In the past, our reports highlighted SAIC’s significant struggles with declining sales, prompting concerns about its future reliance on the Wuling joint venture for continued growth. The joint venture is comprised of SAIC holding a 50.1% stake, General Motors owning 44%, and Guangxi Automobile Group, previously known as Liuzhou Wuling Motors, possessing a 5.9% share. Recent data suggests a significant 30% boost in sales for the Wuling joint venture during the initial weeks of August, potentially providing a welcome respite from the sales struggles faced by SAIC and GM.
According to a recent CCTV report, the driver’s decision was reportedly influenced by the surprising doubling of federal funding for the popular “Cash for Clunkers” vehicle trade-in program. The initiative was launched in April and will continue through to the end of the year. Patrons can receive up to a 10,000 yuan ($1,400 USD) rebate when purchasing and selling a new, domestically manufactured electric vehicle or a new energy vehicle (NEV) registered before April 30, 2018, as well as when buying a brand-new NEV. The vehicle, once traded in, would likely meet its end by being scrapped. By the end of July, a significant update was announced: participants in the program would now have their funds doubled up to 20,000 yuan (approximately $2,800 USD), with those who had already taken part receiving the increased amount.
Notably, SAIC GM Wuling recorded a significant 30% month-over-month and 25% year-over-year increase in sales during early August, resulting in a market share of 5.7%. Notably, the performance of individual cars within this context witnessed a substantial surge, with the Bingos’ vehicle portfolio achieving a remarkable 87% increase in efficiency from one month to the next, and a significant 73% year-over-year boost. Sales of the Baojun Cloud surged 57% month-over-month and a whopping 97% year-over-year.
Notably robust gross sales have emerged in Shandong and Henan provinces, where vendors are grappling with stock shortages. Substantial curiosity has arisen not only due to federal government subsidies, but also as a result of various promotional initiatives undertaken by dealerships, such as door-to-door test drive events designed to alleviate concerns among potential buyers and on-site used car evaluations for trade-ins.
Cumulative gross sales of the joint venture surpassed 29 million in June 2024, driven by the phenomenal success of the Hongguang Mini EV, which sold an impressive 1.3 million units over a four-year period since its launch in the automotive market. The Wuling Bingo series has proven to be a resounding success, boasting gross sales of 280,000 units over its first 15 months on the market.
Editor’s observe:
While the joint venture’s gross sales efficiency is a welcome success for both SAIC and General Motors, the news is tempered by underlying concerns. Gross sales of the SAIC-GM joint venture have declined sharply by 55% over the past year. In China, General Motors relies heavily on its Wuling joint venture to drive profits. Despite SAIC’s diversified business portfolio, its joint venture with Wuling is still unparalleled in terms of sales figures; only the Volkswagen partnership comes close, but the longevity of this collaboration remains uncertain, as exemplified by the decline of the General Motors joint venture’s sales. While most Wuling models are famously affordable, with nearly all options priced below 150,000 yuan (approximately $21,000 USD), numerous styles can be found at even more budget-friendly rates. The reliance on gross sales from such a single unit does little to ensure long-term profitability for either SAIC or GM in China, raising concerns about their sustainability in the market.
Sources: Autohome, Quick Expertise
