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Position : Home>>Statistics>>SAIC Group announces profit cut in half

SAIC Group announces profit cut in half

Date:2023-05-06 Author:Nancy Source:www.chinaspv.com

May 6, 2023, Shanghai, China, On the last working day of April, SAIC Motor disclosed its annual financial report as scheduled.

The data shows that in 2022, SAIC Motor achieved a total operating income of 744.063 billion yuan, a year-on-year decrease of 4.59%; the net profit attributable to shareholders of listed companies was 16.117 billion yuan, a year-on-year increase of 34.30%. The profit was 8.99 billion yuan, a year-on-year decrease of 51.59%.
SAIC Motor stated that in 2022, the operation of the industrial chain and supply chain was blocked, the market fluctuated sharply, and the price of raw materials was high, which affected the company's performance. Especially in the first half of 2022, the operation of the supply chain of the automobile industry chain was blocked, and both ends of the supply and demand were under great pressure, making the entire industry extremely difficult.

Data show that during the reporting period, SAIC’s wholesale sales were 5.3026 million vehicles, a year-on-year decrease of 2.94%, and its annual sales target of 6 million vehicles was 88.4%. It is worth mentioning that this is the fourth consecutive year that SAIC's sales have declined. In 2018, SAIC's annual sales volume was 7.052 million vehicles, of which joint venture brands accounted for more than 86%. Since 2019, SAIC has gradually fallen below 7 million and 6 million record.

SAIC Volkswagen and SAIC GM are still the group's source of profit, but the aura of the two joint ventures is no longer there. During the reporting period, SAIC Volkswagen’s net profit was 8.729 billion yuan, a year-on-year decrease of 14.30%. In addition, SAIC-GM-Wuling, which focuses on the low-end market, achieved growth. Although the annual sales volume fell 3.62% year-on-year to 1.60 million vehicles, its net profit increased year-on-year 28.64% to 1.135 billion yuan.

Under the brutal industry elimination competition, joint venture brands are losing pricing power in the Chinese market. B-class models are subject to Tesla, and A-class cost-effective main products are subject to self-owned brand plug-in hybrid models. The price of BYD Qin PLUS Champion Edition has entered the price range of SAIC Volkswagen Lavida, and the latter's fuel vehicle price system has been greatly impacted. At the same time, joint venture brands are insufficiently prepared for new energy transformation, and the current penetration rate of new energy is less than 5%. According to industry insiders, the decision-making process of joint venture car companies was long, and product definitions were mostly controlled by foreign parties in the past. Once foreign resources are insufficiently invested, it will be difficult to catch up with the fierce competition and fast iteration of the new energy vehicle market in the Chinese market.

In addition, Zhiji and Feifan, the two major new energy brands under SAIC, have yet to gain a firm foothold in the mid-to-high-end new energy market. At the same time, the trend of new energy vehicles replacing fuel vehicles is irreversible. However, fuel vehicles still account for more than 70% of the market share in the Chinese market, and companies that are in the process of transformation have to face the embarrassing situation that "the growth of electric vehicles does not make money and the fuel vehicles that make money do not grow".

In other words, the performance of the joint venture brand fuel vehicle market can only maintain the overall market, and SAIC Group can only rely on new energy vehicles for a breakthrough. Although Zhiji and Feifan have invested a lot of resources, there is still a long way to go for recovery.

In 2023, SAIC set a sales target of 6 million vehicles. In the first quarter, SAIC’s cumulative sales volume was 1.2206 million vehicles, a year-on-year decrease of 26.99%, and the target completion rate was 20.3%. The sluggish sales of SAIC Group is closely related to the decline of joint venture brands. Among them, SAIC Volkswagen fell by 31.67% year-on-year, SAIC-GM-Wuling fell by 40.96% year-on-year, while its own brands SAIC Passenger Vehicle and SAIC MAXUS both achieved year-on-year growth.

The financial report for the first quarter shows that SAIC Motor achieved operating income of 145.965 billion yuan, a year-on-year scare of 20.03%; net profit attributable to shareholders of listed companies was 2.783 billion yuan, a year-on-year decrease of 49.55%; net profit attributable to shareholders of listed companies after deducting non-recurring gains and losses It was 2.163 billion yuan, down 56.32% year-on-year.
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