"The MPV God Car" is back

Author | Chai Xuchen

Editor | Zhou Zhiyu

The huge changes in the automotive market have embroiled joint venture car companies. Buick's flagship GL8 is resisting the pressure and is determined to carve out a path of counterattack for SAIC-GM.

After experiencing a downturn in the first half of the year, this old American car company finally sees the light. On September 23rd, the 2 millionth Buick GL8 rolled off the production line. This is the flagship product of the Buick brand. Four months ago, after the launch of the hybrid PHEV version, the entire GL8 family contributed 40% of Buick's sales in August, further boosting SAIC-GM's sales scale and reversing the decline.

"GL8 PHEV is still in short supply. Currently, there are over 30,000 orders in hand." At the communication meeting after the offline ceremony, Xue Haitao, the new deputy general manager of SAIC-GM, could not hide his excitement.

In Xue Haitao's view, the first shot of counterattack fired by GL8 is crucial. The successful reshaping of this major product directly boosted the morale of the team and dealers. Internally at SAIC-GM, it is expected that sales will maintain a scale of 600,000 units this year.

However, SAIC-GM is far from holding a grand celebration. Looking back at the peak of million-unit sales in previous years, this "American giant ship" still needs a revolutionary change, and the personnel changes over a month ago have laid the foundation for the counterattack.

On August 9th, the company's senior management underwent a major reshuffle, with Lu Xiao, former executive deputy general manager of Pan Asia Automotive Technology Center, appointed as the general manager of SAIC-GM; Xue Haitao, former deputy general manager of SAIC-GM Wuling, was appointed as the deputy general manager of SAIC-GM, in charge of marketing.

This communication meeting also marked the first public appearance of the "new team." Under the main theme of "sounding the horn for a comprehensive counterattack by 2025," they candidly reviewed and did not shy away from the shortcomings.

Lu Xiao reflected that in the early years, the "refrigerator, color TV, and sofa" concept was actually applied to GL8, but it was later neglected, which was a misjudgment of user needs. The hybrid technology that is now prevalent in the market was actually used on Chevrolet fourteen years ago. A series of advanced technologies from Pan Asia have gradually diluted their competitiveness over a four-year product development cycle.

It can be said that SAIC-GM "woke up early and caught up late." Lu Xiao frankly stated that the new management team is eager.

However, they are well aware of the strong capabilities of SAIC-GM and its subsidiary Pan Asia Technology Center. Lu Xiao revealed to Wall Street News that the engineering heads of LeDo and Jiyue both come from Pan Asia; at the same time, the balance of power is also shifting towards them.

Xue Haitao pointed out that the number of young car buyers under 35 in China has decreased from 10.6 million to around 8 million in three years, while the middle-aged group aged 35-55 is increasing. These consumer groups still have emotions towards joint venture brands and brand premiums still exist.

But under the encirclement of new forces, the window of opportunity left for SAIC-GM will not be too long.

The transformation is about to begin. Lu Xiao revealed that shortly after taking the helm, he defined four battles, with two focusing on adjusting marketing channels, and the other two on GL8 PHEV and Cadillac XT5 products According to reports, SAIC-GM's product development cycle has been shortened to 18 months, and the Pan-Asia R&D team has been fully localized. The success of the GL8 PHEV is attributed to this strategy. Next year, the GL8's "OMPV" concept car will aim to capture the ambition of "daddy cars" users.

Meanwhile, under marketing and channel reforms, Cadillac's new XT5 has also locked in explosive sales attributes. Xue Haitao stated that the large volume of orders for the vehicle has surged, with the company even specially chartering air freight of one to two million yuan from Germany to purchase raw materials, and deploying a supply guarantee team to local suppliers.

From Buick GL8 to Cadillac XT5, SAIC-GM has kicked off a comprehensive counterattack. Next, its three major brands (Cadillac, Buick, Chevrolet) will launch ten new models from hybrid to electric.

With the ace technology in hand, "Chief Technology Officer" Lu Xiao, and Xue Haitao, who excels in marketing, will jointly raise the flag of SAIC-GM's major counterattack. They also aim to break new ground for joint venture car companies and boost confidence.

"We were already at the table, and we have more reason to sound the horn next year and reclaim our rightful position at the table," Lu Xiao said.

The following is a transcript of the conversation between Wall Street News and SAIC-GM's General Manager Lu Xiao and Deputy General Manager Xue Haitao (edited):

Question: Does GL8 have a plan to become a major product? Because GL8 is currently the biggest source of profit for SAIC-GM.

Xue Haitao: We need a major product to boost confidence in both the channels and internally.

In the past few months, our MPV may have seemed to have decreased in overall volume, but after the release of the PHEV version, it returned to the track. In August, our weekly volume in the MPV was basically the highest. The latest week or two, the market share has reached close to 17%, 16.8%. Because the production capacity is still not enough, as the production capacity gradually meets demand, I believe its market share should increase.

In October, Buick will introduce new models at the Century Conference, and in November, an upgrade of the GL8 fuel vehicle will be launched. In March next year, the classic PHEV will also be launched. Basically, the overall layout of the GL8 is very comprehensive, and by October next year, there will be a brand new GL8, including the Organic MPV (OMPV) seen today.

Question: What is the strategic significance of launching the OMPV concept car for GL8?

Lu Xiao: OMPV is a product that I personally worked on. We have already done six generations of GL8, so we wanted to pursue something different. Internally, we thought that this time the GL8 should not only focus on business, but must also attract more family users.

In recent years, with more individual families, many small and medium-sized business owners have their own business negotiation needs. The MPV is no longer just a commercial vehicle. We hope this car embodies an organic lifestyle concept, attracting more users who need a vehicle for both family and business use. We do not shy away from the ambition to capture SUV "daddy car" users.

Question: Will Buick and SAIC-GM continue to increase the proportion of MPVs in the future?

Lu Xiao: We will definitely consolidate the MPV's dominant position. In the past two to three months, GL8's market share in the MPV track has rapidly returned to first place, and the future goal is for the market share to be no less than 20% GL8 has accumulated deep insights during its 25-year evolution, and many users continue to provide us with feedback. I believe that when other companies are developing MPVs, they will definitely take back GL8 for disassembly and comparison. Today, we have announced the Golden Line 8 (MPV) guidelines, sharing these standards with all peers, in the hope of expanding the MPV market base.

Currently, everyone is focusing on products related to family mobile space, but in fact, large SUVs are not the only choice. With our high-end, family-oriented MPV, we can capture a portion of that market share. In the future, the capacity of the MPV market will not be just 1 million as it is now, but possibly 1.5 million to 2 million vehicles.

However, next year, the clarion call we sound for counterattack will not only involve MPVs. Plug-in hybrid products will also be launched in the mainstream sedan and SUV markets. We will face competition head-on and play our cards at the fastest pace.

Question: Will we consider continuing to tap into incremental demand from the younger consumer group?

Xue Haitao: The Chairman and President of SAIC Group brought me a set of data from the planning department, which shocked me.

From 2020 to 2023, the number of car buyers under the age of 35 decreased from 10.6 million to 7.8 million; on the contrary, the number of buyers aged 35-55 started to increase, especially in the price range above 300,000 RMB. The proportion of middle-aged uncles, "aunties," and even "grandpas" over 55 years old buying cars has started to rise.

After seeing this data, I actually think SAIC-GM has opportunities because the upcoming Buick and Cadillac models are basically positioned in the 200,000 to 600,000 RMB range. We need to gradually meet the needs of this group of people, but at the same time, there will also be a trend towards younger consumers, such as Cadillac's Aogei product, which is mostly owned by female drivers.

Question: Does this mean that SAIC-GM will focus more on products priced above 200,000 RMB in the future?

Lu Xiao: This year and next year, we have planned the launch of 10 products. Taking the Buick brand as an example, we have products in all price ranges from 100,000 to 350,000 RMB. Especially in the price segments that joint ventures should occupy, we have new products.

We are already at the table, and we have more reasons to sound the clarion call next year and reclaim our rightful position at the table. Therefore, from a product perspective, we will cater to all customer groups in various price ranges.

Question: SAIC-GM is experiencing fluctuations in sales this year. What exactly is the current situation the company is facing?

Lu Xiao: I have been thinking about why we have encountered so many cases of defeat before. In fact, Pan Asia was established at the same time as SAIC-GM 27 years ago and has accumulated a wealth of data and experience. Pan Asia has always been the "Whampoa Military Academy" of the domestic design industry, with the chief engineers of Leopaard and Jieyue all coming from Pan Asia.

On one hand, we planned too early, but the development speed was not urgent; we believed that pure electric was the ultimate solution, so we did not rush to develop plug-in hybrids or extended-range models, which ultimately backfired. Additionally, product definition is also very important. Our previous design aimed for a younger audience, but we did not target the right demographic.

Previously, Cadillac used a 9K retina screen, while Buick used a 6K screen; and we should have had the 8155 chip designated in 2018. However, the value of these good features was not perceived by consumers Because the original development process was four years, but in such a fast-paced era, even the best things will be wasted. This is also where our intelligentization failed.

As a result, there were various deviations, and there were no marketing and communication experts to help us explain. These have led to a somewhat passive situation for us today.

Question: What are the strategic deployments for SAIC-GM to launch a counterattack in 2025?

Xue Haitao: In the new energy era, we may have been a bit slow to react, but it doesn't mean we lack strength. I have been at SAIC-GM for a little over a month, and the biggest impression I have is that SAIC-GM's pan-Asia technological strength is very strong. I believe that we have a solid foundation in terms of products, brands, and user base.

The demand for GL8 PHEV has been exceeding supply so far, with current orders exceeding 30,000 units. By next year, including the new energy MPV concept car OMPV and other new products, our next steps should be comprehensive electrification and full intelligence.

Secondly, I have a good partnership with Lu Xiao. We are steadily improving our sales system and channels step by step, gradually enhancing the user experience. Even in the era of social media communication, I will lead the team forward step by step.

Lu Xiao: In our second week on the job, we decided internally to launch four campaigns, including GL8 and the all-new Cadillac XT5. It mainly involves marketing, channels, and internal system adjustments and optimizations.

As you can see, our retail sales in August exceeded 50,000 units, and this year's expected retail sales will still exceed 600,000. The group says we are still a bit slow, but indeed we have only been in office for a little over a month. We may need to first sort things out at home. Both shareholders have allowed us to loosen up, travel light, and set off again. But our new management team is all geared up.

From this year to next year, all our products will be fully electrified. Buick will release all products next year, from plug-in hybrids to extended-range to pure electric, everything that should be there will be.

Question: In the next few years, how big will the entire market share of joint venture brands be in the Chinese market? Will SAIC Volkswagen continue to operate three brands concurrently in the future?

Xue Haitao: Currently, our market share is at a low point. Internally, from GL8 to Cadillac's CT5, XT5, including subsequent new products, are all being comprehensively reviewed; at the level of Chevrolet, because our PHEVs are all going to supply GL8 now, the production capacity allocated to Chevrolet's Trailblazer Plus is insufficient. The Chevrolet Minister keeps telling me every day, can you give me a little more. In fact, currently, all three brands are moving forward.

Question: It is believed by the public that SAIC-GM lacks hybrid and intelligence. Will there be targeted improvements for these two areas next year?

Lu Xiao: In fact, all the gasoline vehicle products we launched last year are intelligent products.

Televisions, refrigerators, sofas were the first things we used. When I was an engineer, I installed these things on the GL8 first; the electric rear seats of the Buick Regal were available as early as 2009. But later, we scrapped these things ourselves because we thought they might not be what customers really wanted.

Extended-range technology was first used on Chevrolet in 2010. Later, General Motors proposed the "Three Zero Strategy," including zero emissions, and we were embarrassed to put the engine back. But seeing customers vote with their feet, we still honestly listen to customers Now the internal development has been in accordance with 18 months, the GL8 PHEV is our rapid response to the market, taking out several weapons from our arsenal, such as ultra-fast charging, 800 volts, all the technologies you can think of, we actually have. We will learn faster, develop faster, and all these technologies will be available next year.

Question: In addition to accelerating new product launches, how can we increase brand and product visibility?

Lu Xiao: We released so many products last year, but it seems like there has been "indigestion". From the beginning of this year to August, our inventory has exceeded 140,000. A core issue is that we haven't effectively promoted and explained these products.

Previously, two new forces representatives were discussing hood protection issues in the middle of the night. At that time, we thought it was too trivial and did not participate in the discussion, nor did we use these topics to help with product and technology diversion. But times have changed, and we missed the opportunity for publicity. So, two years ago, the MPV Encyclopedia team started talking about more scenarios at the Buick Century launch event.

Xue Haitao: Originally, when we planned our products, we would consider MPVs, SUVs, sedans, but now looking at it, in the product definition process, we actually also consider scenarios, just like Li Xiang mentioned the concept of a "dad car", no one had mentioned this concept before.

In addition, the reasons our previous products were not successful include channels and marketing.

For example, the all-new Cadillac XT5 was originally scheduled to be launched at the Chengdu Auto Show in August. I said the preparation was not enough, so I urgently postponed the launch to the end of September. During this process, the concept of a fixed price for luxury cars was proposed. Because we had often heard early on that after SAIC-GM's new products were launched, prices would drop within a few months, and everyone would wait and not buy. I said we cannot let users be "leeks", so I communicated with internal teams and dealers for a long time.

The final effect was very good, with continuous orders on hand now, with 232 units sold in a single day yesterday, and the sales of the luxury and platinum models accounting for 80%. To be honest, we are afraid that once it is released on the 28th, there will be another surge, and the group keeps telling me to increase production capacity.

We are already worried about our production. Because some materials for the high-end models of the XT5 need to be purchased from Germany, Lu Xiao approved tens of millions of air freight fees in the past two days, and we also sent a team to Germany to discuss with the supply chain to increase production capacity.

From this incident, it can be seen that after considering the overall marketing, product, and dealer channel sales policies, there are still great opportunities. The confidence of the entire dealer network has also been boosted.

Question: Besides products and marketing, what other urgent issues need to be addressed?

Xue Haitao: The first is the health of the channels. I have consolidated channel management from the original brand business unit to the network development department. This is the most basic thing in the marketing process, which is how to provide dealers with a fair and just competitive environment, without price reductions and internal consumption.

The second is the management of production, sales, and inventory. From the needs of dealers to our internal production and then to indicators, how can we deliver cars to the end according to the variety needed by each dealer. The overall inventory of dealers is not too high now, but there is still pressure. If it is not done perfectly, it will cause a lot of inventory waste, giving colors and configurations that are not needed locally to the end, and if they cannot be sold, money will have to be spent on promotions Therefore, driving the entire production chain, connecting the demand of procurement, production, manufacturing, and dealers, from end consumers to dealers to headquarters, can save tens of billions of costs in a year. We still have some burdens now, not so fast, but in the fourth quarter, we will take some measures to allow the company to go into battle lightly by January next year.

Question: What indicators should be used to measure SAIC-GM next year?

Lu Xiao: I think first of all, the operating business needs to return to normal. What everyone saw in the past few months is not the real SAIC-GM. The first thing to measure is that all wholesale volumes need to return to normal. Most importantly, we still need to focus on operating profit, hoping to deliver performance next year that satisfies the group.

Xue Haitao: This needs to be done step by step. Previously, SAIC-GM's marketing was divided into many departments, but now media, marketing, advertising, public relations, etc., are all working in one team. Next, each core product will have a project leader to coordinate market strategy, communication strategy, public relations strategy, advertising strategy, including regional strategies, and they will be responsible for sales.

At this level, the joint operations team for GL8 has been established, and next, the teams for Buick Enclave, Cadillac XT5, and CT5 have also started. I think breaking through internal barriers to implement project-based marketing is a mature approach and should yield good results.

From the current perspective, our team is capable of winning battles. So far, we have seen some successes and also hope to achieve more victories in the future