In an unexpected resurgence, SAIC Motor Corporation Limited, one of China’s largest automotive manufacturers, orchestrated a remarkable comeback after suffering a steep decline of over 8% in its stock value. The company’s shares rebounded sharply later in the trading day, rising to an increase of over 5%, revealing an astonishing trading amplitude throughout the day of 13.75%. This stark volatility indicates the exhilarating nature of stock trading, where sentiment can turn dramatically over the course of hours.

The battle between bullish and bearish investors during this period led to SAIC achieving record-high trading volumes of approximately 55.93 billion yuan, a figure that challenges records set during the bull market of 2015, placing it fourth in historical trading volume.

Since September 24, SAIC has witnessed a cumulative rise in share price of 40.62%, effectively returning the stock to the price levels seen between March and September of 2021. This sharp recovery followed various strategic moves including the recent launch of new models that have garnered the interest of consumers and investors alike.

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Notably, the company celebrated the launch of its latest models, including the Roewe iMAX8DMH and D7 DMH World Champion Edition on November 8. The iMAX8DMH was released in three tiers, priced from 199,900 yuan to 249,900 yuan, while the D7, featuring competitive pricing starting from 99,800 yuan, was aimed at a wider consumer base.

The Roewe D7 DMH World Champion Edition boasts impressive features such as a remarkable range of 2,208.719 kilometers on a full charge and fuel consumption as low as 2.49 liters per 100 kilometers. This model not only breaks records but also earned the title of “the most fuel-efficient hybrid B-class car in the world,” a testament to SAIC’s engineering capabilities and innovation in an increasingly competitive automotive landscape.

The introduction of these six new models is anticipated to further invigorate sales for SAIC’s self-owned brands, contributing to a recovery in the otherwise challenged domestic car market.

Contrary to alarming trends in previous months, the company’s October sales report indicated a positive shift. SAIC Volkswagen reported sales of 113,500 vehicles, marking a remarkable month-on-month increase of 20.74%. Meanwhile, SAIC General Motors recorded sales of 36,300, showing a staggering 64.45% increase. Furthermore, SAIC-GM-Wuling achieved sales of 140,500 vehicles, representing a 27.73% increase from the prior month, showcasing a robust recovery across its joint ventures.

All three major joint venture brands saw increasing month-over-month growth, indicating that SAIC Motor Corporation is gaining traction against its competitors.

Among the self-owned brands, SAIC’s passenger vehicle sales climbed significantly to 74,700, reflecting a month-on-month jump of 37.33%. Meanwhile, its premium smart EV brand, IM Motors, broke its own records by surpassing 10,000 units sold, a phenomenal increase of 59.68%—a figure that was up a staggering 148.9% year-over-year.

This impressive performance led to a short burst of stock growth for SAIC from November 11 to 13, where the company enjoyed three consecutive days of stock price increases, followed by two additional days of gains. Investors apparently are betting heavily on the company to continue its recovery.

However, the battle for market supremacy is far from settled; SAIC has recently been surpassed by rival BYD, marking a significant shift in the automotive landscape.

The market’s enthusiasm suggests a potential reversal of fortunes for SAIC after a difficult period. However, it’s important to note that when examining the year-over-year data, the figures still appear quite bleak.

From January to October 2024, sales figures for SAIC Volkswagen, GM, and GM Wuling decreased by 7.01%, 61.11%, and 5.85% respectively. The loss of market share has been stark, particularly against the backdrop of a growing electric vehicle (EV) movement that has seen joint brands falling behind.

This decline indicates mounting challenges for traditional automakers, who, despite having dominated the fuel-powered vehicle sector, face increasingly fierce competition in the EV space. The window for a successful transition to electric vehicles is rapidly closing as their technological capabilities and brand recognition have yet to catch up with newer competitors.

The glory days of joint-venture brands leading the Chinese automotive industry appear to be over, with autonomous brands emerging as formidable challengers.

In the realm of self-owned brands, despite notable performances from IM Motors, overall passenger vehicle sales from SAIC dropped 25.32% year-on-year, with total sales hitting 556,000 units within the first ten months, down 188,500 units compared to the previous year.

To illustrate the significance of this decline, while IM Motors saw its sales grow by an impressive 148.16% to reach 47,500 units, these figures fall short against the overall downturn experienced by SAIC in total passenger vehicle sales.

Analysts point to a lack of competitive edge among SAIC’s self-owned brands in this fiercely competitive market landscape where BYD has recently outperformed SAIC’s sales figures.

After first surpassing SAIC’s monthly sales figures in June of this year, BYD’s sales trajectory soared, showcasing an ongoing trend of increasing performance. In September, BYD’s cumulative sales also officially eclipsed those of SAIC, marking the end of an era—a break in a record that saw SAIC maintain its market dominance for 18 consecutive years.

The implications for SAIC are staggering, especially when juxtaposed with its financial reality: a net profit decline not witnessed in 15 years.

Back in 2018, SAIC reached an impressive peak of 7.0517 million units sold. However, this moment of glory has been followed by a continuous five-year downward trend, bringing the total sales down to 5.0209 million units by 2023, yielding a compound annual growth rate (CAGR) of -6.57% between 2018 and 2023.

This year, the company aimed to stem the decline by setting an ambitious sales target of 5.45 million units. Yet, stark realities surfaced with figures revealing the company only achieving 3.0512 million units sold by October 2024, reflecting a year-over-year drop of 21.13%, thus completing only 56% of its goal.

At the current trajectory, forecasts suggest that SAIC’s 2024 sales could plummet to around 4 million units.

SAIC has acknowledged the brutal impact of market contractions in the traditional fuel vehicle sector, exacerbated by an unprecedented price war, which has culminated in diminished sales revenue, declining gross profits, and reduced cash inflow.

In the first three quarters of 2024, the company's revenue stood at 430.48 billion yuan, with a net profit attributable to shareholders of 6.907 billion yuan, and a non-recurring profit of just 1.05 billion yuan. These figures reflect significant year-on-year declines of 17.74%, 39.45%, and an eye-watering 88.92% respectively.

The stark truth reveals the non-recurring net profit, acting as a clearer indicator of the company’s core business health, hitting a record low not seen since 2009.

In an automotive landscape characterized by sound waves of competition, the scenes of success and struggle are laid bare: while one brand captures unprecedented heights, another grapples with a decade-and-a-half of regression.

This analysis is intended purely as a personal perspective for contextual understanding.