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Last year's net profit fell by more than 10 billion, and SAIC, which saw its sales and performance plummet in the first quarter of this year, ushered in a "hard day". The collective stall of SAIC-Volkswagen and SAIC-GM has made SAIC's life very unstable.

According to the Shanghai Securities News, SAIC's sales and performance have dropped again and again, and Shanghai executives have been unable to sit still. The situation of SAIC has attracted the attention of senior officials in Shanghai, issuing special instructions to SAIC to study the existing problems, including brand, quality and sales. At the same time, relevant departments in Shanghai will step up support for SAIC's nine major brands and a number of new cars.

In 2018, SAIC ranked seventh among global auto companies and 36th among the top 500 companies with a daily profit of 100 million yuan. However, in 2019, the performance of the subsidiaries of SAIC Group has declined, and the performance profit has been greatly affected. According to SAIC's performance report, SAIC achieved a total revenue of 843.324 billion yuan in 2019, down 6.53% from the same period last year, and the net profit belonging to shareholders of listed companies was 25.603 billion yuan, down 28.90% from the same period last year, resulting in a loss of 10.4 billion yuan. This is also the first decline in annual profits since SAIC went public 10 years ago.

As for the reasons for the decline in profits, SAIC said, "vehicle sales have decreased this year compared with the same period last year, while the switching between national five and national six models has aggravated the contradiction between supply and demand, and the decline of domestic new energy vehicle subsidies and other factors."

In terms of sales, SAIC sold 6.238 million vehicles in 2019, down 11.54 per cent from the same period last year. Among them, SAIC-Volkswagen sales reached 2 million, down 3.0% from the same period last year; SAIC GM's cumulative sales were 1.6 million, down 18.8% from the same period last year; SAIC GM Wuling's overall sales were 1.66 million, down 19.5% from the same period last year; SAIC passenger car sales totaled 673300 vehicles for the whole year, down 4% from the same period last year.

Along with the decline in sales, the market performance of SAIC's sub-brands also fluctuated. SAIC GM owns Buick, Chevrolet and Cadillac brands. due to product strategy problems, SAIC GM is in a disadvantageous state of "price for volume". Due to the changes in the market competition environment, SAIC-Volkswagen product terminal concessions are also increasing, followed by the exposure of Passat security issues, so that SAIC-Volkswagen public opinion environment and performance are greatly affected.

In 2020, SAIC Group fell more than the industry average, performance also plummeted, a number of measures to save enterprises and brands were immediately announced.

According to the financial results for the first quarter of 2020, SAIC achieved operating income of 101.249 billion yuan, down 48.35% from the same period last year. The net profit belonging to shareholders of listed companies was only 1.121 billion yuan, a year-on-year decline of 86.42%.

At the same time, SAIC sold 679000 vehicles in the first quarter, down 55.71% from the same period last year, more than the average decline in China's overall auto sales. Among them, SAIC-Volkswagen sales fell 61% year-on-year in the first quarter, and SAIC GM fell 58% year-on-year.

Due to market pressure, SAIC has implemented a number of rescue measures. In April, the price of all SAIC Skoda models was officially reduced, the brand and product positioning were downgraded, and the price of Kodiak models fell to 24500 yuan. Officials believe that the adjustment of SAIC Skoda brand will further realize the distinction between Volkswagen and Skoda brands, and at the same time be closer to Skoda's real market level.

In May, SAIC, together with its five major enterprises, held offline promotional activities, with car prices as low as 50% discount, offering 50% discount on car purchase, free of purchase tax, low down payment and other concessions.

After several years of "making a fortune", with the continuation of the cold winter of the car market and the increasingly powerful competitors, SAIC has encountered severe market challenges, including the internal competition and product strategy of many of its sub-brands. the problems of brand building and marketing level are all urgent to be solved.

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