SAIC Undergoes Leadership Reshuffle as It Faces Sluggish Domestic Growth, EU Tariff Hikes

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China’s largest state-owned automaker by sales volume, SAIC Motor Corp. (600104.SH) (上海汽车集团股份有限公司), is undergoing a leadership reshuffle amid dual headwinds of sluggish growth at home and tariff hikes by the European Union, a key market in its overseas expansion.

Wang Xiaoqiu, 59, president of SAIC, is likely to become chairman of the Shanghai-based group, according to a Friday announcement by the municipal government on its WeChat account. Wang is expected to succeed Chen Hong, who is retiring after holding the position since 2014.

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SAIC Motor is undergoing leadership changes amid domestic growth challenges and increasing EU tariffs.
Wang Xiaoqiu, 59, will become chairman, replacing Chen Hong; Jia Jianxu, 46, will be the new president.
SAIC’s major JVs with Volkswagen and GM face profitability issues; the company’s sales dropped 8.4% domestically, and European exports declined 7.3% due to increased tariffs.

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Who’s Who

SAIC Motor Corporation Limited: SAIC Motor Corporation Limited, China's largest state-owned automaker, is facing challenges including sluggish domestic growth and EU tariff hikes. Its leadership sees Wang Xiaoqiu becoming chairman, with Jia Jianxu as the new president. SAIC's profits from joint ventures with Volkswagen AG and General Motors have declined. The company's exports dropped by 7.3% in the first five months of the year. EU tariffs on SAIC's battery-electric vehicles will rise significantly.

BYD Co. Ltd.: BYD Co. Ltd., a domestic rival of SAIC Motor, posted a remarkable 26.8% year-on-year growth in the first five months with cumulative sales reaching around 1.3 million units. The company is also targeting annual sales of 5 million units by 2025, which is close to SAIC's sales last year.

Geely Automobile Holdings Ltd.: The article mentions Geely Automobile Holdings Ltd. briefly in the context of European Union tariff hikes. Geely, along with BYD and SAIC, will face increased duties on battery-electric vehicles exported to the EU. The duties are part of an anti-subsidy investigation and will add to the existing 10% tariff, with SAIC facing the highest increase at 38.1%.

SAIC Volkswagen Automobile Co. Ltd.: SAIC Volkswagen Automobile Co. Ltd. is a joint venture between SAIC Motor Corp. and Volkswagen AG. The company's profitability has been impacted by an industry price war in China, with its profit contribution dropping to 3.1 billion yuan ($425 million) last year from 8.7 billion yuan the previous year. The joint venture has historically led domestic passenger car sales.

SAIC General Motors Co. Ltd.: SAIC General Motors Co. Ltd. is a joint venture between SAIC Motor and General Motors. The JV has been significantly impacted by the ongoing price war in China, with its profit contribution dropping to 2.5 billion yuan last year from 5.6 billion yuan the previous year. The group's profitability has been under pressure amid sluggish domestic growth and intense competition in the market for new energy vehicles.

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What Happened When

After October 2023：: European Commission's anti-subsidy investigation found that state subsidies are enabling Chinese EV makers to undercut their EU rivals.

First five months of 2024：: SAIC Motor Corp. reported an 8.4% year-on-year decline in the number of units sold to about 1.5 million.

First five months of 2024：: SAIC Motor Corp.'s exports slid by 7.3% year-on-year to about 407,000 units.

June 4, 2024：: European Commission announced to provisionally impose extra tariffs on battery-electric vehicles shipped from China, taking levies to as much as 48%.