I believe everyone doesn’t like cars. As a symbol of status and wealth, many people buy luxury cars at large prices.
Not only to facilitate your travel, but also to show your wealth.
But did you know that China’s largest automobile group is now facing a huge business crisis and will soon be unable to sell its products?
Pictures from the Internet
The latest business report for the third quarter of 2024 has appeared, as China’s largest automobile group.
SAIC Group’s net profit unexpectedly plummeted 93.53%, sales also plummeted, and its performance is also facing a cold winter.
What is the reason why the group’s cars cannot be sold? Is it an internal management problem within the group or the influence of external factors?
SAIC
SAIC sales performance dismal
To say that the rise of SAIC did not happen overnight, it took many years of accumulation and exploration.
In 2006, relying on the opportunities of the times and its own efforts, it achieved good results of selling 1.224 million cars, which was an amazing achievement at that time.
Pictures from the Internet
Even FAW Group cannot compare with it. Starting from this year, SAIC Group became the number one in the automobile industry.
As the largest automobile group in China, it produces and sells countless automobiles every year, providing a large amount of economic income and convenient services to the Chinese people.
SAIC
I thought that SAIC Group would always maintain a good development momentum.
Who would have thought that in 2024, the situation would suddenly change. SAIC Group could no longer sell cars, and its profits in the third quarter plummeted to an unprecedented level.
Pictures from the Internet
According to official data, SAIC Group’s net profit in the first two quarters of 2024 is relatively considerable.
The net profit in the first quarter reached 2.714 billion yuan, and the net profit in the second quarter reached 3.914 billion yuan. It was thought that the net profit in the third quarter would continue to increase.
Pictures from the Internet
Who knew that when the data was released, everyone would be dumbfounded.
The net profit in the third quarter was only a pitiful 280 million, not even a fraction of the previous one. Compared with the net profit in the previous two quarters, it dropped 93.53%.
Pictures from the Internet
Such achievements should not occur to SAIC, but facts show that all this is true.
Faced with such dismal sales performance, many people are puzzled.
What are the factors behind all this? Is it a decision-making error by upper-level leaders or is there a problem with product quality?
Pictures from the Internet
The reason behind such a huge gap
The reason why SAIC is facing the problem of being unable to sell cars today is related to many factors.
The first factor is the loss of its original competitiveness. More than a decade ago, internal combustion vehicles were the best-selling and most popular type of vehicle in the automotive industry.
SAIC
However, with the development of the times, fuel vehicles have begun to slowly withdraw from the automobile market because of the country’s advocacy of low-carbon travel.
Coupled with the fact that the exhaust gas and waste oil emitted by fuel vehicles pollute the environment too much, many automobile companies have begun to increase technological research into new energy vehicles.
Pictures from the Internet
New energy vehicles include trams, vehicles that use solar power, etc.
There is no need to burn any fossil energy, and it will not produce any waste that pollutes the environment. It is clean and convenient. Who wouldn’t like a car like this?
SAIC
But SAIC seems to have failed to seize the opportunity for automobile transformation and upgrading.
Most of the cars sold by their company are fuel-powered.
Nowadays, the market for fuel vehicles has been severely compressed by new energy vehicles, which will inevitably lead to a decline in SAIC’s net profits.
Pictures from the Internet
Changes in the general environment will also have a certain impact, and the general environment here does not only refer to the domestic environment.
It also specifically refers to overseas business. Originally, part of SAIC Motor’s automotive business was opened to international markets such as the European and American markets. In previous years, a considerable part of its quarterly net profit came from overseas business.
Pictures from the Internet
Even though SAIC Group later carried out transformation for new energy vehicles, it faced trade barrier policies established by foreign countries to protect its own automobile companies.
We are helpless, especially this year when the EU adopted a tariff policy on China’s electric vehicles, which made it more difficult for SAIC to export cars, causing overseas earnings to continue to be squeezed.
Pictures from the Internet
Facing internal and external attacks, SAIC Group is also trying to survive in the cracks.
In fact, SAIC’s bleak sales volume is no longer a matter of this month. As early as August, SAIC’s President Jia Jianxu publicly expressed his concerns about performance at a conference.
Pictures from the Internet
He believes that the domestic automobile industry has seen serious involution, not only in terms of car quality, but also in terms of car prices.
In order to attract more consumers to buy and to defeat their competitors, many automobile companies choose to engage in price wars while violating market rules.
SAIC
Once a certain industry starts to engage in price wars and forms a trend, the industry will soon be on the verge of collapse.
Price wars are inconsistent with market standards and will not only compress your own profit margins, but also muddy the waters of the entire industry.
SAIC
Regarding SAIC’s current dismal sales performance, if correct and timely measures are not taken, future sales and net profits will only be lower than now.
Now is the development trend of new energy vehicles, and whoever can make good use of this trend can skyrocket.
Pictures from the Internet
It is hoped that SAIC Group can speed up the pace of independent research and development.
Don’t always rely on external financing and cooperation. Relying on foreign technology will only put SAIC at a disadvantage. The only way is to actively adjust strategies and accelerate the pace of independent research and development.
Pictures from the Internet
After all the preparations have been made, the next step is to look at the net profit results in the fourth quarter of 2024.
This achievement is crucial to SAIC. If successful, the company will continue to develop sustainably in the future.
If it fails, the company may really face the risk of having its capital chain broken and its car sales channels suffering heavy losses. I believe no one wants to see such a situation.
Pictures from the Internet
All in all, China’s largest automobile group has serious problems with its sales performance, and it seems that it really won’t be able to sell its products.
Just the net profit in the third quarter of 2024 dropped by 93.53%, which is enough to show that fuel vehicles will no longer occupy the mainstream position in the future automobile industry.
Pictures from the Internet
The development of new energy vehicles is the most critical. If SAIC Group can change its focus in time and change its business scope, it will not be too late.
If it remains stubborn and delays opportunities, it is uncertain whether it can still assume the title of China’s largest automobile group in the future. It may be squeezed out by its peers and slowly withdraw from the market. It is not yet known.
Pictures from the Internet
Reference information sources
Oriental Fortune Network – Net profit plummeted 93.53% in the third quarter: SAIC Group’s transformation dilemma
Poster News – Massive Finance | Faced with “internal pressure and external pressure”, can SAIC Group maintain its position as the domestic sales leader for 18 years?
Enterprise Observer – The crown of “China’s largest automobile group” is unstable, and SAIC has launched a conspiracy to retain its position.
