Virus-proof wheels on a roll

As the global auto industry's wheels came off due to the impact of COVID-19, one Chinese company－SAIC Motor Corp Ltd－bucked the worldwide downtrend and zoomed ahead with impressive performance.

China's largest A-share listed automaker, SAIC Motor not only continued its overseas expansion amid the pandemic but posted a 17.3 percent growth in overseas sales of its own brand vehicles in the first six months this year.

"Our international team did not take a single day of break even when the pandemic was most severe in overseas markets. Our communications at work stayed regular as before," said Yu De, managing director of SAIC Motor's international business department.

The company sold 132,000 vehicles in overseas markets in the first half, accounting for 34 percent of overseas sales of Chinese automakers, and keeping its leading position in China's auto exports.

Up to 60 percent of SAIC Motor's overseas sales were contributed by its own brands, whose sales surged more than 17 percent to reach 79,000 units. Its MG brand was the bestseller among China's exported cars.

Fang Yinliang, global partner and vice-president for China with consultancy Roland Berger, said Chinese passenger vehicle sales will fall by about 10 percent this year due to the contagion. But, they will still outperform sales in US and Europe markets.

SAIC Motor's vehicle sales turned positive in June, and its quarter-on-quarter sales doubled in the second quarter, confirming the uptrend in the company's performance and suggesting that sustained and consistent efforts will pay off sooner or later.

SAIC Motor has spent years before taking the first step toward global development. "There are lots of challenges and bumps, and it is too early to celebrate any achievement, but the efforts are worthwhile. Like all major industries, the Chinese automotive industry will build its presence in the global market sooner or later," said Yu.

He divides SAIC Motor's evolution over the past few decades into three phases. The first phase, he said, started from the middle of the 1980s through joint ventures. The second phase involved creation of its own brands and products around 2000. The third phase started in 2013 and is still on. Incidentally, it was in 2013 that the SAIC brand first sought to go global.

The go-global plan necessitated enhancement of its operations and management capabilities, which may now hold the company in good stead, in the context of the post-COVID phase. The rapid recovery of business in China from the COVID onslaught has helped put Chinese companies in a relatively better position for their overseas development. But they need to make breakthroughs and upgrade their products, branding, and innovative capabilities to become truly world-class, said Fang.

"SAIC Motor is one of the earliest Chinese automakers that planned overseas development, beginning with technology upgrades and strengthened research and development capability.

"In contrast to its Chinese peers that first established marketing and sales channels to export their vehicles, SAIC Motor built its own factories locally in overseas markets as the group had resolved to become part of the global automotive industrial chain."

SAIC Motor is also China's first automaker to have formulated a long-term go-global strategy. To date, the Shanghai-based company has set up three innovation R&D bases outside of China (in the United States, Israel, and the United Kingdom), three overseas production bases in Thailand, Indonesia and India, and 12 regional marketing service centers in Europe, South America, the Middle East, North Africa, Australia, New Zealand, and markets of member countries of the Association of Southeast Asian Nations.

SAIC Motor's products and services are available today in more than 60 countries and regions where more than 750 outlets constitute its global marketing and service network. Thailand, the UK, Indonesia, Chile, Australia and New Zealand, the Middle East and India are the top seven overseas markets whose annual sales volume exceeds 10,000 vehicles each.

SAIC Motor's three overseas tech R&D centers will customize products according to various local market requirements and customer feedback, Fang said.

Agreed Yu. "We have one of the most comprehensive product models among all Chinese auto manufacturers, which enables us to provide the most suitable products in accordance with the unique requirements of each market."

About 16,000 units of the locally made MG Hector have been sold in the India market. More than 12,000 orders are going to be delivered from the factory at Halol in the western Indian state of Gujarat, according to Rajeev Chaba, managing director of MG Motor India.

Back home, SAIC Motor had maintained its position as the nation's top vehicle seller overseas for four years in a row (2016-19). It sold some 350,000 vehicles abroad in 2019 alone, up 26 percent from 2018.

"SAIC Motor's recognition in the Southeast Asian market has reached the level of some Japanese automakers, while its outstanding sales in developed auto markets including the UK and Australia showed Chinese passenger carmakers are capable of competing in the mainstream market," said Fang.

The MG model's overseas sales in the first half surpassed 70,000 units, up 37 percent year-on-year. The regions that reported the most significant sales growth include the Middle East, Southeast Asia, Australia and New Zealand, and the UK.

Yu credited the stellar performance to the company's years-long efforts in exploring global markets and its ability to follow the latest trends in the automotive sector, including the gradual shift to electric, intelligent and connected vehicles, the concept of sharing economy as embraced by ride-hailing firms that are now among automakers' biggest clients, and internationalization of auto companies.

"We are confident that our MG brand will be able to reach annual global sales of more than 1 million vehicles by 2025," said Wang Xiaoqiu, president of SAIC Motor.