Rivalry in SAIC: China auto giant eyes emirates
China’s SAIC Motor expands its flexible light commercial vehicle platform, building upon a quietly expanding base of business
Old stereotypes die hard, and to hear that a Chinese auto maker is delivering premium product into the light commercial segments might rub against the grain for some, but precisely that is happening in the UAE.
SAIC Motor (formerly Shanghai Automotive Industry Corporation) — one of the ‘Big Four’ automotive manufacturers in China — has now been quietly plugging the Maxus V80 diesel van range into the UAE for the last two years. With the Dubai International Motor Show this month it has also launched the petrol Maxus G10 seven- to nine- seater MPV (multi-purpose vehicle) and announced plans to introduce the G10 cargo van into the market to work alongside the V80 in capturing market share in the logistics sector.
Jolly Yang, director for SAIC Motor’s overseas business, explains: “This company has very big ambitions. For the six months before the last, we did not achieve very significant results; but afterwards, step-by-step through penetration and trial, local customers have come to accept or realise that Maxus is very different from the other brands in the market, and very different from other Chinese brands.
“So far we have met our own expectations, with the V80 vans achieving roughly 12% market share in the UAE in the beginning — but there has also been a strategy since the start of this company to expand to other commercial vehicle opportunities within the Maxus brand beyond the cargo van application. From the very inception of this project, we had already set up the timeline for the Maxus G10 MPV, and, other than the MPV, we have already launched the setup for a pickup and SUV.”
In cargo vans, the V80 range in the region includes a short-wheelbase middle-roof van with 7.8m3 in capacity, a long-wheelbase middle-roof van with a 10.16m3 capacity and a long-wheelbase high-roof van with 11.4m3 in capacity. The long-wheelbase middle-roof V80 also comes as a 15-seat minibus and an extra-long-wheelbase high-roof 18 seat-minibus.
The minibuses have so far proven to be the company’s stellar success in the region, accounting for the majority of market share. However, SAIC now hopes that the petrol G10 MPV can achieve success in the logistics arena, where the V80 has until now picked up modest sales due to what was until recently the comparatively high price of diesel versus petrol.
Wang explains: “Since the MPV has a petrol engine, we are targeting 5%-8% by the end of the first year in the logistics segment, and we are targeting a higher market share in Saudi Arabia. Our V80 van market size there is much smaller than in the UAE because of the diesel engines. The greatest advantage of this product is that it is more powerful, but there is greater market acceptance for petrol engines.
“Frankly, it’s a little bit aggressive, but hopefully we can gain more than 5% for the first year of operation in most of the markets. In Chile, Australia and New Zealand, we have seen more than 15% market share, and for all of these three markets, it’s only been three years.”
In the UAE, where the deregulation of the fuel market has for now resulted in a sizeable drop in the diesel price, the situation could also prove positive for the V80 range.
“Prior to six months ago the diesel cost was much higher than gasoline,” admits Wang.
“That’s why for the UAE market our main market share has come from the minibus, not our diesel van — even though it is much better than others. The reason is that people who buy commercial vehicles care much more about the operational cost, and for many, the cost of diesel has been an issue. Now we think we can expect more market share.”
Now, with solid experience and established clients, SAIC’s local team is much better setup to effectively take the G10 to market.
Wang notes: “Our regional office was setup one-and-a half-years ago, and now the team is much more familiar with the local market. We have also recruited a lot of local talent from Middle Eastern countries, many of whom are familiar with the automotive industry, with more than 10 or 15 years’ experience.
A market that is proving particularly ripe for the manufacturer’s V80 minibuses are the tourism and education sectors, where there is an emphasis on both comfort and safety.
Wang details: “For the school bus segment we expect to secure at least 50% — half of the market for school buses — by the end of next year. Especially for the high-end private schools, we expect to get most of the market, but we have also already started to penetrate the regular school market.
“A good sign is that even though we’ve just started, we’ve already been accepted and awarded by the RTA. They immediately bought 10 units of the extra-long-wheelbase V80 — which is a very good result. We are using the extra-long-wheelbase of the V80 to deliver an 18-seater minibus to compete with Toyota, which has a 16-seater — and so we are hopeful that our 18-seater will be more competitive.”
Aside from the additional capacity of SAIC Motor’s extra-long-wheelbase V80 minibus, both Maxus minibuses excel in the field of safety due to the comparably rigorous regulation for school transport in China.
Wang notes: “Our government has paid a lot of attention to the safety issues involving children. The government departments, from the central to the federal or even local level, release detailed regulations on vehicle safety.”
Maxus is also purportedly the only brand from Asia that has performed roll-over tests.
Wang notes: “This is very important for these vehicles: it is not the face-to-face crashes that result in fatalities, but the roll-over. So for whoever buys school buses and prefers safety, we have an excellent performance in this area, and have been awarded contracts not only with schools, but also the RTA.”
Indeed the SAIC team is adamant that Maxus is ahead of the competition in terms of safety — more than adequately breaking the mould of a cut-price Asian brand, which collectively are instead SAIC’s main competition.
Wang sums: “We are a little more costly than our competitors because the product is better, but it’s about the whole package, including the safety and the aftersales service.
“We are not afraid of European brands, because we have entered into more than 35 countries and wherever we have entered, after a certain number of years, we have successfully beaten European brands on cost-effectiveness.
“Our main competitors are not the regular competitors from Europe; they are Toyota, who have more options than, but who are also probably not as safe as us. Nevertheless, people are more familiar with them, so we’ve still a long way to go in order to compete with them 100%.”
KEEN ON GREEN
SAIC Motor also launched the electric Maxus V80 this year, and has already sold 1,200 to 1,500 of the large vehicles in China so far.
The electric G10 subsequently had its concept launch at the Shanghai Auto Show and will start production by the end of this year.
Wang notes: “Electric is one of our strengths. We have been investing a lot and developing this for a long time. The Dubai Expo 2020 will be a very good chance for our electric vans — for both the EV80 and EG10 in Dubai. The international expo is Dubai’s chance for Dubai to show the world that it has upgraded from the previous automotive industry to the electric automotive industry, and both of these models both perform very well.
“The fully loaded 16-seater, with a gross vehicle weight of 3.5t, can last around 400km on a single charge, which means that as long as you are not carrying out long-distance operations, you will be ok forth the whole day.”
In terms of SAIC’s typical emissions standards for its regular vehicles, it has both Euro 5 and Euro 5 vehicles and will soon launch its first Euro 6 product, placing it ahead of the regulation in its home market.
Wang notes: “In China, the government has only just mandated Euro 5, but we have already launched samples that adhere to Euro 6 — so we are not just one, but two steps ahead, and much further ahead than the competitors.
“Compared with some other competitors we are more CSR-oriented, and we will not degrade our emissions standards. It would be quite easy for us. Instead we are providing more than what is requested by the market.”
In Dubai, SAIC is delivering vehicles that are based on Euro 5 standards, but with some minor adjustments “to meet the local market”. Ultimately, the company has a bigger plan.
Wang sums: “Yes, it cost us a lot of money, a lot of investment, but we want to be a more responsible vehicle company, and to gain the public’s trust. It’s not about selling a car today and seeing how much profit you get; the key is that after five or 10 years, step-by-step, people realise that this vehicle and this company is targeting the future, not only today. We hold ourselves to much higher standards, and we are guiding the industry.”