In this article, we introduce SAIC Motor (Chinese: 上海汽车集团) (SHA: 600104), China's number one automaker in terms of vehicle sales for over 15 years.
This article provides a timeline of SAIC's formation and development over the past 70 years, a breakdown of the company's six operating segments, as well as an overview of SAIC's automobile brand portfolio. A financial analysis and discussion of management's future strategies will be in Part 2.
This article is part of our China auto industry series, which includes:
An Overview of China's Auto Industry (forthcoming)
Value-For-Money Auto Companies: Wuling Motors
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1950s: The Origin of SAIC
What is now SAIC Motor traces its roots back to a number of bus repair and manufacturing factories established by the Shanghai local government in 1951, two years after the founding of the People's Republic of China. Four years later, a number of such factories were consolidated to become Shanghai Internal Combustion Engine Components Company (上海市内燃机配件制造公司). The Company focused on manufacturing buses and tractors before expanding its scope to include sedan cars starting in 1958, through the production of Shanghai's first sedan car under the Phoenix (凤凰) brand. By 1975, about 5,000 Phoenix cars were produced each year, making Shanghai one of the largest car manufacturing bases in China.
Following China's economic reforms and opening-up during the late 1970s and early 1980s, the Shanghai Tractor Company (上海市拖拉机汽车工业公司), another state-owned auto company in Shanghai, entered into a joint venture with Volkswagen Group in 1985 to produce Volkswagen branded cars in China. Ten years later in 1995, the Shanghai Internal Combustion Engine Components Company, the Shanghai Tractor Company, and other auto companies owned by the Shanghai government were consolidated to become Shanghai Automotive Industry Corporation (SAIC) Group (上汽集团).
SAIC Group went public on the Shanghai Stock Exchange (SHA: 600104) in 1997.
1997-2011: Acquisitions and Joint Ventures
In 1997, SAIC Group established a joint venture with General Motors (GM) to produce GM branded cars in China.
In 2000, SAIC and Volvo Group entered into a joint venture to produce buses under the Shanghai Sunwin Bus Corporation (申沃客车) brand.
In 2002, SAIC and GM formed a three-way joint venture with Wuling Motors (五菱汽车), a Chinese auto manufacturer that primarily focuses on producing cheap commercial vehicles (e.g. mini vans, trucks, and other vehicles used by contractors), to manufacture and sell Wuling branded cars.
In 2006, SAIC became China's best-selling automaker in terms of number of vehicles sold for the first time.
Also in 2006, SAIC formed a joint venture with Chongqing Hongyan (重庆红岩) (a heavy vehicle manufacturer owned by the Chongqing city government) and European commercial vehicle manufacturer IVECO (a subsidiary of Fiat Group) to produce commercial trucks under the Hongyan brand. The same year, SAIC launched its first in-house brand, Roewe (荣威), based on technology purchased from the now defunct British automaker MG Rover Group. MG Rover's assets and the MG marque (i.e. brand) were absorbed by Chinese state-owned company Nanjing Automobile Group (南京汽车集团) during the year, before Nanjing Automobile was ultimately acquired by SAIC in 2007. Henceforth, MG Motor (名爵) became SAIC's second in-house brand.
In 2011, SAIC launched its third in-house brand, Maxus (上汽大通), named after the LDV Maxus model of the now defunct British van manufacturer LDV Group, whose intellectual property SAIC acquired in 2010. The same year, SAIC Group was renamed to SAIC Motor Corporation (上海汽车集团, still abbreviated as 上汽集团).
2012-Present: The Era of Electric Vehicles
In 2012, SAIC entered the electric vehicle (EV) market with the launch of the Roewe E50 subcompact hatchback. Over the following years, the Group released various EV models under both in-house and joint venture brands, although none particularly gained traction except for the Wuling Hongguang Mini EV (五菱宏光 Mini EV), a value-for-money, subcompact Wuling branded car launched in 2020 that has since become the bestselling EV in China.
In December 2020, SAIC formed a joint venture with Alibaba Group and Chinese high-tech park operator Zhangjiang Hi-Tech Park (张江高科技园区) to launch mid-high end electric vehicle brand IM Motors (智己汽车).
In 2021, SAIC founded premium "smart" electric vehicle brand Rising Auto (previously known as R Auto)(飞凡汽车) to compete with the likes of start-ups NIO, Li Auto, and XPeng.
Neither IM Motors nor Rising Auto has enjoyed much popularity among consumers.
SAIC comprises of six business segments.
#1: Vehicle Segment
The vehicle segment involves the research and development, production, and sales of passenger and commercial vehicles. This segment includes both SAIC's own brands (i.e. Roewe, MG, Maxus, and Rising Auto) as well as the company's joint ventures with other foreign and domestic automakers (e.g. SAIC-Volkswagen, SAIC-GM, SAIC-GM-Wuling, and IM Motors).
An overview of SAIC's automobile brand portfolio is in the next section.
#2: Auto Parts and Components Segment
This segment primarily involves the research and development, production, and sales of power drive systems, chassis, interior and exterior trims, and the core components and smart product systems of new energy vehicles such as batteries, electric drives, and electronic control.
#3: Mobility Services Segment
The mobility services segment refers to SAIC's logistics and transportation initiatives operated by the company's automotive logistics subsidiary SAIC AnJi Logistics (上汽安吉物流), the ride-hailing services offered by its Xiangdao Mobility (享道出行) platform, as well as additional new services including charging, photovoltaic power generation, hazardous waste disposal, and power battery recycling.
#4: Finance Segment
To complement its other businesses, SAIC has a finance segment spanning the scope of automotive finance, corporate finance, insurance sales, and investments. As part of the automotive finance business, SAIC provides financing services to dealers and end consumers, while the corporate finance business includes depository, loans, settlement, foreign exchange, and other agency services that SAIC provides to the Group's member entities (e.g. associates and subsidiaries). Insurance sales refer to the intermediary provision of auto insurance for vehicle buyers, while SAIC's investments business focuses on equity investments under an umbrella theme of "electricity, intelligent networking, sharing, and internationalization". As of December 2021, the value of SAIC's investment assets under management exceeds RMB500 billion.
#5: Overseas Business Segment
The overseas business segment refers to SAIC's overseas automobile industry chain which integrates research and development, manufacturing, finance, and logistics. As of December 2021, this industry chain comprises of three overseas vehicle manufacturing bases, 20 regional marketing service centres outside China, and more than 1,000 overseas marketing and service outlets.
#6: Innovative Technology Segment
As part of this segment, SAIC is engaged in the research and development of core technologies in new energy, software, chips, artificial intelligence, big data, Internet of Things, and other emerging technology fields.
Automobile Brand Portfolio
In this section, we provide an overview of SAIC's automobile brand portfolio.
SAIC is structured as a group with the production and selling of different brands conducted through various business entities, as shown below.
Note: this diagram is taken from the SAIC official website. However, the last "G" in "SGMG" is a typo and should instead be "W" as per the SGMW joint venture's official website.
We walk through each of the individual entities below.
SAIC Motor Passenger Vehicle (SMPV)
SMPV is a wholly-owned subsidiary of SAIC that produces cars for in-house brands Roewe (荣威), MG (名爵), and Rising Auto (非凡汽车), as well as for the Group's IM Motors (智己汽车) joint venture with Alibaba and Zhangjiang Hi-Tech Park (张江高科技园区).
Roewe is a low- to middle-end brand that primarily produces traditional internal combustion engine (ICE) cars but also has a small selection of EVs. There are currently 15 Roewe models on the market, with the brand's most popular cars being the middle-end Roewe Ei5 sedan and the relatively affordable, value-for-money Roewe RX5 SUV.
Similarly to Roewe, MG is a low- to middle-end brand that primarily produces traditional internal combustion engine (ICE) cars while also having a small selection of EVs. MG's bestselling cars are the value-for-money MG ZS SUV and the lower-middle end MG5 compact sedan.
Rising Auto is a premium "smart" electric vehicle brand that currently has two models on the market: the ER6 sedan and the Marvel R SUV. A third model, the flagship R7 sedan, is expected to launch next month with deliveries planned for late October.
IM Motors is a mid-high end electric vehicle brand that currently has one sedan model on the market, the L7. A second vehicle, the LS7 SUV, has been unveiled for future launch in the second half of 2022.
Shanghai Volkswagen (also known as SAIC Volkswagen)(SVW)(上汽大众汽车)
SVW is SAIC's joint-venture with Volkswagen Group that produces Volkswagen cars in China, including Volkswagen, Skoda and, more recently, Audi branded vehicles.
SAIC General Motors (SAIC-GM)(上海通用汽车)
SAIC-GM is SAIC's joint venture with General Motors (GM) that produces GM cars in China, including Cadillac, Buick, and Chevrolet branded vehicles.
SGMW is a three-way joint venture between SAIC, General Motors, and value-for-money Chinese automaker Wuling Motors to produce Wuling branded cars (see our Wuling Motors series here).
Popular Wuling models include the Wuling Hongguang (五菱宏光) van, which has become the iconic "farmer's car" in China, and the Wuling Hongguang Mini EV (五菱宏光 Mini EV), a subcompact electric sedan popular among China's lower income consumers. Since its launch in 2020, the Wuling Hongguang Mini EV has become China's bestselling electric vehicle in terms of number of cars sold.
In 2010, SGMW founded its own brand, Baojun (宝骏). Although both Wuling and Baojun cars target lower tier city (see here) consumers who are relatively more price sensitive, Wuling generally focuses on utility-oriented cars such as vans and pick-up trucks (as shown above), while Baojun focuses more on lifestyle, everyday use cars such as city sedans and urban SUVs.
SAIC Motor Commercial Vehicle (SMCV)
SMCV is SAIC's subsidiary responsible for the manufacturing of commercial vehicles under the Maxus (上汽大通) brand. The Maxus brand comprises of multi-purpose vehicles, pick-up trucks, light commercial vehicles, and specific-purpose commercial vehicles such as ambulances, police vans, and school buses.
Previously, SAIC also produced Korean automaker SsangYong's Istana (伊斯坦纳) van under the Maxus marque in China after becoming SsangYong's controlling stakeholder in 2004. However, no more Istana vans have been produced since 2014.
Nanjing Automobile Group Corporation (NAC)(南京汽车)
Following the Group's acquisition of Nanjing Automobile in 2007, SAIC produces commercial vehicles under NAC's in-house developed light truck brand Yuejin (跃进), as well as under the IVECO brand after inheriting NAC's joint venture (named NAVECO) with European commercial vehicle manufacturer IVECO (a subsidiary of Fiat Group).
Shanghai Sunwin Bus Corporation (Sunwin)(申沃客车)
Sunwin represents SAIC's former joint venture with Volvo Group which utilizes Volvo technology to produce Sunwin branded buses. The Sunwin entity is currently wholly-owned by SAIC.
SIH is a three-way joint venture between SAIC, heavy vehicle manufacturer Chongqing Hongyan (重庆红岩), and European commercial vehicle manufacturer IVECO to produce commercial trucks and other heavy vehicles mostly under the Hongyan brand.
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