Author | Chai Xuchen

Editor | Zhou Zhiyu

With the classic Hornet image in the movie “Transformers,” as well as “magic cars” such as Malibu and Cruze, Chevrolet once had unlimited popularity in the Chinese car market, and was even expected to sell more than one million a year.

However, changes in China's NEV market have gradually dimmed the American brand's light. Wall Street News learned that Chevrolet's established model “Malibu” is scheduled to be discontinued in the fall of this year. In addition, the “Cruze”, another sales pillar model, is also on the verge of exiting due to continued losses.

In the vast car market, the exit of star models heralds the end of an era. Chevrolet's loneliness is also the epitome of the decline of second-tier joint venture brands in China.

A few seconds of the knockout tournament have already been ringing in my ears. For China, which is an important automotive consumer market, those star brands that once shone brightly now all need to break the game with a new attitude and mobilise all resources before they have a chance to finally stay on the table.

Withdrawal

The news that production of the two main models of the Chevrolet brand will be discontinued has brought it back into the public eye.

In early May, General Motors (GM) announced that it would discontinue production of the Chevrolet Malibu (Malibu) model in November this year, and this trend quickly spread to the country. A person close to the SAIC-GM Chevrolet brand revealed that not only will Malibu XL be discontinued domestically, but even Cavalier (Cavalier), the sales pillar, will not be spared.

These two cars are very important to Chevrolet.

Malibu has a history of 60 years. Due to its “high volume and low price,” it has become a dark horse in the Chinese mid-class car market. It was once known as the “Three Treasures of B-Class Cars” along with the Kia K5 and Hyundai Sonata.

The Cruze is the mainstay of Chevrolet's sales in China. After the 2019 generation model went on sale, this A-Class performed well in the Chinese market, and it took three months to pick up the car at a higher price. Now it's been less than 5 years since it went public, and it will be “retired.”

Behind the broken wrist, it was revealed that Chevrolet's helplessness has reached a critical point where it has relied on losses and “bleeding” for a long time to maintain its scale.

Currently, terminal discounts for the two cars are generally as high as 40,000 to 60,000 yuan, making them one of the lowest-priced options among joint venture brands in the same class. Positioned at the 200,000 yuan level, the terminal price slipped to 130,000 to 160,000; however, after the 100,000 yuan Truzer was discounted, the lowest selling price for the entry-level version fell below 60,000 yuan.

Despite the significant price advantage, the two cars still had a mediocre response in the market.

Truzer sales declined from more than 8,000 units in January to more than 2,000 units in April; the average monthly sales volume for the first four months of this year was just over 400 units.

Sales of the two main models declined, putting a lot of pressure on Chevrolet. Together, these two cars accounted for 89% of the Chevrolet brand's sales in China this year. In the first four months of this year, Chevrolet's sales volume in China was only 22,000 units, down more than 56% year on year, and sold more than 28,000 units less.

As a century-old legendary brand backed by SAIC Motor Group and GM, the Chevrolet scene is no longer popular. Since sales in China peaked at 717,000 units in 2014, Chevrolet's development in China has drawn a parabolic trend. Annual sales have dropped all the way to 169,000 units last year, which is even less than the sales volume of a single popular model during the previous peak period.

According to insiders, of SAIC-GM's three brands, Cadillac, Buick, and Chevrolet, only Chevrolet is currently at a loss. Now, when price cuts can no longer maintain a “decent” scale, Chevrolet's change is inevitable.

The fall of the once famous Chevrolet in China is inseparable from its strategy in China. After entering China in 2005, most of the products launched by Chevrolet in the next ten years were old overseas models.

Facing the peak and decline in sales in the domestic automobile market in 2017, Chevrolet began to change its strategy in the next few years and achieved global synchronization in terms of products. Even the Trailblazer, which used the same platform as Cadillac and StarMilo, which was released later, and the Star-Milo, which was built on GM's global platform, fell short of expectations.

A long period of “Nazism” laid the groundwork for the weakening of the Chevrolet brand and product strength.

transforming

It was still too late for Chevrolet to wake up in the Chinese market.

Faced with changes in the NEV industry and the firing of attacks on joint ventures by independent brands such as BYD, the cost-effective advantages that second-tier joint venture brands have painstakingly supported have completely disappeared for a while. Recently, BYD launched hybrid technology with a battery life of 2,500 kilometers, which was directly devolved to models within 100,000 yuan, and dropped a “nuclear bomb” on the entire middle- and low-end market.

The price war intensified, causing SAIC-GM's three brands to lose their original market. Cadillac, which is anchored in luxury, replaced Buick's original market position; Buick's “price for volume”, which is responsible for the middle and high-end market, directly reduced Chevrolet's already “small profit and large sales” living space.

Last year, GM's profit in the Chinese market fell by 34.1% year-on-year to reach US$446 million. Profits have been drastically reduced, making it difficult for SAIC-GM to “lose money to support the family” again. People familiar with the matter said that after adjusting its product strategy, Chevrolet will drastically reduce its sales target in China. In 2025, it will only have 50,000 units, less than 30% of last year's sales.

Chevrolet's retreat is actually a microcosm of a second-tier joint venture brand. The fierce attack of independent brands has accelerated the encirclement of low- and mid-range oil truck brands, and new energy models are rapidly eroding the market share of joint venture brand fuel vehicles.

Second-tier joint venture brands may face a more severe living environment, and can only barely maintain their “self-depreciation”. In some regions, the discount margin for the new-generation Honda Accord reached 45,000 yuan; for the recently launched Kia EV5, the guide price is only 149,500 yuan.

For them, the internal affairs of autonomous car companies are only external causes. Slow product iteration, failure to meet the needs of the Chinese market, and poor intelligence have become the sword of Damox hanging over their heads.

Over the past few years, domestic brands have built up systematization capabilities at the electric and smart levels, yet it is difficult for second-tier brands to quickly catch up and imitate. Perhaps the only thing that can be done right now is to use the strengths of the parent brand and group to make up the lessons as best as possible.

However, the popularity of the SUV market and changes in consumer demand have made Chevrolet see new hope. Lu Yi, deputy general manager of SAIC-GM, said that starting this year, Chevrolet will further adjust its positioning and become a brand characterized by personalization+SUVs. Perhaps relying on resources such as GM's Autoneng pure electric platform has given Chevrolet a little more confidence.

At the SAIC-GM Partner Summit, which opened in early March, SAIC-GM's general manager Zhuang Jingxiong publicly stated that he would focus his attention on the plug-in hybrid market. Among them, the first batch of “Explorer Equinox”, as the first smart electric plug-in hybrid SUV under the Chevrolet brand, will take on the heavy responsibility of boosting the sales volume of the Chevrolet brand.

In addition to improving the SUV product line, Chevrolet Marketing Director Zhou Peng previously revealed that Chevrolet will also introduce popular high-end models in the US market. GM's high-end imported car platform Doranger will officially introduce the Chevrolet TAHOE to the domestic market this year.

As can be seen from these measures, Chevrolet plans to abandon low-priced and low-profit sedan models in China and return to the traditional American large SUV market. This will be the key to Chevrolet's restart.

Obviously, Chevrolet is far from “shooting the last bullet”, and there is still hope for how to make good use of its trump card to achieve brand revival.

It's just that in the face of the all-round internal situation of Chinese brands, Chevrolet also show more courage and courage to reform to accurately grasp the changing needs of consumers. This is the core of whether second-tier brands can turn around. Time is running out, and after a quick adjustment, the Chevrolet still needs to speed up quickly.