The challenge of foreign car companies in the Chinese market is becoming more and more urgent.
This week, analysts at Bank of America, the nation's second-largest bank, said Detroit's three major automakers, GM, Ford and Stellantis, should abandon the highly competitive Chinese market "as soon as possible" and instead focus on the domestic market.
The data shows that the share of Ford and Stellantis in the Chinese market is close to negligible. Among them, from January to April this year, Ford (Ford and Lincoln brands) delivered only 66,000 vehicles in the Chinese market (excluding import and export), with a share of less than 1%;
Deliveries of several Stellantis brands were as low as 21,200 vehicles. And compared to the two peers who have been marginalized, GM is still struggling.
GM's market share in China plummeted from around 15 percent in 2015 to 8.6 percent last year, the first time since 2003 that GM's market share in China plummeted below 9 percent, according to the data. Relevant data show that GM's revenue has also declined year by year, falling by 78.5% since its peak in 2014.
From January to April this year, excluding SAIC-GM-Wuling, the delivery volume of GM's three main brands (Buick, Chevrolet, and Cadillac) in the Chinese market was 187,800, a year-on-year decline of 22.87%.
In addition, the cumulative sales from January to April were only 161,200 units, a year-on-year decline of 39.40%; This means that once the short-term promotion effect of terminal price reduction and destocking ends, the subsequent market sales pressure will continue to amplify.
In fact, the judgment of the above analysts is not groundless.
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Mary Barra, CEO of General Motors, has been aggressively exiting unprofitable or underperforming markets for the past decade, "The company's philosophy has always been that if you are not a leader in a region [market] and you don't see an opportunity to be a leader, then you shouldn't do business there." ”
However, for General Motors, at present, the Chinese and American markets are the only two major sources of sales left; In Europe, GM has been trying to re-enter the market with electrified models in recent years after exiting in 2017, but with little success in the short term.
Previously, Marie Barra also publicly admitted, "We are well aware that the market has changed and the landscape has changed as the capabilities of local Chinese automakers continue to grow." ”
On May 12 last year, SAIC-GM made a personnel adjustment. Due to work needs, Wang Yongqing, the former general manager of SAIC-GM, was transferred to the deputy chief economist of SAIC, and Zhuang Jingxiong, the former deputy general manager of SAIC-GM, took over as the general manager of SAIC-GM.
After taking office, Zhuang Jingxiong publicly said, "We must speed up on the new track, accelerate on new energy, and further accelerate on software and intelligence." We need to be faster in our response to the market. ”
Subsequently, on November 8 last year, SAIC-GM announced the establishment of a software and digitalization center, which adjusted the original software R&D team of Pan Asia to a new organizational structure. According to the plan, SAIC-GM will set up a team of nearly 1,000 people to provide services from the cloud to the vehicle end through the "atomic" capabilities of the cloud pipe end, and upgrade the user experience based on OTA upgrades.
"Profitable growth in the electric vehicle business; Provide strong profits and cash flow; Refocusing and restarting the Cruise autonomous driving business "is also a strategic priority for the company in 2024, but it also needs to be adjusted accordingly.
Earlier this year, GM abruptly announced that it would make a major overhaul to its annual bonus program, with progress in electric vehicles, software and services, and autonomous driving being measured as one of the weights.
According to people familiar with the matter, 60 percent of the employee bonus will be based on GM's operating income and free cash flow performance, and 40 percent will be based on the achievement of goals in the areas of electric vehicles, software and services, and autonomous driving businesses.
This means that the performance of the intelligent and electrified market is, to a certain extent, a decisive factor in the stability of personnel. Once the losses continue, layoffs or even exit the market are options.
According to public data, for the whole year of 2023, GM's revenue will reach $171.8 billion, a year-on-year increase of 9.6%; Net income edged up 1.9% year-on-year to $10.1 billion, but adjusted EBIT fell 14.6% year-on-year to $12.4 billion.
In addition, GM sold about 6.186 million vehicles worldwide, a year-on-year increase of 4.2%, and performed particularly well in the North American market, with an increase of 14%; In the Chinese market, retail sales were about 2.1 million units (including Shangtong-Wuling), down 8.9% year-on-year.
Meanwhile, in terms of financial figures, GM reported a global pre-tax profit of $12.3 billion in 2023, but its joint ventures in China lost $200 million. Such a huge contrast is actually putting tremendous pressure on GM's global executives.
In the Chinese market, 2023 can be said to be a key year for the launch of GM's pure electric models. Due to the poor realization of Cadillac Ruige, Buick has become a new position for SAIC-GM's electrification transformation, and two models based on the Autonen platform (E5 and E4) have been launched one after another.
At present, SAIC-GM Autoneng Gigafactory and SAIC-GM Wuhan Autoneng Gigafactory have been put into operation, and SAIC-GM Dongyue Autoneng Gigafactory has started construction in July 2023 and is scheduled to be officially put into mass production in the first half of 2025.
Starting this year, SAIC-GM will also launch 8 new energy vehicle models, including the Autoneng pure electric model and a new generation of PHEV intelligent plug-in hybrid models, among which the Buick GL8 PHEV model is even more highly anticipated.
However, judging from the market performance from January to April this year, the delivery volume of SAIC-GM's new energy models (excluding Shangtong Wuling) was only 29,600, although it achieved a high growth of 122.56% year-on-year, but compared with its Chinese counterparts, there is still a huge gap. Obviously, SAIC-GM's transformation performance is still less than expected.
The pressure from China's local car companies is still being released.
"The new energy vehicle industry has entered the knockout stage, and in the next two years, the industry will start a big battle in scale, cost and technology." This is a remark made by BYD Chairman Wang Chuanfu at the earnings conference at the beginning of this year.
At the same time, he boldly predicts that in the next three to five years, the market share of foreign brands in China will fall to 10%. According to the data, in 2023, the sales volume of independent brands in the Chinese market will account for more than 50%, snatching market dominance from joint venture brands.
Similarly, Tesla's chief executive, Elon Musk, said earlier this year that China's electric car companies are so powerful that without tariffs or trade barriers, Chinese automakers are likely to "knock out" the vast majority of their competitors around the world.
In fact, unlike the new energy policy dividends a few years ago, with the blessing of intelligence, model upgrades and brand improvement, the market competitiveness of Chinese car companies has been further enhanced.
"The EV market in China is so fierce that Volkswagen can't keep up," said Volkswagen Group CEO Oliver Blume, who said we want to maintain a market share of more than 10 percent. ”
Especially under the new situation of Chinese counterparts' crazy "volume" technology and "volume" configuration, the joint venture brand models that used to dominate the top few of the list of various market segments in the Chinese market have no competitiveness at all.
According to the monitoring data of the Gaogong Intelligent Vehicle Research Institute, in 2023, 6,353,200 passenger cars in the Chinese market (excluding import and export) will be equipped with 1.0 intelligent cockpits (L2 + digital networked cockpit + OTA), of which independent brands will account for more than 50%.
Among them, the average delivery price of new cars equipped with 1.0 intelligent cabin drivers of independent brands is 241,200 yuan, which is far lower than the 308,300 yuan of foreign brands (including joint ventures). In the 2.0 intelligent cockpit (NOA + AI cockpit) part, independent brands almost monopolize the market.
At present, several joint venture brands are also trying to localize technical cooperation, but the progress is obviously slow. Volkswagen Group executives have also admitted that resonating with the "China speed" at the same frequency is the goal that the company strives to achieve. But change never happens overnight.
According to the plan, from 2026 onwards, Volkswagen will begin to introduce pure electric models developed specifically for the Chinese domestic market. As an important local intelligent R&D center in the Chinese market, CARIAD China has just undergone a round of high-level adjustment at the beginning of this year.
For example, in terms of actual model configuration, when joint venture brands (such as Toyota and Volkswagen) have just begun to launch the Qualcomm 8155 cockpit platform on a large scale this year, Chinese counterparts have begun to sprint to the Qualcomm 8295 next-generation cockpit platform and a new round of hardware competition cycle of 8775 cockpit integration.
In addition, in the high-end NOA intelligent driving part, in the first quarter of this year, 249,500 units were delivered as standard equipment in the market, a year-on-year increase of 199.88%, and the carrying rate exceeded 5% for the first time, continuing to maintain a high growth trend. However, at the same time, except for Tesla (optional), the rest of the foreign-funded car companies are still in the stage of development, verification and even looking for suppliers.
In the Chinese market, Qualcomm 8155/8295+ NVIDIA Orin is the standard configuration of mainstream flagship smart cars, but looking at it, almost no foreign brand models have similar configurations, even traditional first-line luxury brands such as BBA.
Just like the classic cruel saying, "When the times abandon you, you don't even say hello". For the once glorious foreign brands, in a rapidly changing Chinese market, the gap with their opponents is actually only two words: "speed".
Speed is about technology adoption, decision-making, and localization decentralization.