Employees carry an ad for an SAIC Motor car during the Wuhan 2014 Motor Show. (Photo : REUTERS)
State-owned automaker SAIC Motor Corp. should reduce the number of its car brands if it wants its revival program to succeed, according to Autonews China managing editor Yang Jian.
Starting next year, SAIC's Roewe and MG compact sedans will be built on the new platform dubbed the A architecture to address last year's slump in sales.
China's car buyers were unimpressed with the two brands with obsolete platforms based on a 2009 model.
SAIC is also improving its powertrains.
The two brands topped 230,000 sales in 2013, but deliveries began to decline in 2014 when sales of Roewe and MG cars slumped 22 percent to 180,018 vehicles.
Meanwhile, Maxus, another brand under SAIC, generated sales of only 21,012 vehicles.
But Yang believes that improving the platforms and powertrains are not enough to fix SAIC's problems.
It noted that the company is a newcomer in the sedan market without technology and product development needed to support three brands.
Yang advised SAIC to follow what Chery Automobile Co., Great Wall Motor Co. and Geely Automobile Holdings did in phasing out some brands to concentrate on just one.
Those moves produced the desired results, and each company has begun to rebuild sales.
Meanwhile, SAIC also announced it would establish a joint venture with Alibaba Group Holding Ltd. and invest 1 billion yuan ($160 million) to develop partly self-driving and Internet-connected cars.
The joint venture aims to launch its first car in 2016.
Alibaba announced that it is developing new technologies and services integrating its communication, entertainment and map into the project using cloud computing.
