Overseas sales account for one-third of Chinese cars. How did SAIC do it?
The overseas market of SAIC is made by strength and sweat. Wu Gang, general manager of SAIC Motor South America, publicly told a small story of his personal experience: when MG brand was exploring the South American market, he accidentally learned that the sponsorship of colocolo, a top Chilean football club, would expire, so he took the initiative to contact colocolo for cooperation, but Colocolo didn't know MG at all. After trying various methods, Wu Gang won a road show opportunity and provided English materials to the other party. But when Wu arrived at the meeting, he was told it had been cancelled because colocolo could not understand English. In desperation, Wu Gang negotiated two hours to translate the original English material into the local language. Later, after 10 months of back and forth communication and 32 revisions to the contract, SAIC South America became the sponsor of Colocolofrom 2018 to 2021. Thankfully, MG's entry into the local market, colocolo, helped. In fact, SAIC has faced numerous challenges like Mr. Wu's in expanding overseas.
In terms of globalization, SAIC was an early adopter and has been trying to become a truly global company. It should be said that SAIC is a typical epitome of the globalization of Chinese auto enterprises. It has experienced the transition from market technology to reverse technology export, from joint venture with foreign auto brands to gradually independence, and developed its own brand, and then exported its brand to overseas. In other words, SAIC has gradually realized the transformation from "being globalized" to active globalization in the process of globalization. Saic ranked fourth among Chinese auto makers in terms of export volume 10 years ago in 2012, and ranked first for six consecutive years in 2021. At present, SAIC is actively exploring developed markets in Europe and the United States, and entering the middle and high-end markets. How did SAIC continue to advance in the process of globalization and become the leader of "going to sea" for Chinese auto companies? One sentence summary is: to forge iron also need to be hard.
Accumulated more than 3 million, six consecutive years first
At present, China's automobile export situation has undergone great changes, is from "quantity" to "quality" advanced. First, the scale of exports has exploded. From January to August 2022, automobile enterprises exported 1.817 million vehicles, with a year-on-year growth of 52.8%. In August, the export reached a record high of 308,000 vehicles, exceeding 300,000 vehicles for the first time in a month. In 2021, the export volume reached 2,015 million units, a year-on-year increase of nearly one times, ranking the third in the world, next only to Japan and Germany. Secondly, the export market is becoming more and more comprehensive, from the past mainly in developing countries, to the mainstream market of developed countries. Third, export models are more advanced, from the low-end car market in the past, gradually shifted to the high-end car market, and to global products. The average price of car exports is gradually increasing, such as $16,000 for the January-August period of 2022, compared with $15,300 for the same period last year. Finally, the export strategy changed from passive to active, such as the establishment of local factories and self-established sales channels, and the transformation from simply selling cars to the model of the whole industrial chain going abroad. The sustainable development of Chinese automobile export is increasingly apparent.
As a leading enterprise in China's automobile manufacturing industry, SAIC has taken the initiative to build an "automobile business card" made in China in the new era and become a leader and new benchmark in the "going to sea" wave of its own brands. From January to August 2022, SAIC sold nearly 580,000 vehicles overseas, up 56.7% year on year; In 2021, SAIC sold 697,000 vehicles in overseas markets, up 78.9 percent year on year. At present, SAIC Motor is the first domestic auto company whose overseas sales volume has exceeded 3 million, ranking first among Chinese auto enterprises in export volume for 6 consecutive years. "Every 3 Chinese cars sold overseas, one is made by SAIC Motor", and it has formed six "50,000-unit" regional markets in Europe, Australia and New Zealand, America, Middle East, ASEAN and South Asia.
At the same time, SAIC is actively promoting the transformation of its overseas market structure to promote the faster development of the group's own brands, new energy vehicles and the "new troika" of overseas operations. In 2022, SAIC expects to sell more than 800,000 vehicles overseas, and Europe will be its first "100,000 vehicles class" overseas regional market. According to the plan, by the end of the 14th Five-Year Plan, SAIC is expected to sell 1.5 million vehicles overseas, 80% of which will be new energy vehicles in the European market, achieving full coverage of entry-level to middle and senior products, and forming comparative advantages in 6 key regional markets around the world. In 2025, SAIC will form a market of more than 100,000 vehicles in Europe, ASEAN and South Asia.
As a Chinese brand that "leads the world in automobile electrification and intellectualization" and a "pioneer in going overseas" of Chinese automobiles, MG brand of SAIC Motor has won the "Champion of overseas sales of Chinese single brand" for three consecutive years since 2019, becoming a new beacon for self-owned brands to "go overseas". On September 13, 2022, SAIC held the delivery ceremony of "10,000 Vehicles to Europe", the first global vehicle of China's automobile industry, and the MGMULAN global launch conference. The MGMULAN was marketed overseas as the MG4ELECTRIC. It was the first "Chinese car" to be sold in more than 80 countries around the world, and the first "global car" for the Chinese.
It is understood that MG brand has been incorporated into SAIC's self-owned brand system since 2007, and started the journey of "going to sea" to compete with international auto giants in Europe, Australia and New Zealand and other markets. In 2021, MG sold 364,000 cars in overseas markets. From January to June of 2022, MG's overseas sales reached 208,000 vehicles, a year-on-year increase of 68%, ranking among the top ten in 18 countries around the world. At present, MG has sold more than 1 million cars overseas.
MGMULAN (MG4ELECTRIC) is expected to achieve the global sales of 150,000 new cars next year, becoming the champion of overseas sales of China's new energy models, and becoming the first global car with cumulative sales exceeding "500,000 units" in China by 2025. "The MGMULAN is the first truly global vehicle for the Chinese auto industry," said Wang Xiaoqiu, president of SAIC. MG brand "from the world" has been given new technology, new mission by SAIC, and "back to the world". In the future, we will continue to improve the overseas new-energy vehicle spectrum, continue to build technology-leading global models, and accelerate the release of electric intelligent innovative products. By 2025, SAIC's annual sales in overseas markets will reach 1.5 million vehicles, forming markets of 150,000 vehicles, 200,000 vehicles and 300,000 vehicles, and making greater and more active contributions to 'smart manufacturing in China' to the world."
Last year, R&D investment exceeded 60 billion yuan, reaching 300 billion yuan in the 14th Five-Year Plan
Obviously, SAIC has made remarkable achievements in going to sea. This is closely related to its forward-looking decision-making and advanced technological development. The integration of the world's top technologies is an important cornerstone of SAIC's successful "going to sea" products.
In order to better adapt to the general trend of industry change and accelerate the layout and implementation of forward-looking technologies and innovative processes of new energy intelligent connected vehicles, SAIC established the "SAIC General Institute of Innovation Research and Development" in March 2022. At the same time, SAIC fully integrates its global innovation advantage resources, including five information technology centers for software, artificial intelligence, big data, cloud computing and network security, passenger car technology center, three overseas R&D and innovation centers in London, Tel Aviv and Silicon Valley in the United States, and three design centers in London, Munich and Tokyo. At present, the scale of independent research and development team exceeds 10,000.
At the same time, SAIC also laid out the international first-class level of "seven technology base". It includes three vehicle technology bases: "Xingyun" pure electric exclusive systematic platform, "Everest" electromechanical integration architecture and "Xinghe" hydrogen energy exclusive architecture, and four key system technology bases: "Blue Core" powertrain system, platforming "Rubik's Cube" battery system, "Green Core" electric drive system and "Galaxy" full-stack intelligent vehicle solution. They continuously enable SAIC's overseas product research and development, and foster differentiated competitive advantages for SAIC in the field of new energy intelligent networking.
For example, "Xingyun" of SAIC is the first pure electric exclusive systematic platform in China's automobile industry. It is flexible and compatible with future technologies and continuous self-evolution, and has strong technical malleability. It has 44 ~ 150kWh ultra-wide energy matrix and 150 ~ 600kW ultra-wide power range, which can cover the global market of compact cars, medium cars, medium and large cars, luxury cars and cars, sports cars, SUVs, MPVS and other different levels and types of vehicle products. It is also compatible with high voltage casting, solid state battery, wire chassis, full stack electrical architecture and unmanned driving and other software and hardware frontier technologies. According to the plan, based on this platform, SAIC will launch compact SUVs, medium and large SUVs, SUVs, sports cars and other pure electric "global vehicles" in the future.
In fact, MGMULAN (MG4ELECTRIC) launched recently is the first new product launched based on SAIC "Xingyun" pure electric exclusive systematic platform. In order to meet the diverse needs of overseas users for safety, environmental protection, intelligence and control, and to enrich the spectrum of new energy products in overseas markets, SAIC combined innovative technologies such as "Xingyun" platform, intelligent cockpit and intelligent driving, and integrated global superior resources to create this "global pure electric super crossover".
Developing these advanced technologies and ensuring the continuous introduction of new models cannot be achieved without continuous investment in research and development. In 2021, SAIC invested more than 60 billion yuan in innovation, and nearly 3,000 patents were granted. It is understood that during the 14th Five-Year Plan period, SAIC will accelerate the pace of independent innovation and invest 300 billion yuan in innovation fields such as intelligent electric, in order to fully transform into a high-tech enterprise.
Take the initiative to go global and build the advantages of a global system
The reason why SAIC has become a leader among Chinese automobile enterprises in "going overseas" and gradually formed a sustainable advantage in overseas markets is also closely related to the strength of creating global standard products and the support of global system.
First, actively facing the global market and developing products with global standards.
Saic new car research and development has always aimed at Europe, North America, South America, Australia and New Zealand and Asia and other international mainstream safety evaluation system five-star standard, the world's most stringent REACH environmental protection, E-MARK certification and other European standards, in order to meet the global six continents of more than 80 countries market access standards. Saic, for example, has broken ground in markets such as Germany, France and the UK in part because its products meet the highest standards of European carmaking.
At the same time, SAIC adopts adaptive development, so that its "going to sea" products can adapt to local conditions, realize localization, and form a set of product "going to sea" methodology. Enterprises often face cross-cultural difficulties when going overseas, because different countries have different cultures, consumption habits and preferences, and different standards and requirements for products. In order to meet the differentiated needs of users, SAIC develops products according to local conditions. For example, for European users, MG global car interior style is more concise, chassis conditioning is more rigid; For mountainous Chile, the vehicle climbing ability increased by 20%.
Second, the global system goes to sea to create a complete spectrum of new energy products around the world.
In order to fully land in the developed markets, we need to establish systematic advantages. For example, MGMULAN has a "European style" because it is supported by the MG brand globalization system. "As the first Chinese auto company to 'go global' in a systematic, planned and established way, SAIC attaches great importance to 'go global'," Wang said.
It is understood that for the global market, SAIC has established an automotive industry chain integrating research and development, marketing, logistics, parts, manufacturing, finance and used cars. At present, SAIC has four vehicle production bases in Thailand, Indonesia, India and Pakistan, more than 100 parts production and research bases around the world, more than 1,800 overseas marketing service outlets, and seven self-operated international routes in Southeast Asia, Mexico, South America and Western Europe. This has laid a solid foundation for SAIC's global development.
For example, Anji Logistics, a subsidiary of SAIC Motor, has the largest fleet of auto companies in China and the world's largest auto parts and vehicle logistics company. Its distribution network covers more than 600 cities in China and more than 100 countries overseas. The annual shipping volume can reach tens of millions of cars, which can ensure that products can be shipped to the world in the shortest time. And in the case of product problems in the shortest time to deploy parts. It well meets the needs of SAIC's globalization development.
At the same time, in order to better achieve product differentiation and cover more market segments, SAIC has the world's most complete product spectrum of new energy vehicles, and has been deeply involved in three technical routes: pure electric vehicles, plug-in hybrid vehicles and hydrogen fuel cell vehicles.
Through the comprehensive market test, the advantage of the global system in SAIC's "going out" process has been gradually highlighted.
Now, Chinese auto companies, including SAIC Motor, have begun to export technology, brands and culture from a one-way import to a more confident attitude toward the center of the global auto stage. As Mr Wang said: "In the past, we saw the world from China, but today we see the world from the world." Saic is such a practitioner, witness and creator of the future.