Global car market gazing through the lens of a top Chinese brand

While Chinese automobile brands are increasingly going global to seek new growth opportunities, the risks in the overseas market are also increasing by the day. This is due to pressure from trade protection policies in the United States and Europe, notes SAIC Motor Corporation in its latest annual report.

At the same time, as international competition is transferred to the domestic market, Chinese automakers will participate “more deeply” in competition in the global market. It is expected that in the next 3-5 years, the proportion of the country’s domestic vehicles in global sales will increase from the current 30 per cent to around 45 per cent.

SAIC Motor is no stranger to India where MG Motor is its business and retail brand with operations in Halol, Gujarat. The company had recently divested part of its stake to the JSW group and the road ahead will see greater focus on electrification.

The competitive landscape of China’s automotive industry is undergoing a disruptive reconstruction.SAIC Motor Corporation Annual Report

SAIC set up shop here by buying out General Motors’ (a longterm ally back home in China) facility in 2017 and then rapidly beginning production. Its debut SUV offering, Hector, caught the imagination of Indian customers and it has now thrown up another potentially huge success story with the more recently launched Windsor EV.

Going global

In 2024, China’s domestic market share of self-owned (homegrown) brands stabilised above 60 per cent and their average selling price increased by more than 30 per cent compared to five years ago. Self-owned brand automakers like Geely, SAIC, BYD etc have also been accelerating their ‘going global’ efforts and the growing trend of ‘domestication of international competition’ is now becoming increasingly evident.

SAIC says the new round of a technological revolution is driving profound changes in the global automotive industry. With the deep integration of electrification and intelligence, the product definition and user experience of automobiles are undergoing “revolutionary changes”.

Self-owned brands have also risen profoundly in the domestic market. Not only have their market shares surpassed those of joint venture brands, but with the cross-border entry of ICT (Information and Communications Technology) enterprises, the Internet strategy and traffic marketing have brought new challenges to the traditional marketing model of the automotive industry.

“The competitive landscape of China’s automotive industry is undergoing a disruptive reconstruction,” SAIC has noted in its annual report. The industry characteristics of “internal competition and external pressure” persist and as the automotive industry enters the “elimination competition” stage, the domestic market has experienced intense “internal competition” with price wars becoming increasingly fierce.

Demand for improvement

According to SAIC’s annual report, one of the main factors driving China’s automotive consumption is the demand for improvement. Based on the experience of leading countries, as the number of cars per capita increases and “non-first-time buyers” become the dominant factor in new car purchases, consumers have a stronger desire for larger car sizes and better comfort.

Considering the competitive characteristics of the Chinese market, continues SAIC, while products are trending towards larger sizes and higher-end features, the average price continues to decline. More cost effective large-sized vehicles could become the preferred choice for consumers when they make replacement purchases.

Two, plug-in hybrid products (including extended-range models) will gain greater popularity. Thanks to zero range anxiety and their strong adaptability to the environment, the growth rate of plug-in hybrid products (including extended-range models) has been significantly higher than that of pure electric products in recent years.

In SAIC’s view, the average annual growth rate of plug-in hybrid products (including extended-range models) will exceed 30 per cent in the next three years, thereby becoming the main growth driver in the new energy vehicle market.

Taking the launch of the new large-sized extended-range SUV as an opportunity, [IM Motors] will expand its scale… aiming to achieve a 50% increase in annual sales.SAIC Motor Corporation Annual Report

Proliferation of technologies

Three, the demand for intelligence has increased and with the rapid iteration of technologies such as AI, consumers’ attention and demand for intelligent cabin and driving technologies have also grown significantly. Meanwhile, tech equity (where everyone is able to access and benefit from technology) has promoted coverage of intelligent automotive technologies to mid and low-priced products.

Finally, says SAIC, the diversification of consumer groups and scenarios has led to more segments of the market especially among female and silver-haired users, as well as the emergence of new scenarios such as self-drive travel. “It is an important new opportunity for the Blue Ocean (new or untapped) market, as well as a new challenge for product definition and marketing transformation,” adds the company.

SAIC believes that the automotive industry in China will still maintain a stable and positive development trend in 2025 with sales of domestic automobiles expected to be approximately 32.9 million vehicles (including exports). Of this tally, new energy vehicles will be approximately 16 million, a year-on-year growth of 24.4 per cent, and exports of automobiles estimated to be 6.2 million units.

Lessons from consumer electronics

From SAIC’s viewpoint, by learning from the experience of leading consumer electronics companies in areas of research and development, operation, and marketing, it aims to enhance product competitiveness, user experience, and channel coverage.

The goal is to achieve annual vehicle sales of over one million units with a year-on-year growth of more than 40 per cent. IM Motors (the joint venture of SAIC, Zhangjiang Hi-Tech and Alibaba group) will also “continue to lead” with innovative technologies. “Taking the launch of the new large-sized extended-range SUV as an opportunity, it will expand its scale and enhance its publicity efforts, aiming to achieve a 50 per cent increase in annual sales,” says SAIC.

To improve innovation efficiency, the company will focus on moving the definition of products from “engineer’s thinking” to “user’s thinking”, opening up product and marketing links and achieving
interlocking. Based on the 5S user experience elements of styling, smart, safety, sustainability and satisfaction, a cost-competitive core value system for products will be prepared.

SAIC has said that it will achieve mass production and implementation of independent core technologies. More innovative achievements will be launched aiming to create unique selling points for vehicle products and further enhance differentiated competitive advantages in intelligent connected new energy vehicles.

Against the backdrop of intensified intra-industry competition in the domestic auto market and increased external pressure from international trade protection, the competitive landscape of China’s auto industry was undergoing profound changes.SAIC Motor Corporation Annual Report

Leveraging the scale effect

Beyond this, the organisational operation process will be continuously optimised through measures such as cutting management levels, streamlining the organisational structure, deepening the empowerment of AI digital tools etc. The scale effect will also be leveraged to optimise the procurement strategy and improve cost-competitiveness.

Quoting data from the China Association of Automobile Manufacturers, where total sales were a little over 31 million units in 2024, SAIC’s annual report states that the recovery pace of the domestic market was relatively lagging behind with sales 2.41 million vehicles lower than the peak in 2017.

“Against the backdrop of intensified intra-industry competition in the domestic auto market and increased external pressure from international trade protection, the competitive landscape of China’s auto industry was undergoing profound changes,” it adds.

In 2024, the number of vehicles traded in for new ones across the country exceeded 6.8 million, an increase of 2.4 million. The penetration of new energy vehicles accelerated to reach over 40 per cent, an increase of nearly 10 per cent over the previous year, with the growth rate of plug-in hybrid vehicles exceeding 80 per cent, becoming a new driving force behind the growth of new energy vehicles. The sales growth of new energy vehicles in smaller cities was significantly faster too.

Join the community of 2M+ industry professionals.

Subscribe to Newsletter to get latest insights & analysis in your inbox.

All about ETAuto industry right on your smartphone!