SAIC's plan to consolidate its "large passenger vehicle sector" is taking shape.

Author | Xing Ruifang

Editor | Mao Shiyang

Original content from Auto Pixel (ID: autopix)

We have learned exclusively that SAIC International will soon merge its offices with SAIC Motor Passenger Vehicle. A team of nearly 200 individuals will relocate to Building 2 of the SAIC Motor Passenger Vehicle campus in An Yan Road, Jiading District, Shanghai.

SAIC Motor Passenger Vehicle oversees two sub-brands: Roewe and MG. In 2024, the combined sales of these two brands reached 707,000 units, with only 224,000 units sold domestically. This has resulted in a scenario where, despite belonging to SAIC Motor Passenger Vehicle, the majority of sales and overseas channels are managed by SAIC International.

The contradiction is more pronounced in the case of MG. Among the two brands, Roewe's primary sales market is domestic, whereas MG's overseas sales have long surpassed its domestic sales. In 2024, MG's global sales totaled 507,000 units, with approximately 85,000 units sold domestically. MG is the top-selling Chinese brand in Europe, contributing nearly 70% of total Chinese car exports to the continent.

The divide in demand between domestic and international markets has complicated resource coordination. MG's best-selling models overseas are compact or small cars like the MG ZS, MG3, and MG4 EV, yet the monthly sales of these three models in China are sometimes in the single digits.

A case in point is the MG4 EV. While domestic pure electric vehicles are trending towards large central control screens, AI smart cabins, and AI smart driving, the MG4 EV boasts minimal intelligent configuration. Its selling points are agile handling, practical space design, and good passability.

Consequently, the MG4 EV has consistently ranked among the top 3 pure electric vehicle sales in many European markets, but in China, the total sales of this model last month were only 8 units.

Nevertheless, MG has not abandoned the domestic market. Zhou Xing, general manager of the MG Brand Business Unit, revealed that MG will launch about 8 new models within the next two years and add 150 new stores in China in 2025.

Therefore, limited R&D resources must continue to be invested in these overseas best-sellers while also addressing the adaptability issues of new domestic models. Without robust coordination, this task will be challenging to accomplish.

The integration of domestic and overseas companies is just one part of SAIC's "large passenger vehicle sector," and the more difficult and crucial integration lies in R&D.

Momenta has already completed its merger with SAIC's Innovation R&D Institute. Subsequently, the SAIC R&D Institute will also be integrated into the large passenger vehicle sector, becoming a subordinate R&D department. This marks a significant step in SAIC's plan to integrate its five major subsidiaries into a unified "large passenger vehicle sector".

SAIC's R&D Institute has already made adjustments to numerous key positions. A month ago, Wang Conghe, with a background in SAIC-GM and formerly the executive deputy general manager of Pan Asia Technical Automotive Center, replaced Lu Yong to head the SAIC R&D Institute.

Certain functions between the SAIC R&D Institute and SAIC Motor Passenger Vehicle have begun to converge. For instance, the cost department of SAIC Motor Passenger Vehicle has been merged into the "Cost Center" established by the SAIC R&D Institute, indicating that the Institute is no longer purely a research and development organization. Currently, some reporting and approval relationships and performance standards within the SAIC R&D Institute are also gradually being adjusted.

'In the future, the R&D Institute will serve as the product R&D backend, while SAIC Motor Passenger Vehicle will handle market sales as the frontend.' A source from the SAIC R&D Institute informed us that the new organizational structure has streamlined the relationship between the R&D and sales systems.

▍Jia Jianxu, President of SAIC Motor

Streamlining and directness are indeed among SAIC's objectives in integrating passenger vehicle resources. During the "SAIC Night" on April 10, Jia Jianxu, President of SAIC Motor, revealed that in response to market challenges, SAIC has undertaken a series of structural adjustments, consolidating its core businesses of independent brands such as SAIC Motor Passenger Vehicle, SAIC International, the R&D Institute, and Momenta. Upon completion, SAIC will form a "large passenger vehicle sector" with integrated production, sales, and research, as well as coordinated domestic and international operations.

The benefit of integration is to concentrate resources and enhance efficiency. In the past, SAIC's R&D efforts were distributed across several companies, primarily the SAIC R&D Institute and Momenta. This system had to support R&D projects for Roewe, MG, and some Zhidi brands. Collaboration between these entities required spanning three to four company entities, making it difficult to form a synergistic force.

For example, Momenta is primarily responsible for software, but to support the electronic and electrical architecture, Momenta also partially involves the development of hardware such as the chassis, which should have been handled by the SAIC R&D Institute.

Furthermore, there was a lack of a consistent management layer to coordinate between the various subsidiaries. The SAIC R&D Institute, Momenta, SAIC Motor Passenger Vehicle, and SAIC International each reported to SAIC Motor, and the leadership of SAIC Motor previously only handled strategic management and rarely directly managed specific business levels, which is also the tradition of most state-owned automotive groups.

The formation of the large passenger vehicle sector aims to address all the aforementioned issues. At the business level, it breaks down departmental and company walls. At the management core level, President Jia Jianxu serves as the chairman of the Executive Management Committee of the large passenger vehicle sector and personally oversees the business, aiming to achieve "integrated management of passenger vehicles".

However, changes to the executive leadership of SAIC's large passenger vehicle sector may not be over yet. We understand that Wang Jun, the current general manager of SAIC Motor Passenger Vehicle, is nearing retirement.

Now, after multiple rounds of forceful mergers, the large passenger vehicle sector has taken shape. SAIC has completed the first step of integration, but the journey towards achieving synergy between the merged entities has just begun.

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