Alert: SAIC Motor Under Pressure Amid EV Slowdown in China

SAIC Motor faces weak demand and EV competition; February deliveries fall 4.2%, NEV up 15% while ICE declines 12%.

Executive Summary

SAIC Motor Corp Ltd, China's largest automaker, is facing headwinds caused by weak domestic demand and fierce competition in the electric vehicle segment.

For European investors, especially in the DACH region, SAIC's performance exposes the risks of relying on an still volatile EV cycle, with China seeking a balance between stimulus, supply, and demand.

Recent Performance and Key Numbers

February 2026 deliveries fell 4.2% year-over-year, reaching 1.11 million units.

NEV sales (+15%) did not offset the drop in ICE (-12%). SAIC still generates over 90% of revenue in China, where stimulus momentum has yet to recover consumption.

• Q4 2025: revenue +5% to RMB 239 billion; net margin declined to 4.8% due to aggressive promotions.
• Exports advanced 30% to 1 million units; Europe remains a growth point.

Business Structure and Strategic View

SAIC operates mass-market brands Roewe and MG, as well as joint ventures with VW SAIC and GM SAIC, and the premium EV line via IM Motors. The business model involves a holding company with listed subsidiaries, offering diversified exposure but limiting pure EV upside.

Global performance depends on pricing, volumes, and the EV mix composition, with embedded software gaining increasing importance.

Demand in China and Margins

The Chinese passenger car market contracted 2% at the start of 2026, pressured by high inventories and consumer caution. Fleet exposure helps, but retail EV demand has cooled following the end of subsidies.

The sales mix composition sees EVs rising to 35% of sales, up from 25% the previous year, driving portfolio transformation.

Gross margins retreated to 18.2%, weighed down by warranty expenses and raw material costs. Management targets 20% margin by 2028 via scale, while battery deflation helps only marginally.

Cash, Debt, and Shareholder Return

The Net Debt/EBITDA balance of 1.8x allows for aggressive capex without significant dilution. Free cash flow supports a 50% payout, with potential for special dividends if EV ramp-up occurs. An RMB 10 billion share buyback program is authorized.

European investors, including Swiss ones, monitor CHF trades on SIX as part of refinancing and forex hedging.

What Comes Next

Near-term catalysts include the Q1 2026 results in April, potential stimulus, and robotaxi pilots with IM Motors, which could re-rate valuation. Furthermore, export agreements in ASEAN are among the prospects.

Risks and Scenario for Investors

Key risks include a prolonged downturn in the China cycle, US tariffs, and chip shortages. The trade-off is between a high growth curve and margin volatility, with geopolitics weighing on European positions.

Outlook for European Investors

SAIC offers tactical exposure to the EV sector with a dividend cushion. For DACH portfolios, an adjustment of position around 2-3% of the portfolio is recommended, monitoring liquidity on Xetra. Long term, MG's global expansion may sustain a hold view.

Comments: Which aspect of SAIC's transformation do you think will have the most impact in the coming quarters—the recovery of demand in China or the advance of EV exports to Europe? Share your view in the comments below.