2018 is a turning point worth remembering for Huamei car companies.
This year, Tesla decided to build a factory in the Chinese market and start mass delivery of domestic models at the end of the next year.
Under Tesla’s “catfish effect”, the market pattern of China’s new energy vehicles has changed.
However, the arrival of Tesla has made traditional American car companies such as GM and Ford more passive in the increasingly fierce competition for oil and electricity.
After Ford and Stellantis Group, GM is also in trouble in China.
Recently, GM’s boots for restructuring its business in China have also fallen to the ground.
On Dec.
4, GM said it planned to spend $5 billion to restructure its operations in China.
In China, the American system seems to be standing at the crossroads of fate, like treading on thin ice.
Only seven years ago, tall buildings collapsed.
In the Chinese market seven years ago, GM was the only car company that could compete with Volkswagen Group.
In 2015, GM narrowly beat Volkswagen Group with 3.
61 million vehicles, becoming the top seller of domestic automakers.
In 2017, GM’s annual sales in China exceeded 4 million for the first time and only for the first time.
Sales of its two main brands SAIC GM and SAIC GM Wuling reached 1.
18 million and 2.
15 million respectively.
The two joint venture brands SAIC GM and SAIC GM Wuling ranked third and fourth in domestic retail sales in 2017, respectively.
At that time, GM had 11 joint ventures and two wholly owned subsidiaries in China, with more than 58000 employees.
Ford also enjoyed great success in China, with sales of 1.
27 million vehicles in 2016.
Changan Ford, its joint venture brand, ranked ninth in domestic retail sales in 2016 with 957000 vehicles.
Sales of FCA’s Guangzhou Fick also peaked at 220000 that year.
During this period, American influence in the Chinese market reached its peak, accounting for 12.
3% of the overall market share (FIFA data, excluding SAIC GM Wuling sales).
However, with the rise of local car companies in China, American car companies are stuck in a quagmire of declining sales.
Ford China fell from 1.
27 million at its peak to less than 500000 in 2023, and FCA withdrew from the Chinese market.
GM’s decline in China has also become severe.
In the six years from 2017 to 2023, sales nearly halved from 4 million to 2.
1 million.
Its brands collapsed across the board: Buick and Chevrolet sales fell by 600000 and 550000 respectively.
Cadillac adopted a “price for volume” strategy to slow the decline, but with little effect.
SAIC GM Wuling sales also fell 800000 to 1.
2 million.
This year, with the arrival of the era of the same price for oil and electricity, GM’s decline in China has intensified.
In the first nine months of this year, its cumulative sales in China were only 1.
2 million vehicles, or a nearly seven-year low.
SAIC GM’s sales plunged 59% in the first November from a year earlier to 371000 vehicles.
Until Tesla was made in China, American sales in China picked up slightly.
In the early days, under the premise of low competition in China’s new energy market, Tesla, relying on technological advantages, brand appeal and CEO Elon Musk’s IP effect, sold 137000 vehicles in China in 2020, accounting for 12% of the domestic new energy market.
However, after 2022, with the rise of local new energy brands such as ideals and questions, Tesla’s growth momentum has been limited.
Now the increment brought by Tesla has been unable to fill the gap of GM’s declining sales.
Us car companies sold 1.
075 million vehicles in the first 10 months, down 22.
5 per cent from a year earlier, with an overall market share of 6 per cent, according to the federation of passengers.
Among them, Tesla contributed 2% of the share.
American car companies, which once led the Chinese auto market, are now experiencing an unprecedented cold winter in the market.
All this has lasted only seven years.
Hey, how did you get to this situation? At present, there are mainly three American brands active in the Chinese market-Ford, General Motors and Tesla.
Ford is the first to go downhill in the Chinese market, which is closely related to the development of the joint venture brand Changan Ford.
Changan Ford plummeted nearly 800000 vehicles in three years, leaving only 184000 in 2019.
Another joint venture brand, Jiangling Ford, is also mediocre in China, with limited profits.
The reasons are slow iteration of products, lack of market sensitivity, Ford’s lack of attention to the Chinese market, and so on.
For example, the hardline off-road SUV Ford Marines has been renovated to the sixth generation, and the new generation of models has been on sale overseas since 2021, but it was not made until this year, missing the opportunity for the development of China’s cross-country SUV market.
In addition, Liema’s pricing of about 300000 yuan and weak brand appeal make its market performance after listing average.
According to big data platform data of Gaishi automobile industry, monthly sales of fierce horses hovered around a thousand vehicles.
In the same period, tank brands, as independent hardline cross-country SUV “crab eaters”, monthly sales are stable at more than 10,000 vehicles.
GM’s plight in China is related to its strategic mistakes.
Around 2018, SAIC GM’s main brands Buick and Chevrolet have promoted three-cylinder engines, originally intended to improve fuel economy, but “hurt” consumers’ hearts.
The analyst of Gaishi Automotive Research Institute pointed out that SAIC GM made a big mistake in choosing a firm product technology route.
In the past two years, due to the lack of competitive products, SAIC GM adopted the price-for-volume strategy to deal with the price war, resulting in similar positioning and prices of the three major brands Chevrolet, Buick and Cadillac, and obvious competition among internal products.
Under the baptism of the market, GM’s former sales trump cards in China-Wuling Hongguang, Baojun 730, Buick Weilang and other models, are now hard to find that year’s elegant demeanor.
You know, in 2017, only Wuling Hongguang, Baojun 730 and Buick GL8 sold nearly one million vehicles, accounting for half of the domestic MPV market.
What’s more, there are “Ivy League” fuel trucks such as Yinglang, which sells 400000 vehicles a year, and Weilang, which sells 180000 vehicles a year.
Today, the Baojun 730 has stopped production, and the Wuling Hongguang S series sells less than 10,000 vehicles a month.
The Buick GL8 did not recover until the mixed version came on the market, but it has been surrounded by powerful enemies such as the momentum D9.
According to the insurance data in the first nine months of this year, sales of Buick Oncoway, Weilang and other major models fell 47.
5% and 33.
7% respectively compared with the same period last year, and monthly sales shrank to about 10,000 vehicles.
The main Chevrolet model, the Cruze, plummeted 71% over the same period.
SAIC GM also missed the opportunity in terms of electric transformation.
As early as 2016, its Buick brand launched a new energy concept car.
However, the first model launched three years later, the Micro Blue 6, is difficult to compete with its own brands because of its high price and lack of competitiveness.
Analysts at the Global Automotive Research Institute believe that SAIC GM’s new energy products are too focused on platform three technology and chassis performance to occupy the minds of users, leading to new energy market regulations.
The small model failed to support the large-scale development of the company’s sales.
Although SAIC GM Wuling is relatively active in the field of new energy, it is mainly concentrated in the middle and low end market.
With the strong entry of independent brands such as Geely and Changan, its market share continues to shrink.
GM’s overall sales in China fell 21 per cent in the third quarter from a year earlier, according to the data.
After the decline of GM’s main models, Tesla’s two domestic models, the Model Y and the Model 3, became the two highest-selling American models in China, with 341000 and 123000 vehicles at risk in the previous September, respectively, making it one of the few American models to maintain sales growth.
Among them, Model Y is also the domestic new energy medium-sized SUV sales champion.
However, Tesla’s shortcomings are also very prominent, the product upgrading is slow, and there are only two domestic models on sale in China.
At the same time, under the encirclement and suppression of competitors, Tesla’s brand appeal and technological advantages have weakened, resulting in a slowdown in sales growth.
In the first nine months of this year, Tesla sold 460000 vehicles in China, up 8.
3% from the same period last year, lower than local automakers such as BYD (35.
2%), Geely Motor (93.
9%) and ideal Motor (38.2%). Tesla’s share of the new energy market shrank to 6 per cent.
Model 3 is being eroded by BYD Qin L and Xiaomi SU7 in the medium-sized car market, and the position of Model Y in the medium-sized SUV market is also challenged by BYD PLUS DM-i.
In the highly competitive soil of China’s auto market, American car companies need to find new ways to survive.
Going or staying, the difficult choice and the dismal performance of the Chinese market have turned Ford and GM’s business in China from profit to loss one after another.
GM reported a loss of $350 million (2.
32 billion yuan) in its China business in the first three quarters, while its global profit surged 16%.
The Chinese market has become a hot potato from the previous “profit cow”, which contributed $4.
12 billion to the parent company in 2016, accounting for 1/3 of the world’s total.
Ford has lost more than $1 billion in China in the past three years, while its Changan Ford made a net profit of 19.
6 billion yuan in 2016.
At this crossroads, the attitude of the two car companies is quite subtle.
Before taking office in 2022, Ford China President and CEO bluntly asked Ford Global CEO Jim Farley, “do you want to stay or leave?” Well, keep fighting.
It’s Ford’s choice.
Ford tilted its resources to Jiangling Ford, launched the Ford vertical and horizontal brand, focused on hard off-road markets such as SUV and pickup trucks, and put on the new Ford Leader, Reed Horse and other models.
The leadership of Changan Ford is given to Chinese partner Changan Motor.
Changan Ford and Changan Automobile have set up a new energy joint venture, of which Changan Motor holds a 70% stake.
Obviously, Changan Ford has become a testing ground for Ford’s electrification transformation in China.
After two years of adjustment, Ford’s market in China has not deteriorated further.
Changan Ford’s sales improved slightly, with cumulative sales of 217000 vehicles in the first November, up 6 per cent from a year earlier.
In the past two years, GM also accelerated its transition to electrification.
SAIC GM has invested heavily in electrification and intelligence, and plans to invest 70 billion yuan by 2025.
From the Ortenon platform to Buick new energy models (Buick E5, E4 and other new cars), and then to Cadillac’s electric camp (Ruige, proud song and other products), all show the determination to transform.
At the same time, GM has also adopted strategies such as reducing inventory, stabilizing terminal prices and reducing structural costs in the Chinese market.
It is reported that in the third quarter of this year, the inventory of GM dealers in China was more than 50% lower than that at the beginning of the year.
But in the face of unimproved sales.
GM has further adjusted its strategy for the Chinese market by restructuring its joint venture, or closing some of its factories in China and cutting unprofitable models.
However, the specific plans and details of the business restructuring have not yet been announced.
At this stage, GM also stressed that it will stick to the Chinese market.
GM’s business in China can be a good asset, but it just needs some restructuring.
I think our brand will still have a place in the Chinese market.
” GM plans to close some factories in China and optimize its investment portfolio.
However, analysts at the Global Automotive Research Institute believe that the two major car companies can focus on market segments and become leaders in track segments, such as medium and large products such as MPV, off-road SUV and pickups.
He put forward the following suggestions: first, to adopt the latest platform technology and intelligent technology of Chinese partners.
second, to consider making use of global resources to help Chinese partners go out to sea.
third, to acquire potentially advantageous technology enterprises to learn from their strong points to offset their weaknesses.
fourth, in-depth localization, to achieve organizational management localization decision-making, local teams independently develop models and technological innovation.
However, judging from the current market pattern, analysts at the Global Automotive Research Institute believe that it is extremely difficult for GM and Ford to reverse trading in China.
In this competitive track, Tesla has become the last hope of American car companies.
If the FSD system (fully autopilot) can enter China, Tesla may be able to increase profits and expand market share.
Moreover, due to the support of brand power and technological innovation ability, Tesla can still maintain the upward momentum in the Chinese market at the present stage.
But for GM and Ford, analysts at the Global Automotive Research Institute believe that if there is no significant improvement in sales, light asset management may be the last resort-which in effect means abandoning the market once seen as the most potential.
, return to the first electric network home page >.
