVs accounted for more than ten percent. And now it seems that by 2020, SUVs are likely to reach 30% share. So the market is changing, our strategy is changing, we are also adjusting, our product line, including the product structure, is adjusting. In 2016, he also said: "At present, the proportion of our traditional sedans is too high, and our SUVs are not enough for the full range, so our future three major brands of full-range SUV layout should be strengthened, and the plan has been formulated and will be introduced to the market according to the plan." ”

In that big bull market for SUVs, SAIC-GM suffered a big loss. Today, SAIC-GM has gone to great lengths to get SUVs, but with little success. The newly launched models do not go in volume, and the models that were once popular are not the same as in the past.

As one of the pioneers of small SUVs, Oncora almost no fight back in the face of the later "wolves", and now the annual sales of the Oncora GX and Ancora are less than 9,000 units, less than a month's sales of Honda X-RV; as the big seven-seat SUV mainly promoted by Buick, Onco Flag has also failed miserably in the competition with Highlander and Tuon, and the monthly sales are almost zero; and the Chevrolet Explorer and other models are also applauded, and the sales fluctuate sharply, with less than 2,000 units in February 2022.

In the past five years, most of the SUV models under SAIC-GM, whether it is GM Oncora, Oncovey, or Chevrolet Copach, have experienced a shortage of competitive models and good sales at first; then the increase in competitors, the highlighting of product shortcomings, and the decline in sales - Oncovi is deeply involved in a variety of quality disputes such as suspected shaft breaks, brake hazards, etc., and the driving experience brought by the dual-clutch transmission is too poor compared with the equivalent products, resulting in a continuous decline in sales; Oncola has also been complained about a variety of quality problems such as brake system quality defects In addition, the product replacement is backward, and it takes 7 years to replace, and at this time, in the face of the stronger product force of Honda Binzhi, XR-V, and many independent brand models, it is difficult to restore the glory of the past.

At the same time, SAIC-GM's once-glorious car market is now no longer glorious.

The Yinglang was once the most popular model of the Buick brand, and once held the position of sales champion in the residential car market for a long time. However, after switching to a three-cylinder engine, Yinglang's sales fell again and again. Although SAIC-GM insists on advertising that its three-cylinder engine uses a number of new technologies, it is not inferior to the four-cylinder engine in terms of reliability and smoothness. However, the existing concepts of consumers are difficult to change in a short period of time, and the three-cylinder Yinglang has been abandoned by the market.

Although SAIC-GM re-launched the Yinglang model model model model with a four-cylinder engine in 2020, Yinglang's sales have rebounded for a while, but Yinglang's product image and market position have still suffered damage that is difficult to eliminate in the short term, and monthly sales have fluctuated greatly - in February 2022, for example, Yinglang only sold 8603 vehicles per month, a sharp drop of 66.4% compared with the same period in 2021. In contrast, the competitors Volkswagen Langyi and Nissan Xuanyi still maintained the monthly sales of more than 30,000 vehicles.

From pushing the three-cylinder to relaunching the four-cylinder model to try to recover lost sales, SAIC-GM's "three-cylinder strategy" lost, a pity. Realistically speaking, the failure of SAIC-GM's "three-cylinder strategy" is not a technical error, but a more problem at the market and marketing levels.

SAIC-GM's mistake was that it did not accurately grasp the Chinese market and consumers. The relatively conservative attitude of Chinese consumers, as well as some media exaggerations, make Chinese consumers show a blind resistance to the three-cylinder engine. An engine that was originally very good was mislabeled and has been difficult to turn over since. In contrast, SAIC-GM's opponents, except for Ford, are mostly stationary in the field of three-cylinder engines and have chosen a wait-and-see attitude.

In the end, conservative competitors laughed at the market share that Yinglang had ceded, while the aggressive SAIC-GM could only swallow the bitter fruit.

Five Years of Marketing: Why did SAIC-GM make mistakes again and again?

If there is a three-cylinder engine, SAIC-GM still has reason to defend itself. Then in the matter of the suspension of the Buick Kaiyue, SAIC-GM can not escape the blame - this is a big trick.

In August 2016, SAIC-GM announced that Buick Kaiyue would cease production. At this time, Kaiyue is still a popular model that can maintain the monthly sales of 10,000 vehicles. In the eyes of dealers, SAIC-GM easily abandoned such a model, which is particularly arrogant and unrealistic.

SAIC-GM has said that the suspension of Kaiyue is conducive to the construction of the Buick brand. "When Buick reaches the level of one million vehicles per year, the Buick brand has to have a brand pattern of millions of vehicles." At that time, Bao Ye, director of the marketing department of SAIC-GM Buick, said so in an interview.

There is widespread speculation in the industry that Kaiyue's suspension of production is "making way" for the recovery of the Chevrolet brand. Immediately after, chevrolet Corvotz went public, largely demonstrating this.

Kaiyue made way for Kowartz, just as Sail changed from hanging a Buick standard to a Chevrolet label - Chevrolet's brand positioning was under Buick and Cadillac, in 2005, when Chevrolet entered the Chinese market, GM transferred Sail from Buick to Chevrolet, and the models imported into the Chinese market in the same period were mostly A00-class and A0-class cars such as Spark, Lechi and Lefeng.

At the time, such a strategy was understandable, and Chevrolet had achieved market success. With the change of consumer trends, Chevrolet's center of gravity has shifted, and models such as Cruze, Maribal and later the Explorer seem to be more in line with market demand, but due to the smaller and smaller differentiation with Buick products, Chevrolet and Buick have fallen into the quagmire of internal competition.

In order to build a better brand image, Buick not only discontinued Kaiyue, but also launched a high-end sub-brand Avenir, trying to achieve improvement at the brand level. But for consumers, Buick's product image has not been successfully improved by the discontinuation of Kaiyue, and Buick is still the brand with huge discounts and relying on cost performance to compete in the market.

Buick exchanged Kaiyue's annual sales contribution of 100,000 vehicles for a high-end brand image, but in the end it lost its wife and folded the army - despite Kaiyue's concessions, Chevrolet is still a dou that cannot be supported. After Kowarz once achieved monthly sales of about 20,000 vehicles around 2018, it has plummeted from 2019, with monthly sales from 5,000 to only 2,000 or so now. Buick Kaiyue chose to make a comeback after nearly two years of suspension of production, but still did not return to its former style, and only sold more than 3,000 vehicles in June 2018 in the first month of the comeback, which is also the peak of Kaiyue after the resumption of production. Now, Kaiyue's sales are close to complete zero.

The three-cylinder Yinglang and Corvus, the four-cylinder Cruze and Mai Ruibao have all suffered a tragic decline, confirming the dealer's words: the product problem is only the tip of the iceberg of the problem, and SAIC-GM's bigger problem lies in marketing and brand positioning.

Since 2017, SAIC-GM has exhausted all available means in order to stabilize sales. The general price reduction means of blood collapse have allowed Buick to stabilize sales and let Cadillac grow, but it has not saved the avalanche of Chevrolet terminal sales - third-party websites show that the minimum quotation of some models of Chevrolet brand dealers has been lower than that of independent brands, but it still has not changed the reality that Chevrolet sales have been cut off for three years. SAIC-GM tried to get Buick to "brand up", while Chevrolet took over the results of the entry market. In the end, it is Buick and Chevrolet products that always have a lot of overlap, resulting in internal competition and consumption.

At the same time, Chevrolet has also completely abandoned the entry market, which is quite regrettable. Although the market for A0-class and A00-class cars has the same door Baojun and Wuling to undertake, just imagine, if Baojun MINI EV is a new energy car with a Chevrolet logo, is it possible to have a better brand premium? Can SAIC-GM achieve better profits?

As for Buick, the "mid-to-high-end positioning" envisioned by SAIC-GM was eventually reduced to laughter under the pressure that Cadillac also had to reduce prices and promotions. Americans originally thought that Buick's middle-class positioning in the United States could be transferred to China, but the ultimate reality was that Buick had to lose more miserably in the U.S. market, so that Encore had to be produced in China and then sold back to the United States to meet the insignificant but difficult chicken rib demand in the United States.

From product layout to brand positioning, SAIC-GM's strategic measures in the past five years have been improper, not only losing market share, but also causing the brand image to decline sharply. In the recollection of dealers, Buick used to be able to sell models such as Regal and Boulevard to more than 300,000 yuan, and it can also achieve good sales performance, but now, Buick can only rely on relatively low-cost models to maintain its share, which is stifling.

Decade of technology: On the game of "New Four Modernizations", how does SAIC-GM play "starting to listen" as a fair match?

Compared with the product and marketing in the past five years, SAIC-GM's technical mistakes can be traced back to a much older history.

In 2008, the concept of "green moving the future" was first proposed, and Ding Lei, then general manager of SAIC-GM, was full of confidence in it. Nowadays, Ding Lei has already turned around to build his own new energy brand Hezhong. SAIC-GM is still stagnant in the field of new energy. Perhaps as mentioned earlier, the current SAIC-GM executives have never dispelled the doubts about whether new energy models can be profitable.

This point also happens to be something that dealers do not understand.

The plug-in hybrid Chevrolet Volt Vollanda, once the best-selling new energy vehicle in the U.S. market, was almost never officially introduced in the Chinese market. It cannot be found in most 4S stores, and it seems to exist only as a mascot at various auto shows to show the outside world that GM has the ability to build good new energy vehicles.

As early as 2010, it appeared at the Shanghai World Expo, and a full 12 years later, SAIC-GM was far ahead of its competitors, but finally lost badly in the field of new energy. This is definitely not a technical reason, but purely a man-made disaster. According to dealers, the Chevrolet brand did not really strive to promote the sales of new energy models in the early years. When everyone thinks that selling good fuel models is the most important task, it becomes a natural thing for new energy to be left behind.

Until 2019, when the surging news asked the senior management of SAIC-GM whether it was difficult for traditional car companies to complete the real thinking transformation, Shi Hong, deputy general manager of SAIC-GM, still answered with questions about new energy. His answer at that time summed up three levels: electric vehicles are difficult to make a profit, the consumer market has no demand for electric vehicles, and charging equipment infrastructure needs time.

You know, it's already 2019! Just one year later, in 2020, new energy vehicles have ushered in a wave of crazy rise from the market to the stock price... The conservative concept of SAIC-GM's top management is so conservative that it is difficult not to worry about the future of SAIC-GM.

This also reflects from another level that SAIC-GM is now a car company that will only eat the old money. Although SAIC-GM is still full of confidence in the Pan Asia Center, the GM that once led in technology has long ceased to exist.

In the past, GM was the undisputed technological benchmark among global car companies. In 1989, GM's Opel set a wind resistance coefficient of 0.26, lower than the Lexus LS and Porsche 911, which were talked about at the time; in 1994, GM's Ozzmobil Aurora was the world's strongest car at that time, only a year later, the Mercedes-Benz W210 E-Class could be compared; in 2002, Delphi, which was still affiliated with GM, developed an MRC active electromagnetic induction suspension system, in addition to Chevrolet Corvette and Cadillac. It was even adopted by the Ferrari 599GTB.

Today, the "new four modernizations" have swept the automotive industry. As early as 2000, GM launched the fuel cell concept car GM Precept; in the late 90s, OnStar Began to take shape, with satellite navigation and digital radio functions, when the owner forgot to take out the car key out of the car, the owner of the car contact OnStar can be used to help the owner open the car door remotely through the mobile phone; in 2007, GM has developed a reliable unmanned autonomous vehicle in automotive technology, which can automatically complete the roadside parking action...

But now, when it comes to universal "unique technology", the vast majority of people may be blank. The Americans sold Opel to the French PSA, Delphi bankruptcy split off Aptiv, in fuel cells, autonomous driving and other fields, GM has long been no longer the industry leader. In the Chinese market, whether electrified or intelligent, SAIC-GM has also clearly lagged behind the times - a year ago, SAIC-GM announced at the "2021 Science and Technology Experience Day" that it will increase investment, and it is expected that by 2025, the planned investment will exceed 50 billion yuan to accelerate the transformation of electrification and intelligent networking technology.

After several tosses, dealers only want to ask SAIC-GM executives: Why did you go earlier?

In the eyes of dealers, SAIC-GM's distribution network has become seriously ill. In such a situation, even if SAIC-GM has new technologies and new products, it is still difficult to revive the glory of that year. What's more, restoring consumer confidence in the brand is not something that can be done with one or two new cars.

Nowadays, Tesla has grown into a leader in the automotive market, and Weilai, Xiaopeng and Ideal, which were once considered by SAIC-GM to be "declining in popularity", have also crossed the milestone of listing financing and begun to become an important force in Chinese auto brands, and SAIC-GM, once the leader, has become a catch-up. SAIC-GM missed at least five years of critical periods of development, and to catch up again, SAIC-GM may need more than five years...

【Conclusion】

How do you continue to write the story of SAIC-GM?

The question marks are hard to answer.