Sales have declined for two consecutive years, and SAIC Volkswagen’s marketing structure reform may optimize the structure of mid- and low-end models

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According to a report by Caijing Automobile on September 26, SAIC Group has carried out an important reform of the marketing structure of SAIC Volkswagen Sales Co., Ltd. (hereinafter referred to as SAIC Volkswagen Sales Company).

In March this year , the Volkswagen brand under the SAIC Volkswagen Sales Company established three new model groups: SVI, SVH and SVV. The main responsibilities of the previous sales and marketing departments have been moved to the three newly established model groups. A person familiar with SAIC Volkswagen told Jiemian News that this structural change has indeed occurred internally, from the previous division according to functional departments to the division around products.

“The main reason is that the user is the center, and the structure adjustment is also to better have different marketing strategies for different products, and to be closer to users and market needs.”

According to information on the official website, SAIC Volkswagen currently produces and sells three brands: Volkswagen, Audi and Skoda. From the sales data, the Volkswagen brand plays a pivotal role. According to the data from the Passenger Association from January to August, the Volkswagen brand accounts for nearly 96% of SAIC Volkswagen’s overall sales. . This means that the reform touches the core department of SAIC Volkswagen Sales.

According to reports, SVI, SVH and SVV are responsible for the sales of ID. series electric vehicles (I), high-end models (High) and entry and mainstream products (Volume, English: volume) models respectively.

The structural adjustment reflects SAIC Volkswagen’s shift to a more refined marketing strategy. Zeng Zhiling, general manager of LMC Automotive Market Consulting Co., Ltd., told Jiemian News: “SAIC Volkswagen has a complete lineup of models. After splitting into three model groups, the sales and marketing teams will be more focused and more accurate to break through the market segments of different models. .”

Regarding the SVV that undertakes the volume model, an insider of SAIC Volkswagen said in an interview that because the three model groups are equal departments, the SVV has not gained more inclination, and the sales pressure on the shoulders is greater.

The large number of entry-level and mainstream models will intensify its internal competition to a certain extent, which may promote the optimization of the model structure of SAIC Volkswagen. Jiemian News checked the models sold under the Volkswagen brand of SAIC Volkswagen and found that there are many models priced below 200,000 yuan, accounting for nearly 40% of the Volkswagen brand.

The division of SVI and SVH model groups also highlights SAIC Volkswagen’s strategy of transforming into high-end brands and electrification. In the face of the global chip supply shortage challenge, ensuring the supply of high-end models and high-margin products can better resist supply chain fluctuations and improve corporate profitability. In addition, SAIC Volkswagen already owns ID.4 X, ID.6X and ID.3, and the sales of ID. series products exceeded 10,000 units in July.

Facing the accelerated penetration of new energy vehicles, Yang Siyao, executive director of SAIC Volkswagen’s brand marketing business, said in an interview with the media, “SAIC Volkswagen takes both the new energy and fuel vehicle markets. It will not only be new energy vehicles and give up fuel. The car market.” At present, when most new energy vehicle brands are losing money, structural adjustment is also a measure to stabilize profits. According to SAIC’s financial report, SAIC Volkswagen contributed a net profit of 2.8 billion yuan in the first half of 2022, accounting for 40% of the total.

In addition, changes in marketing structure may also have pressure from downward sales. Zhang Xiang, a specially-appointed expert from China Bolian Think Tank, told Jiemian News: “The decline in sales of SAIC Volkswagen in recent years shows to a certain extent that the original marketing structure is not applicable.”

SAIC Volkswagen has been in China for more than 30 years and is one of the joint ventures with the largest passenger car sales in the Chinese market, but sales have declined in the past three years. According to SAIC’s financial report, SAIC Volkswagen’s sales from 2019 to 2021 were 2,001,800, 1,505,500 and 1,242,000, respectively, with double-digit declines year-on-year for two consecutive years.

Especially in the first half of the year, affected by the epidemic in Shanghai, SAIC-Volkswagen’s supply chain was severely impacted, and its sales fell behind FAW-Volkswagen. According to data from the China Passenger Car Association from January to August, the retail sales of FAW-Volkswagen and SAIC-Volkswagen were 1.18 million and 770,000 respectively.