On November 17, the 21st Guangzhou International Auto Show officially kicked off. SAIC GM brought a total of 48 cars from its Cadillac, Buick and Chevrolet brands to the show. During the auto show, SAIC GM held a sharing session. Here is the record of the interview:
Interviewer: How are the sales of SAIC GM’s new energy vehicles? Are they meeting expectations? What will be the sales model of SAIC GM’s new energy vehicles in the future?
Zhuang Jingxiong: From January to October, SAIC GM sold a total of 66237 new energy vehicles. This year, our annual sales target for new energy vehicles is more than 100,000 units. Recently, Buick has made two moves. The first one is the launch of the Buick Weilue 6 430km version, priced at 99,800 yuan. As a pure electric vehicle below 100,000 yuan, this car is selling very well now, and it should still be in short supply before the end of the year.
In addition, it is the Buick E5 Pioneer version, priced at 169,900 yuan. Ever since this car model was launched, market feedback has been very good. Therefore, these two cars will further boost our total sales of new energy vehicles in the near future.
At tomorrow’s Guangzhou Auto Show, we will announce the Cadillac LYRIQ Lyriq rear-drive standard range luxury version, with the price to be announced tomorrow, which should still be quite competitive. I believe that the introduction of these models will further enhance our overall sales of new energy vehicles. Chevrolet’s pure electric and plug-in hybrid products will also be launched next year to further meet market demand.
Our primary task now is still to rely on the Altener Intelligent Electric Platform to launch more safe and reliable high-quality products, open up the market, satisfy our customers’ needs, and further increase our market share. This is of paramount importance. Afterward, we will improve our efficiency through corresponding measures and reduce our costs. Because for any company, if you do not have a long-term profitable model, you will certainly lack vitality, and this is also irresponsible to consumers. In the long run, our company needs to maintain its hematopoietic function and further develop our new products, serving our customers well.
Lu Yi: Sustainable development is very important, and this is indeed a severe challenge faced by the current old and new tracks. Our goal this year is to keep the new energy flag flying high with Buick, and next year we aim to do the same with Cadillac and Chevrolet, striving for all three brands to keep this flag flying high together.
Just now we talked about the issue of the dealer network. The vehicle sales of SAIC GM’s three major brands are mainly through the dealer network, and it will remain so in the future. But we will continue to have a diversified network layout. Why so? Considering the current operational costs of the site and rent, simply pursuing a 4S store is no longer suitable for first-tier and second-tier cities. In the future, we will see a trend of separation of showrooms, delivery areas, and after-sale service areas. We call it diversification.Secondly, we will also establish some direct-sales stores, mainly for direct connection with customers, but still serving our entire dealer network. So, our sales network comprises primarily of dealers, accounting for 90%, and a few direct-sales stores, even supermarkets. In the future, we plan to focus on creating 4S stores and showrooms for new energy vehicles.
Reporter: How does SAIC GM plan to quickly seize the PHEV plug-in hybrid market? How will the SAIC GM’s Software and Digitalization Center build advanced intelligent networking technology with a more open and inclusive mindset?
Zhuang Jingxiong: We have always had a reserve of PHEV plug-in hybrid technology. However, we used to lean more towards pure electric vehicles and we are aware that the PHEV market is growing very rapidly now. In future product planning, we’ll fully consider including plug-in hybrids in our product spectrum.
By the second half of next year, the brand-new generation of PHEV smart electric plug-in hybrid technology independently developed by SAIC GM and Pan-Asia Automotive Technology Center is expected to be launched on our Buick GL8 model. Subsequently, we’ll fully consider implementing plug-in hybrid technology on more of our products.
Wang Chendong: SAIC GM seriously values the creation of an intelligent networking ecosystem. Actually, all of this can’t be separated from an “ecosystem social circle”, which everyone in the industry needs to work on together.
When mentioning ecosystems, most people think of the internet immediately, some internet applications, apps, these are quite basic. In fact, much more is about the ecosystem of vehicles and mobile phones combination nowadays. In the future, we’ll cooperate with more software developers. Because many powerful software and functionalities in overseas markets, when brought into China, to interface with some of our services encounter issues, many functionalities’ development necessarily has to be done by us.
Concerning the middleware, software, and application layers, we in fact have a lot of cooperating partners. We work together. Furthermore, these partners can also bring us a lot of new forces, some advanced concepts from independent brands. Many things can’t be done by closing the door and making cars ourselves.
So, this is also a task we plan to accomplish next year. Under the premise that our shareholder, General Motors North America, allows SAIC GM to make their “social circle” in China, how can we conduct technology research and development faster? We’ll combine the abilities of our own software team and the assistance of external social circles to accomplish this.
Reporter: In terms of technology research and development, how much involvement does SAIC GM currently have in independent research and development? Among the current new energy users, how many were originally SAIC GM’s fuel vehicle users, how many new customers are there? In the new energy era, where is the irreplaceable role of joint-venture brands?
Wang Chendong: Over the past six months, General Motors has realized that SAIC GM is facing a very big challenge in the intelligent transformation. Fortunately, we have the whole Pan-Asia system, whose entire software team and system is in very good condition now. We have so many platforms, from high-end vehicles to low-end vehicles, all types of electronic architectures for vehicles, we’ve always followed the globe to realize better sharing. Of course, sharing has its advantages. After all, compared with the new forces, they’re a single large product, but for us, there are simply too many series of different brands and models, such that if we do not rely on a global team to conduct research and development together, the input would be massive.
However, presently from a software perspective, we’re exploring better ways to separate hardware and software. The challenge is how to effectively fuse the software technology system that we currently have with the cloud-based system SAIC GM has been developing over the past few years. Simultaneously, we have a strong assurance from General Motors in North America. We’re going to peel back the layers just like peeling a bamboo shoot. The APP layer, the application layer, and the UI layer must all be developed in-house by the three main brands. From there, it extends to the electronic architecture and the middle services. These aspects require significant effort, relying on our team’s understanding of Chinese users to reverse-engineer them.
The upcoming tasks are indeed hefty; just like building a house, it’s not a matter of patchwork, but rather shifting the very structure. Yet, we cannot simply reallocate too many resources to structure and ask you to wait. After all, the market will not wait.
Both aspects require the combined effort of our team. Much of the user experience, the quick and small updates, must be rolled out quickly. It is now up to our systematized team, which will expand to nearly a thousand members, to offer services from cloud to car, and upgrade our vehicles via our “atomic” cloud portal. Come next year, we will see new functionalities across all three brands introduced via Over-The-Air (OTA) updates.
Lu Yi: Regarding smart mobility, SAIC GM adheres to the “shared benefits of oil and electric,” setting us apart from other automakers. Statistics show that over 40% of our new-energy vehicle users are pre-existing customers. Many Cadillac, Buick, and Chevrolet owners have switched to vehicles like Buick E5 and E4, and we’ve received positive feedback regarding the improved experience.
Secondly, the ALTEN Energy Intelligent Platform has indeed earned high praise for its safety and reliability. Furthermore, the platform’s accurate real-world range receives equal acclaim from car owners. Our batteries consistently achieve more than 80% of the stated range, significantly leading in the industry.
Overall, our feedback is promising; our main challenge is attracting more youthful drivers. We plan to achieve this by leveraging innovative media marketing to further enhance the reputation of our three main brand’s smart electric products.
Zhuang Jingxiong: Regarding joint ventures, here’s my take. Firstly, as a Chinese individual, it is our hope that Chinese brands can quickly ascend and find their place among the world’s top automotive brands. Secondly, as a business operator, I also aspire to generate social value effectively and create shareholder value. These two points are not mutually exclusive.
As for joint ventures, their development used to be linear, but it has become cyclical. Undeniably, all joint ventures, including ours, have encountered various operating difficulties recently. Overall, market shares have decreased. Why? Because both homegrown brands and new forces have surged, driven by new energy vehicle developments—a crucial step for China’s transition from an automobile affluent country to an automobile power.Now, it’s safe to say the world is viewing China’s automotive industry differently, especially after three years of development post-pandemic. One could even argue that China now possesses the world’s most vigorous and dynamic car market. Amid such frenzy and vitality, the question is whether our joint venture companies still hold any advantage.
My response would be affirmative. Our joint ventures connect with domestic and foreign influences. The latter, being world-leading automotive enterprises, remain unsurpassed. Believing homegrown brands to have completely overtaken these international giants would be somewhat premature. Such a day will come, but not at the present moment.
Speaking of JV corporations, we have two types of shareholders. On one hand, domestic shareholders represent China’s pinnacle of automotive research and development. On the other hand, foreign shareholders maintain a leading position globally. The challenge lies in combining these strengths within our joint ventures, allowing them to take root in China, and further serve the Chinese market. That, indeed, would be our advantage.
Crafting cars in isolation is a flawed approach. We should embrace an open mindset, accepting contemporary technology worldwide. Over the past 40 years, China’s automotive industry has developed progressively: starting with the adaptation of advanced concepts through replication, then modifying to meet Chinese requirements, and eventually developing fully novel products designed to satisfy the Chinese market’s needs.
Currently, China holds a suite of independent research and development capabilities throughout the process. Particularly in electric vehicle (EV) industry, China is at the forefront. Its infancy was built on our existing powerful industrial infrastructure, which furnished the genesis that enabled Chinese EV’s to stand out.
For SAIC GM, there are still a few objectives that deserve attention.
First, we need a holistic deployment of both software and hardware. It’s becoming increasingly apparent that user-friendly software should be developed domestically, owing to unique user habits and ecological differences between China and the U.S.
Secondly, safety and reliability, especially for new energy vehicles, are of paramount importance.
Thirdly, we should adopt a customer-first approach and continually improve our services. In the past, the selling of a car marked the end of service. Today, it’s the beginning.
In essence, China’s car market needs an abundance of blooms and a chorus of voices. I firmly believe that the market will eventually find equilibrium. Regardless of whether they’re joint ventures, homegrown brands, or new forces, time will reveal how these entities coexist in the Chinese market and, furthermore, flourish in the global automotive sector.Interviewer: How do you balance market share and company profitability? Do you have clear goals for next year? How do you balance the market share and profitability of traditional fuel vehicles and new energy vehicles, especially for Cadillac brand, how do you create a unified brand image to avoid internal consumption between fuel vehicles and electric vehicles?
Mr. Gu once said “The second half of Cadillac is about to start.” When does this “second half” start? What are the plans for Cadillac’s future electrification process?
Zhuang Jingxiong：Indeed, our market share has declined this year, and profitability is not as good as last year. According to our plans for next year, our market share will improve. However, due to more intense market competition, profitability may decline further. But in the long run, we emphasize that the company should have its own hematopoiesis function to find a balance point.
Gu YeBin: On May 28th this year, Cadillac launched three new vehicles at the same time in Changsha, marking the beginning of the brand’s “Vanguard Renewal” campaign. At that time, we proposed “Oil and Electricity Co-intelligence,” which was a significant success. The product strength of the three new cars was unanimously recognized by customers, distributors, and the industry. Meanwhile, these three vehicles also drove Cadillac’s performance in this year’s market. Despite the highly competitive market, Cadillac’s overall market share has remained stable this year. In October, our star model CT5 sold over 10,000 units.
The first half of the “Vanguard Renewal” has laid a solid foundation for the second half of the brand’s “Vanguard Renewal,” which will be unveiled tomorrow.
Tomorrow, on the stage of the Guangzhou Auto Show, Cadillac will launch a new SAIC GM Lyriq, Cadillac IQ rear-drive standard range luxury version. The theme of the second half of Cadillac is “IQ pure electric.” Based on the Altium Electric Platform, Cadillac’s IQ pure electric products have significant advantages, namely “strong in the inside, stunning in the outside.”
In summary, the second half of Cadillac is in IQ pure electric, and the Altium Electric Platform is our core strength. The four words are Fast, Accurate, Stable, and Resolute. “Fast” refers to our support for fast charging throughout the life cycle, which is a significant advantage because charging and refueling are crucial for electric vehicle users. We have also announced our cooperation with Tesla in recharging, which helps customers to recharge faster.
The second “accurate” means the cruising range is definitely not overstated. Since the delivery of Lyriq last October, customers have given an interesting feedback saying that Lyriq is the “reverse king of endurance”, which means that the displayed mileage of Lyriq is very accurate, and if your driving conditions are good, the displayed endurance mileage can increase.
The third one is “stable”. It has several aspects: One is the very good feedback from customers since delivery last year, which is that the car’s handling is excellent. From fuel vehicles to electric vehicles, all customers feel that Cadillac’s handling is top-notch. We also have leading safety in the industry with the Altium Electric Platform. In addition, in extreme environments, the Altium batteries are also very stable.The last one is the “firmness”. We are willing to spend on vehicle configuration and product material selection, which is very strict.
In addition, since Lyriq was launched a year ago, the local digital software team of SAIC GM and the North American team have made a lot of improvements together in intelligentization, connectivity, customer experience, and customer scenarios. Numerous OTA upgrades have been carried out, especially for some of the initial user pain points, which have now resulted in a significant increase in Lyriq’s recommendation rate.
Tomorrow (November 17th), we will have more news to share with you. Please also look forward to the “second half” and the “pioneer renewal” of SAIC GM’s Cadillac.
Journalist: The three-year action plan for SAIC’s transformation is actually nearing its time node. Everyone has great expectations for how joint ventures are now seizing the initiative in the new energy market, including the hybrid market.
What will be the most important action in terms of product strength and brand building in the future? Additionally, during the expo, general motors china showcased some very classic american models of Chevrolet, which generated a huge response. Where will the further individualistic development of the Chevrolet brand be reflected?
Chuang Jingxiong: Regarding the three-year action plan of Shanghai Automobile Group, at the level of SAIC GM, we have already laid out our goals and planned until 2026. Pure electric or plug-in technology will be applied in all subsequent models. Although the layout is complete, we still need to speed up and implement quickly. In addition to pure electric products, PHEV plug-in hybrid products will also be launched next year. The year after next, we will further launch more plug-in and pure electric products.
Lu Yi: Let me add something about marketing. First, the brand needs to be renewed because times have changed, and so have consumers. Second, we need to build a new media marketing matrix, and pay more attention to the consumer experience. Feedback from customer experiences, especially VOC (Voice of the Customer), will directly feed back into product definitions. For example, customer feedback on intelligent experiences will directly reflect on product cockpit and intelligent driving upgrades and adjustments.
The focus of the current smart electricity era is firstly “electricity”, which means providing consumers with great driving experiences on electrification and PHEV (mainly electric driving for the first 100 kilometers, EREV is also the same) including the true cruising range, and battery safety which is the focus for consumers, and also the advantage of SAIC GM. The second is on the experience of “intelligence”, mainly regarding the experience of intelligent cockpit and intelligent driving, making the cockpit smarter and the intelligent driving more suitable for the road conditions in China to achieve intelligence in cities, highways, and parking.
Zhou Peng: For the Chevrolet brand, there will be more pressure this year. In the face of the strong rise of independent brands and the transformation of new tracks, Chevrolet is facing unprecedented challenges and difficulties. At present, the most important thing for Chevrolet is to break the situation.Chevrolet, with its century-long history, is a global auto brand. However, telling its story and conveying its depth in China, along with effective product positioning, presents a great challenge. At the Expo, General Motors, with its Dao Lang algorithm, introduced some of Chevrolet’s high-end SUV models, causing a stir and garnering great enthusiasm from Chinese consumers. It also indicated the future path of Chevrolet’s development in China: effectively narrating the history and survival strategy of such an iconic American brand in the Chinese market.
The future direction of development comes down to two aspects: SUV-ing and Electrification.
SUV-ing. Chevrolet is the pioneer of SUVs, with a comprehensive product line in North America, ranging from compact, to mid-size, to large size, to full-size, to pick-up trucks. Each has left a significant imprint in the history of the automobile industry. Friends in the automotive industry know the real Chevrolet as the quintessential and pulsating American paradigm of exploration, strength, and reliability, encapsulated in its SUVs. Our statistics show that Chevrolet’s SUVs have 25.4 million customers around the world, evidencing their global appeal.
In the future, we will introduce our SUV product line based on the extensive R&D and manufacturing experience of General Motors’ Chevrolet in North America. As revealed on social media since August this year, we have gradually unveiled the new vehicle announcements from the Ministry of Industry and Information Technology. You can see that Chevrolet’s SUV products covering large, medium and compact models will be launched in the first half of next year. Future strategies not only involve further enhancing Chevrolet’s SUV product line, but also promoting and establishing Chevrolet’s brand repositioning in China through a range of high-performance, multi-functional SUV experience platforms.
Moreover, Chevrolet’s development in China also centers on electrification. As mentioned earlier, General Motors possesses substantial technology reserves in electrification and new energy technologies. In the 1990s, Chevrolet was the first to introduce new energy products in the North American market and continues to roll out EV products. Equipped with an ample technology reserve, Chevrolet will accelerate its strategic layout in the domestic market for electric new energy.
As General Zhuang also revealed, in the first half of next year Chevrolet will introduce its first electric model based on General Motors’ leading Altium electric platform. Chevrolet will also launch the Trailblazer PHEV model, utilizing SAIC General Motors’ PHEV intelligent electric plug-in hybrid technology. Moreover, we will introduce HEV strong hybrid energy-saving technology products. Thus, several new models of Chevrolet will be launched next year, collaboratively propelling Chevrolet’s transition to electrification and enhancing development quality.
To jump higher, one must first crouch down. To punch steady and hard, one must first pull back. This year has been a period of internal cultivation for the Chevrolet brand as we work towards product layout, channel rectification, and technological route planning. Next year will mark Chevrolet’s breakthrough phase.Interviewer: Today, we saw the brand new management lineup of SAIC GM for the first time, which surely signifies SAIC GM’s determination for change. Does this mean the “second half” of SAIC GM’s game has already started? What is the symbolic sign of this new beginning? I assume it isn’t merely the launch of a new car model, but rather a systemic capacity reformation.
Further, how exactly is there to cut costs and promote efficiency within the “second half”? Second question: When was the SAIC GM’s software and digitalization center established? Is it within the Pan-Asia system or relatively independent? Also, it was mentioned that a large opening up to North America is imminent, could there be further elaboration? Will we also cooperate with SAIC’s software center?
Zhuang Jinxiong: To be precise, it’s not simply about the “second half” for SAIC GM, but more appropriately, the transformational development of SAIC GM. Such a change has already begun, with the recent symbol being the official establishment of SAIC GM’s software and digitalization center. Additionally, this May, we established the SAIC GM Power Technology Co., Ltd. (Shanghai). It’s evident that both of these organizational changes surround the two new transformational tracks of electric and intelligent network integration with a specialization in their promotion and development.
Thus, the transformation and high-quality development are well underway. As we go forward, the layout for our development of new energy, which includes pure electricity and the technology route for plug-ins, as well as the corresponding product release scheme, have been completed. Not only will we have the Autonova’s pure electric platform but we’ll also have the PHEV’s smart electric hybrid technology route. All our products under the three major brands will have technological coverage in electric and electrified aspects.
In terms of transformation towards intelligent networking, after the establishment of the SAIC GM’s software and digitalization center, we will maintain a closer communication with North America, launching more intelligent networking technologies and products in China, including smart driving and intelligent cabins, achieving the goal of “In China, For China”. Only software developed by China will truly address the needs of Chinese consumers. Therefore, our road to transformation has begun, and the next step is to put it into practice swiftly.
Wang Chendong: In fact, in August, the company had already decided to establish the software and digitalization center. The backdrop to this is our collective awareness of the stringent market competition, urging us to quicken our pace. Over the past three months, we’ve been recalibrating our organizational structure, which also involved adjusting the software development team from Pan-Asia to the new structure of SAIC GM, hence uniting all previous departments from the vehicle end to the could end.
Moreover, we’ve come to the realization that technology does not equate to the product, nor does it equate to user experience. Since consumers do not delve deep into the efficiencies of specific technologies but focus on the driving experience once they own the vehicle. If they find it enjoyable and comfortable, that is their necessity. Therefore, we should not stress the strength of our technology or the deep-rooted knowledge but how the technology can be transformed into a real experience and service for the users. For this reason, our discussions with General Manager Lu’s team are frequent, we gather information from the user-end, from the market, and we also penetrate into the market ourselves, visiting dealerships and users to truly comprehend their needs.We are also in discussions with North America. There is consensus that we need a dedicated team and resources tailored for Chinese market requirements. Concurrently, we have frequent exchanges with the various departments and sectors of our parent company, SAIC Motor Corporation, who have abundant valuable experiences. We previously mentioned the ecosystem; SAIC’s system is also one of shared benefits where advanced resources can be shared.
Journalist: I would like delve deeper into possible changes at an organisational level. Apart from the Software and Digital Centre, are there changes in the organisational setup? For instance, one of our American counterparts combined design and engineering, thus eliminating friction or ‘overlapping’ within the departments. Will there be similar adjustments or integrations within SAIC GM or with our North American affiliates? Regarding the price war judgement of 2024, is the price war coming to an end? Is there a timeline or an expectation for when this war will be over?
Even SAIC GM, with their strong background resources, is drawn into the pricing war, with the Buick brand spearheading the ‘overturning of tables’, and others following suit. Our focus seems to have shifted to quality-performance ratio, but that’s not where our brand’s strength lies. What’s the way forward for us amid this conflict?
Zhuang Jingxiong: The market is tumultuous and the timeline for the price war’s cessation is dictated by the market conditions. With many players in the market, there’s bound to be disruptions. For the price war at hand, we keep stressing that it’s not a price war, but a value war. While cost-performance is important, what’s even more critical is transforming and rejuvenating our brand, improving product quality and service experience, and conveying our brand value. This is a long-term process.
Regarding the matter of pace, as a joint venture, some decisions might involve mutual shareholders. This occasionally results in a lengthy decision-making process. However, given current market competition, we’re shortening our decision-making process for quick decisions and implementations. For instance, the newly established SAIC GM Software and Digital Centre aims to accomplish more in China, enhancing organisational operational efficiency and software development and problem-solving efficacy.
Wang Chendong: The SAIC GM Software and Digital Centre has already integrated digital design and user experience. From a holistic user experience perspective, human-computer interaction tasks are compiled and executed together.
Yao Fei: Over the past 25 years, Buick has grown rapidly in the Chinese market, but its branding is predominantly associated with traditional combustion vehicles. That’s why, as we transition into the new energy vehicle sector, we hope to attract market attention through aggressive pricing. However, a price war isn’t the ultimate goal for any brand. For a brand, core objectives are to enhance customers’ perception, experience, and value of Buick’s new energy products. There are indeed several important tasks that buick needs to undertake to enhance its competitive edge in the new energy vehicle (NEV) sector.Firstly, we aim to enhance the overall market perception of Buick as a new energy brand. With the resources from both SAIC GM, we have enough confidence in our product force. The market and its consumers have highly recognized the Otenes Intelligent Electric Platform and intelligent cabin and driving technologies when the Buick ELECTRA E5 was launched.
Secondly, we will continue to bolster the technical and product strength of our brand in processes related to electrification, electric powertrain, and intelligent network connection. Next year, we plan on launching the PHEV Intelligent Hybrid product. Starting from 2025, Buick will undergo complete electrification, and all our new products launched on the market will be electrical products.
Currently, we have ELECTRA E5, E4, and Micro Blue V6 three electric vehicles. In addition to improving hardware, we also plan on enhancing product strength, software, customer experience, and OTA with steadily iterative upgrading and optimizations. We pay attention to customer VOC (Voice of the Customer) feedback daily and stay in tune with our electric car users’ experiences, feedback, or even complaints. This way, we can respond and make corrections quickly, thereby constantly improving customer ratings.
Furthermore, we’re also planning on the market release and layout of new electric products from next year when the GL8 launches its PHEV hybrid products, through 2024, 2025 up to 2026. We hope that through the application of these new technologies and products, Buick’s market standing and renown on the new energy track will elevate swiftly.
And in line with the overall product planning, we’re also devising new channels. From 2024 to 2025, dependent on the new energy release pace, we’ll expedite the sales channel construction for electric models in key cities. This channel construction will operate in accordance with the unique market characteristics and consumer capacity of each city, showcasing diversity and phased advancement.
Thirdly, we plan on enhancing the construction of our marketing digitalization. Based on the VOC (Voice of the Customer) and the entire end-user app’s customer experience feedback, we intend to hasten promoting marketing digitalization. As ELECTRA E5, E4, and Micro Blue V6 have been launched, we have accumulated many customer experiences and requirements. Presently, we are advancing digital construction for future new channels and products, centering on improving customer experiences to strengthen speedy responses and connection, thereby improving our terminal management and overall customer experience.
Lastly, our focus lies on user operations. Through channel construction and digital marketing, we seek to improve our customer service capability. This includes leveraging Buick’s existing user base of over millions to unearth our customer base’s full capacity. As of now, Buick’s active user base exceeds 3.8 million. We aim to enhance their experience and word-of-mouth publicity regarding Buick’s electric products.Therefore, the price war is temporary; our ultimate goal is to elevate Buick into one of the mainstream brands in China’s new energy vehicle competition through comprehensive improvements in brand, product, channel, and service.
Interviewer: The growth of joint-venture car companies was once linear; however, in terms of sales volume and market share, they are currently experiencing fluctuations. I’d like to ask, where does SAIC GM stand at present? Is it at a stage where it will soon recover from its slump? Do you have any specific expectations and requirements for production, sales, and market share next year?
Luxury MPVs are a new focus in the market, with new car makers debuting high-end, all-electric MPVs at the Guangzhou Auto Show. Their main targets are the GL8 and the Buick Century. Buick will launch a hybrid GL8 next year. Do you think this is sufficient? How can Buick satisfy the market’s demand for these luxurious electric MPVs?
Zhuang Jingxiong: The sales volume and market share of SAIC GM will definitely stop falling and start rising next year. Furthermore, we plan to enhance our market share even further.
Yao Fei: Buick’s MPVs, including the Century and GL8, are crucial to both the brand and the company.
The addition of new brands and products in recent years has increased the capacity of the entire MPV market. Amidst this growth, GL8 has maintained its position as the market leader, with over 1.7 million users to date. Despite numerous competitors, GL8, especially in the MPV sub-market in 2023, has consistently been the top performer. Since its launch in December last year, the Buick Century has remained at the top of the over ¥500,000 domestic luxury MPV chart for a year. This indicates that Chinese consumers highly approve of Buick’s MPVs, especially the high-end luxury and comfort we deliver to our high-end customers.
However, given the evolving market, we are also focusing on improving the electrification of Buick’s GL8. As such, we are planning to enrich and enhance the Buick MPV product range and expedite their market launch. The Buick MPV family will continue to evolve and upgrade to meet the demands of Chinese consumers, ensuring we provide the best products and services for high-end business people and families.
Interviewer: I’d like to ask the brand leaders about the health and profitability of their channels. At a time when almost all joint ventures are seeing a rapid decline in the market share for petrol vehicles, and profitability is very poor, what is your channel strategy?
For the third question, Buick currently operates its electric and petrol vehicles within the same traditional channel. Some traditional car companies and domestic car companies, which accompany their channels through the transformation, propose traditional authorization methods. These appear to be low in efficiency and high in cost, leading to change and the cutting of any premium charges. How do you consider this issue, and do you have any plans?Lu Yi: This year has been challenging for the auto industry overall, with low profitability for both the manufacturers and the entire dealership network. This is the current reality. As manufacturers, we will advance or retreat with our dealership, establishing a symbiotic relationship.
Regarding dealership transformation, we have three brands with over 1,200 4S stores, 90% of which are operating smoothly. The presence of new energy stores, regardless of whether they’re labeled as 4S stores, commissioned agencies, or directly-operated, signify the evolution of our dealership model. The sales model for new energy vehicles already diverges from those of gasoline-powered cars. Next year, we anticipate the launch of 100 – 200 more outlets for new energy vehicles to strengthen the entire network.
Yao Fei: Despite the substantial marketing pressures in recent years, communication and cooperation between the Buick brand and its dealers have remained close. In fact, this year, compared to the dealership network of the entire joint-venture brand, Buick’s profitability has been relatively stable.
Dealers primarily value future development and whether they continue to have faith in our collaboration. With the introduction of several Buick electric vehicle models this year, dealers’ overall confidence has risen because they see Buick’s transformation opportunities in the green vehicle market. During our recent discussions with dealers, I’ve sensed an increase in overall dealer morale.
Dealers are primarily concerned about customer traffic. The gasoline car market has been contracting because of decreasing customer visits, causing much worry for the dealers. However, since the launch of several Buick electric cars this year, our overall customer flow has been steadily rising, especially in tier 1 and 2 cities. Approximately 50-60% of customers are specifically interested in electric vehicles. Therefore, from the standpoint of dealers and frontline sales, there is strong confidence in catering to these EV-curious consumers.
Here’s another example. Selling gasoline cars is not as straightforward as it used to be, with customers spending a significant amount of time negotiating prices with salespeople. Conversely, salespeople are more willing to deal with electric vehicle customers who are more interested in the product and technology. This transition allows sales consultants to focus more on product information, customer service, and customer experience. They find this process more fulfilling.
Thus, through Buick’s transition to electric vehicles, our dealership network will strengthen its collaboration with the brand. I am hopeful that, during Buick’s transition, we can progress together with the entire network.
Reporter: How can one avoid the impact of geopolitics on business operations? Will SAIC GM consider Disclosing more investment data from both shareholders in the future? An enormous advantage of mainstream enterprises lies in their customer base. how can one further convert the existing customer base?
Zhuang Jingxiong: Recently, Sino-US relations have showed signs of stabilization, and cooperation for mutual benefit and resolution of differences remain necessary between both countries.
Geopolitics can impact our organization, albeit not significantly. We must focus on managing our enterprises well. As long as our products and services cater to consumer needs, we can provide real social value and bring value to our users.
In May this year, General Motors Chairman and CEO Marry Barra expressed during her visit to Shanghai, “Shanghai is crucial for the development of General Motors in the Chinese and global markets, and we look forward to a successful collaboration with SAIC Group for the next 30 years.”
Regarding investment, SAIC GM has never stopped investing in China. In respect to electrification and intelligence, we plan to invest 70 billion by 2025 for the transition.
Lu Yi: The user-base, we firstly need to enhance user operations, there are two types: First is the maintenance of users, we must pay more attention to customer satisfaction and experience. We have made some internal adjustments, we separated the after-sales of the brand business department from the original spare parts sales channel, allowing our after-sales department to focus more on the improvement of dealer after-sales services, increase in customer satisfaction, and enhancement of user value.
The second is user development, which is related to our marketing base mining. We, SAIC GM, have over 20 million users, with active Buick users exceeding 5 million. How to do a good job in base mining, establish a good customer reputation, is also a problem we need to solve in marketing.
Everybody used to buy gasoline cars, which have simple demands. Now, those who buy electric cars look at the functionality, screen, mobile side, customer side, driving experience, and often join many group discussions. The experience of the car is becoming more important. Traditional automakers also need to adapt constantly. In this regard, we are increasingly giving importance.
Now we have managed to integrate our engineering design with VOC input, marketing, and after-sales service in a fast response operation.
Reporter: What’s the timeline for selling new energy vehicles at a loss? The sales of electric vehicles from traditional luxury brands are not good, can you analyse the main reasons?
Zhuang Jingxiong: We still need to further reduce our costs and increase efficiency, so that our cars can be profitable. All related work, we are doing. Now our scale effect has indeed started, the volume goes up, the price naturally falls. In addition, we and some suppliers and strategic partners will also discuss some sort of rebate situations. Our goal is to hope that by next year, our new energy vehicles can become profitable. The key is to reduce costs and increase efficiency, to enhance our overall strength.
In the long term, we need to further simplify the entire electric vehicle architecture, further modularize and integrate, we aim to build our big single products, increase the reuse of parts, and lower costs. Meanwhile, quality will also improve further.
Gu Ye Bin: For those of us who are traditional luxury brands, we have a very good accumulation in the field of gasoline cars, and the influence of the brand is predominantly gasoline cars. Now entering a completely new track, the greater your original inertia, the greater the challenge of transformation. This is an objective situation.
Overall, whether it is from the brand or dealer channels, including the company’s strategic layout. In fact, all luxury brands have realized the importance of the new track.On one hand, Cadillac, also known as SAIC GM, will steadfastly push for electric transformation, which is a promise we stand by. Along with the standard luxury edition of the Lyriq, also known as “锐歌”, surprises await you all tomorrow. Tailored according to Chinese customer requirements and our client’s experience post the Lyriq’s launch, we have created a brand new strategic vehicle model.
In terms of Cadillac’s electric transformation, our innovative channel capabilities, marketing strategies, and foundational excavation abilities play a significant role. We stand firm in our belief that Cadillac possesses the depth, strength, and ability needed to win this battle for renewable energy.
This article is a translation by AI of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.