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SAIC-Volkswagen profit has dropped by 80%!

2024-03-03 Update From: AutoBeta autobeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)09/01 Report--

On the last working day of August, SAIC disclosed its annual financial report as scheduled. According to the data, the total operating income of SAIC in the first half of 2023 was 326.55 billion yuan, an increase of 3.34% over the same period last year; the net profit belonging to shareholders of listed companies was 7.09 billion yuan, up 2.54% from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurring profits and losses was 5.67 billion yuan, down 7.19% from the same period last year.

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With regard to the increase in revenue and profit, SAIC said that during the reporting period, the company's major joint ventures accelerated the strategic transformation of new energy and increased the marketing of new products, although the current net profit at the single level of the manufacturing sector was affected. however, considering the contribution of positive factors such as consumption promotion and inventory reduction of sales companies, the impact of major joint ventures on the company's net profit for the current period is limited.

Since 2023, the domestic auto market has been extremely internal, and the overall influence of joint venture brands has declined, which has had an impact on many large auto companies, including SAIC.

According to the data, SAIC accumulated wholesale sales of 2.0716 million vehicles in the first half of the year, down 7.28% from the same period last year, of which sales of new energy vehicles were 372100, down 5.26% from the same period last year. In terms of specific brands, among the joint venture brands, SAIC Volkswagen sold 503300 vehicles in the first half of the year, down 12.42% from the same period last year, while SAIC GM sold 451000 vehicles, down 11.00% from the same period last year, and SAIC GM Wuling sold 520100 vehicles, down 16.39% from the same period last year. Among independent brands, SAIC sold 410800 passenger cars, up 12.30 per cent from a year earlier, while SAIC Chase sold 106000 vehicles, up 17.74 per cent from a year earlier. In addition, SAIC Zhiji sold 9790 vehicles.

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According to Automotive Industry concern, SAIC-Volkswagen, SAIC-GM and SAIC-GM Wuling account for 71.17% of the group's total sales, while SAIC passenger cars and SAIC Chase account for only 24.17%. In other words, the joint venture brand is still the main source of sales of SAIC, while the sales of the three joint ventures have declined by more than double digits, and their performance will directly affect the group's performance, but the future growth will be driven by their own brands. although the sales volume of SAIC + SAIC Chase is far less than that of the joint venture brand, it has achieved year-on-year growth.

SAIC-Volkswagen and SAIC-GM are still the source of profits for the group, but the halo of the two joint ventures is gone. According to the financial report, SAIC-Volkswagen's operating income in the first half of the year was 53.634 billion yuan, down 15.65% from the same period last year, while net profit was 534 million yuan, down 80.95% from the same period last year. SAIC GM's operating income was 62.048 billion yuan, down 8.11% from the same period last year, while net profit was 528 million yuan, down 76.84% from the same period last year. SAIC GM Wuling's operating income was 26.995 billion yuan, down 16.17% from the same period last year, while net profit was 40 million yuan, down 88.60% from the same period last year.

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Take SAIC Volkswagen as an example, it covers three major brands: Volkswagen, Skoda and Audi, but in fact, only Volkswagen models can be sold. At present, the domestic models of the brand include Lang Yi, Passat, Lingdu, Tuang, Tuguan, Tuyue, Tujia, Tuan, Weiran and so on. Lanyi is the highest-selling model of SAIC-Volkswagen, and it is also the evergreen model of joint venture compact car. Lang Yi sold a total of 151800 vehicles in the first half of the year.

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Under the cruel knockout stage of the industry, joint venture brands are losing their pricing power in the Chinese market. The main A-class cost-effective products are controlled by independent brands. The price of BYD Qin PLUS Champion Edition has entered the price range of Lang Yi, whose fuel vehicle price system has been greatly impacted. At the same time, the joint venture brands are ill-prepared for the transformation of new energy, with Volkswagen ID.3 selling 12100 vehicles in half a year, ID.4 X 11800 and ID.6 X only 3852, which together are not even as good as BYD's monthly sales. As a last resort, SAIC-Volkswagen began to sell at reduced prices in the third quarter, including new energy vehicles and fuel vehicles, but the price-for-volume measure is undoubtedly drinking poison to quench thirst.

The independent brand has gradually grown into the group's growth potential stock. It is not difficult to see that SAIC still needs joint venture brand control at present, but it needs to be handed over to its own brand in the future. In the first half of the year, SAIC sold 410800 passenger vehicles, up 12.3 per cent from the same period last year, while SAIC Chase sold 106000 vehicles, up 17.74 per cent from the same period last year. According to SAIC's plan, self-owned brands will account for 60% of sales by 2025.

In addition, going out to sea has also become an important engine for SAIC's revenue growth. In the first half of the year, SAIC sold 533000 vehicles overseas, an increase of 40.01% over the same period last year, accounting for 22.8% of the total domestic car exports and 25.7% of the group's total sales. In terms of subdivision, the MG brand is still the main sales force, selling 115000 vehicles in Europe in the first half of the year and entering the top 10 in the Middle East, Chile, Australia and Mexico.

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At the beginning of the year, SAIC said it made all-out efforts to sprint the annual target of 6 million vehicle sales, 1.5 million new energy vehicles and 1.2 million overseas sales. During the reporting period, SAIC sold a total of 2.0716 million vehicles in the first half of 2023. If calculated on the basis of the sales success rate, it is still 3.9 million short of the target of 6 million, and the pressure is still relatively great. In the future, joint venture brands can only maintain the market, while SAIC can only rely on independent brands and new energy vehicles for upward breakthrough, while Zhiji and Feifan brands invest a lot of resources, but there is still a long way to go to achieve blood recovery.

Now, the era of "market capitalization" and "earning 100 million a day" has also changed. SAIC is constantly strengthening the development of its own brand, but the elephant "turn around" is bound to be very difficult. Relying on performance and sales, SAIC's performance in the capital market is also not satisfactory. Its share price has started a sharp downward trend since it hit a high of 23.45 yuan in November 2020. SAIC shares closed at 14.54 yuan last trading day.

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