CHINA’s auto exporters had a banner March. Overseas sales of electric vehicles (EVs) and hybrids hit a record high after rising gasoline prices steered buyers towards clean-energy models.
But one company that’s ideally placed to take advantage of the oil shock is losing out to bigger competitors – a misstep that deserves immediate attention.
A little-known automaker based in the southwest city of Liuzhou, SAIC-GM-Wuling Automobile Co – a joint venture set up in 2002 between SAIC Motor Corp, General Motors Co, and Guangxi Automobile Group Co – has a successful range of low-cost mini EVs that should appeal to customers in South and South-East Asia hard hit by soaring fuel costs.
Introduced six years ago, the flagship model is the diminutive, no-frills Hongguang Mini EV, which sells for US$6,000.
It was China’s bestselling car in 2021 and 2022.
Last year, it was in second place after Geely Automobile Holdings Ltd’s more spacious Xingyuan hatchback.
With seating for four at a squeeze, the Mini’s small boxy size is ideal for replacing electric bikes and tricycles in less-developed areas, making the series a good fit for countries where two-wheeled vehicles are still the norm.
From the Philippines to Nepal, developing Asian economies have suffered disproportionately from the energy shock caused by the Iran war.
Customers across South-East Asia are snapping up models of BYD Co and Vietnam’s VinFast Auto Ltd.
But Wuling’s line of minis, including the Air EV, which sells for about US$12,000 in Indonesia, has not been able to capitalise on the resulting burst of interest in electrified cars in the same way as its rivals, an oversight that the joint venture owners should be working to address.
First-quarter sales from Wuling fell by 7%.
Shipments from the joint venture’s factory in Indonesia, its production hub for South-East Asia, declined as well.
To be sure, changes this year to the Chinese government’s cash-for-clunkers trade-in programme for older vehicles have hit the lowest-priced models, like the minis, especially hard.
But BYD and Geely, which also offer budget EVs, have been able to lean into blistering exports to offset weakness at home, with overseas sales as much as doubling in the first quarter.
Their shares, especially Geely’s, have rebounded since the war began, a reflection of that optimism.
Total exports of Chinese new energy vehicles reached a record 935,000 units in the first quarter, more than doubling from the year before.
BYD is now targeting 1.5 million in exports this year, a 50% increase from 2025.
That kind of momentum should prompt SAIC, the senior partner in the Wuling joint venture with 50.1% ownership, to lead production and marketing efforts to take advantage of interest in ultra-affordable EVs.
Its attention, though, is elsewhere.
The carmaker is focused on making its own, non-joint venture brands, the MG and Roewe, successful in an exceptionally competitive market where domestic sales dropped by 17% in the first quarter.
With shipments of proprietary lines up 40% in the first three months, that strategy is working – but it comes at the expense of its partnerships, especially smaller ones like Wuling. The other owner, GM, is similarly occupied.
The Detroit legacy automaker has returned to profit in China after a 2024 overhaul that dramatically shrank its business.
Attention has shifted to reviving the fortunes of a separate joint venture it has with SAIC, which sold two million vehicles a year, mainly in China, at its 2017 peak.
The 30-year-old alliance expires next year, and there’s still no word on whether it will be extended.
Against that backdrop, the Wuling joint venture is humming along without giving its shareholders major headaches.
Much of its output is sold overseas, including gasoline-powered Chevrolet models bound for Mexico – a strategic area of growth for GM as it increasingly repositions its China operations as an export base.
The oil shock presents a compelling opportunity for Wuling’s line of tiny EVs.
It would be wise to seize it and not let its shareholders’ priorities get in the way or cede ground to rivals BYD, Geely and VinFast. — Bloomberg
Juliana Liu is a columnist for Bloomberg Opinion’s Asia team, covering corporate strategy and management in the region. The views expressed here are the writer’s own.
