In mid-February, in view of the decline in sales and profits in China, GM publicly stated that it would consider adjusting its market strategy in China and shifting its focus from mainstream models to luxury models. However, GM did not seem to have expected that the "slap in the face" would come so quickly.
Recently, SAIC-GM Buick Electra E4 value-added model was officially launched, with a total of 4 models and a price range of 15990,000-22990,000. Compared with the Buick E4 on sale, the new car has been upgraded in configuration, which can be regarded as an upgraded model, but the price has been lowered, and the entry threshold is 30,000 yuan lower than that of the model on sale.
Not only that, SAIC-GM's Buick and Cadillac brands have also followed up on preferential policies, and high-end models have dropped by up to 70,000 yuan, all of which are contrary to GM's idea of increasing profits through high-end models.
Re-evaluate your business in China
At the end of January, GM released its Q4 2023 and full-year earnings reports, and like most multinational automakers, GM also achieved strong results last year.
According to the official financial report data, GM achieved 429 in the fourth quarter$800 million in revenue, net profit of 21$0.2 billion, compared to $19.2 in the same period in 2022$9.9 billion was an increase; For the full year of 2023, GM achieved revenue of $171.8 billion, a record high, a year-on-year increase of 96%, net profit reached 10.1 billion US dollars, a year-on-year increase of 194%, adjusted EBIT of $12.4 billion.
It is reported that of the $12.4 billion, about $12.3 billion was earned in the United States. For GM, the Chinese market seems to be left with only a double decline in sales and profits after brutal competition.
Last year, for the first time since 2009, GM's sales in China were lower than those in the U.S., with cumulative sales of 20990,000 units, down 8% year-on-year9%, with a market share of 98% to 84%。Among them, SAIC-GM's cumulative sales last year were 870,000 units, a year-on-year decrease of 161%；SAIC-GM-Wuling's cumulative sales volume was 12290,000 units, down 29%。
At the same time, GM's performance in China has also been declining, and last year, the company's profit in China was only 4$4.6 billion, a year-on-year decrease of 34%, compared with the profit in 2018 that reached $2 billion, a decrease of 348%. In addition, GM expects to continue to lose money in China in the current quarter as production and inventory adjustments are adjusted.
To that end, after the release of the earnings report, GM CEO Mary Barra said at the ** conference that he would reassess GM's China business, and said that no choice was "impossible".
High-end is not a "death-free gold medal".
The situation in the Chinese market is very different now than it was five years ago. We want to be able to get involved in this market in the right way, and I think it's more of a premium and premium segment. After saying that it was reassessing its business in China, Birla further added on February 15.
According to the plan, SAIC-GM will launch eight new models in 2024 and 2025, and its three major brands of Chevrolet, Buick and Cadillac will launch a number of new models, covering gasoline, hybrid and pure electric models, as well as sedans, SUVs and MPV models.
From the perspective of new car planning, the Envision Plus, Envision S model, the new Cadillac XT5, the Chevrolet Explorer EV, and the upcoming domestic Chevrolet Cruiser TR**ERSE are also more high-end models under the brand.
However, relying solely on a premiumization strategy may not be able to fundamentally improve GM's profitability. At the beginning of this year, BYD took the lead in launching the official reduction strategy, and Qin plus and destroyer 05 both launched the Glory version of the model, pulling the entry price of new energy models to 7980,000 yuan, starting lower than fuel vehicles, and then followed up by domestic brands such as Wuling, Nezha, and Geely, and the "* war" has once again become the main theme of China's auto market.
SAIC-GM, which wants to change the decline in profits, has not been exempt. First of all, Buick announced its latest limited-time preferential policy on its official Weibo, from February 19 to February 29, Buick Regal, Valeant Pro, Envision Plus three models are available in 350,000 yuan, 550,000 yuan, 650,000 yuan bicycle discount and replacement subsidy. In addition, Buick's main force in the MPV market, Buick GL8, also launched a new gift, which can be replaced up to 10,000 yuan.
Subsequently, Cadillac began to reduce prices, and the 2024 Cadillac CT5 28T luxury model was officially reduced by 70,000 yuan, and the guide price was adjusted to 21970,000 yuan, not only the whole system is equipped with a 33-inch 9K ultra-curved retina screen as standard, L2 level auxiliary driving functions, and the guide price is lower than 24The 590,000 yuan 2023 Tesla Model 3 rear-wheel drive version has become the lowest-priced luxury brand mid-size sedan in the Chinese market.
In fact, most of the previous high-end models were aimed at high profits, and volume was never the goal. But now, in the face of constant market changes and intensified competition, the high-end market has long been a different scene, and luxury brands, including BBA, are all exchanging price for volume in an almost crazy way, the purpose of which is to grab market share. In this context, GM should probably think about how to survive first, and then talk about profits.