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Can SAIC's "going out" new energy "walk back"?
Jul 6,2020 09:51CST
translation
The content below was translated by Tencent automatically for reference.

SMM News: five consecutive years of wholesale sales "flattened" growth, should be SAIC New Energy out of the best report card, but this record has not been able to continue in 2019. From January to May this year, SAIC's wholesale sales of new energy have fallen by 57.1% compared with the same period last year. If you want to maintain last year's level, it means that SAIC's new energy sales will reach an average of nearly 9000 vehicles a month since June.

Judging from the situation this year, this is an impossible task.

However, SAIC New Energy may not be so worried. Compared with other auto companies, SAIC New Energy has one more choice.

Cross the ocean in search of new markets

In 2018, SAIC adjusted the previous strategy of the new four modernizations, changing "electrification", "intelligence", "networking" and "sharing" to "electrification", "intelligent network connection", "sharing" and "internationalization".

According to the annual report data, SAIC achieved vehicle exports and overseas sales of 170000, 277000 and 350000 vehicles respectively from 2017 to 2019, an increase of 31.8%, 62.5% and 30.4% respectively over the same period last year, and vehicle export sales ranked first in the country in a row.

Although the new energy sector accounts for a small proportion, it has also boarded a big ship sailing abroad.

According to Evsalse data, SAIC's global sales of new energy passenger vehicles reached 137700 in 2019, while its cumulative domestic sales were 76000, according to the Federation of passengers. Therefore, 44.8% of the sales of SAIC new energy passenger cars in 2019 come from overseas markets.

From January to May this year, the ratio was 49.3%.

For SAIC New Energy, this road of "going out" can be described as inadvertently inserting willow into shade.

In 2019, the price war is hot, but SAIC New Energy does not want to follow too much.

"the price competition in the market (at that time) has left us with only a theoretical gross profit. If prices fall further and subsidies fall further, there is nothing we can do if we do not reduce costs on a large scale or find a new way out." Zhu Jun, deputy chief engineer of SAIC, said at the 100-person meeting of electric vehicles at the beginning of this year.

So in the second half of 2019, bringing back Mingjue, a brand already from overseas, became an attempt at SAIC's new energy. The Mingjue EZS pure electric, with a domestic price of 11.98 to 149800 yuan and a NEDC mileage of 335km, sells for about 300000 yuan abroad. Unexpectedly, the response from overseas markets was very good, and it was sold in Thailand, India, the United Kingdom, Norway and the Netherlands.

"the income of India and Thailand is not as high as that of China, but the price of our car is much higher than that of the domestic market, and the sales of this model in these markets are several times larger than that of the domestic market." Zhu Jun once revealed.

From October 2019 to the end of the year, Mingjue EZS released overseas sales figures of 14000 vehicles.

If we do not follow up the price war, the domestic private market will shrink.

Although it has made great progress in the foreign market, the automobile and new energy has not improved much in the domestic market.

Affected by the sharp decline in subsidies in 2019, several major car companies, including BYD and BAIC New Energy, saw a sharp increase in wholesale sales in the last month of the transition period. However, SAIC New Energy experienced a "counter-market" decline, and its sales did not improve significantly for the following five consecutive months, only pulling up sales to more than 10,000 vehicles in December, which is the only time SAIC New Energy has sold more than 10,000 vehicles in a single month in 2019.

In response to this situation, Zhu Jun did not shy away from saying at the hundred people meeting that "the sales situation in 2019 is not very ideal."

This may have something to do with SAIC's judgment of the market.

In an exclusive interview with the media, Zhu Jun said that the domestic market is facing a serious problem of overcapacity in recent years, and it will be fierce if the automobile industry competes in a stock market behind closed doors.

"the result is that everyone is driving down prices in order to grab market share, the price is getting lower and lower, the brand image will not go up, and the real profit space only belongs to the top part." Zhu Jun said.

Due to the lack of main competitive models and not following up to participate in the price war, SAIC New Energy's exposure to the private market fell by 66.4% from January to May this year. At the same time, the product structure has also undergone great changes.

According to the insurance volume of strong traffic insurance, in the personal market of SAIC New Energy from January to May 2019, 59.3% were insured for pure electric models, reaching 9074 vehicles; the remaining 40.7% were insured for mixed models. Among them, the main market for pure electric models is Beijing, with a total of 5402 insured vehicles, accounting for 35.3% of the personal market.

From January to May this year, SAIC New Energy insured only 1890 pure electric models in the private market, accounting for 36.8 percent, while Beijing, the main market, only insured 1140 vehicles, which is a large area lost compared with the same period last year.

The newly listed SAIC Clever and Roewe RX5 eMAX also contribute only 3.4 per cent and 13.4 per cent to the private market.

In the domestic personal market, SAIC's new energy volume is gradually decreasing.

But for SAIC new energy, it does not mean giving up.

"go out" and "walk back"

Every car company seems to have some of the temperament of its city, just as GAC always shows a "revolution", while SAIC appears to be more economical.

In recent years, major car companies are launching their own pure electric platforms, but SAIC New Energy has not followed the "trend".

"you can't make a platform for the platform." when asked by the media about the development progress of SAIC's pure electric platform, Zhu Jun replied, "many car companies say to be a platform, but the most important thing to do a platform is to have a sales scale. This is the original intention of being a platform."

According to Zhu Jun, the truly platform products of SAIC new energy will first be developed from platform components, but it is uncertain when they will be put into production, probably in 2022 and 2023.

Although it has not thought of giving up the domestic market, SAIC New Energy is still cautious and always follows its own ideas and pace.

At the beginning of this year, when everyone was attracted by BYD Han and Xiaopeng P7, the new version of Roewe Ei6, which appeared in the catalogue recommended by the Ministry of Industry and Information Technology, did not get much attention.

But this is a product with hard power.

"compared with the long wheelbase models such as BYD Han and Xiaopeng P7, the compact model is the biggest market segment, so I pay more attention to Roewe, which makes 600km + NEDC life under the 2715mm wheelbase. It is very impressive to be able to extend the NEDC to 600km under the premise of the wheelbase of the compact model. " This is what a practitioner in the new energy industry said of the car.

On May 7 this year, after two months of warm-up, SAIC Roewe's new R mark finally showed its true face. As Roewe's middle and high-end new energy vehicle logo, the R standard includes the flagship MARVEL series, the car ER series, and the SUV series is also under planning.

The new Roewe Ei6 is the Roewe ER6, the first pure electric car under the R standard.

At the recent technology exchange meeting held by Roewe, the Roewe official said that the ER6 will be equipped with an innovative large module battery scheme for the first time and will use NCM523 cells with an energy density of 180Whhand kg, which will enable the ER6 to have a comprehensive range of 620km, with a comprehensive strength comparable to that of the 811 battery. The ER6 will also become the only model on the market that sells for less than 200000 yuan but has a range of 600 + kilometers. If the final price can be less than 150000 yuan, the extremely high performance-to-price ratio of ER6 will have a great impact on the current king in this field-Guangzhou Automotive New Energy Aion S.

SAIC New Energy has taken the first step of "walking back" to launch products with excellent product power under a new brand, but it is still unknown whether it can continue and how to continue.

At present, the demand-oriented market is gradually occupied by intelligent Internet technology leaders, service value leaders and ultimate cost performance leaders. How much value Roewe ER6 can create to consumers still needs to wait for market feedback.

In the upward part of the new energy brand, there is no successful precedent in the field of traditional car companies. Can SAIC New Energy, which still needs to touch the river, become the first successful traditional car company?

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