SAIC to consider phasing out brands due to sales slump in all new Marques.

SAIC Motor Corp. runs successful joint ventures with General Motors and Volkswagen AG, but its own brands are losing ground.

The state-owned automaker is making huge investments to improve products and revive its car business. But if it wants to ensure that the money is well spent, the company should reduce the number of its car brands.

In 2005, SAIC bought the Rover 75 platform from bankrupt MG Rover. It soon started developing sedans on that platform under the newly created Roewe brand.

Two years later, it acquired Nanjing Automobile Group Co., another state-owned automaker that had purchased the MG brand and the Rover 25 platform from the British carmaker.

SAIC President Chen Zhixin assured the press at the time that the Roewe and MG brands would start generating profits after combined sales reached 260,000 vehicles.

But after the two brands topped 230,000 sales in 2013, deliveries began to decline. In 2014, sales of Roewe and MG cars slumped 22 percent to 180,018 vehicles.

Not content with two brands, SAIC launched a third: Maxus. In 2013, a van and a multipurpose vehicle were introduced under the new brand.

The two models were based on a platform that SAIC had purchased in 2009 from LDV Group, a bankrupt British producer of commercial vans. China's car buyers have been unimpressed. Last year, Maxus generated sales of only 21,012 vehicles.

The Roewe and MG brands continue to fade, with combined China sales down 37 percent in the first two months of 2015 to 21,039 vehicles. And Maxus continues to struggle, with only 4,179 deliveries year to date.

What went wrong? Saddled with weak product development, SAIC must rely on obsolete MG Rover platforms. And that's why Roewe, MG and Maxus are not competitive.

To be sure, SAIC operates technical centers in China and England to enhance its products. The company is improving its powertrains and is developing a platform dubbed the A architecture.

Starting next year, future Roewe and MG compact sedans will be built on the new platform. But this alone is not enough to fix SAIC's problems; the company must also pare its multiple brands.

SAIC is a newcomer in a sedan market dominated by global giants such as VW and GM. It lacks the technology and product development needed to support three passenger vehicle brands.

In recent years, Chery Automobile Co., Great Wall Motor Co. and Geely Automobile Holdings all phased out multiple brands so that they could sell vehicles under one brand.

Those moves produced the desired results, and each company has begun to rebuild sales. Now it is time for SAIC to follow suit.

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