AutoBeta(AutoBeta.net)03/31 Report--

On the last working day of March, SAIC officially disclosed its annual financial report. During the reporting period, the total operating income of SAIC was 744.71 billion yuan, up 0.09% from the same period last year; the net profit belonging to shareholders of listed companies was 14.11 billion yuan, down 12.48% from the same period last year; and the net profit belonging to shareholders of listed companies after deducting non-recurrent profits and losses was 10.04 billion yuan, an increase of 11.71% over the same period last year.

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. Data show that SAIC accumulated wholesale sales of 5.021 million vehicles in 2023, down 5.31 per cent from the same period last year, of which 1.123 million new energy vehicles were sold, up 4.6 per cent from the same period last year.

In terms of specific brands, SAIC Volkswagen sold 1.215 million vehicles, down 8.0% from the same period last year, while SAIC GM sold 1.001 million vehicles, down 14.45% from the same period last year, and SAIC GM Wuling sold 1.403 million vehicles, down 12.3% from the same period last year. Among independent brands, SAIC sold 986000 passenger cars, up 17.5 per cent from a year earlier, while SAIC Chase sold 227000 vehicles, up 5.84 per cent from a year earlier. In addition, SAIC Zhiji sold 38000 vehicles.

According to Automotive Industry concern, SAIC-Volkswagen, SAIC-GM and SAIC-GM Wuling account for 72.1% of the group's total sales, while SAIC passenger cars and SAIC Chase account for only 25%. In other words, the joint venture brand is still the main source of sales of SAIC, while with the exception of SAIC-Volkswagen, the other two joint ventures have seen sales declines of more than double digits, and their performance will directly affect the performance of the group. For SAIC, the future growth will be driven by its own brands, even though the current sales of Shanghai passenger cars + Zhiji cars are far less than those of joint venture brands, but achieve year-on-year growth.

SAIC Volkswagen and SAIC General Motors are still the profit sources of the group. According to the financial report, SAIC-Volkswagen has an operating income of 140.28 billion yuan and a net profit of 3.13 billion yuan in 2023. SAIC GM has an operating income of 145.29 billion yuan and a net profit of 2.54 billion yuan. SAIC GM Wuling has an operating income of 76.01 billion yuan and a net profit of 930 million yuan. According to this statistics, the three joint ventures account for 46% of SAIC's total profits.

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 346000 vehicles in 2203, ranking fifth in the car rankings and third in the sedan list.

Under the cruel knockout stage of the industry, joint venture brands are losing their pricing power in the Chinese market. After the Spring Festival, BYD took the lead in opening a new round of price cuts. Qin PLUS and destroyers 05 dropped to 79800 yuan, and shouted the slogan "electricity is lower than oil", directly into the joint venture A-class fuel vehicle market. Since then, more and more independent new energy brands have joined the price reduction camp, and the market of joint venture brands has been continuously eroded. 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. According to SAIC's plan, self-owned brands will account for 60% of sales by 2025.

In early 2023, SAIC said it would make 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 5.021 million vehicles, which, if calculated in terms of sales success rate, is still 1 million short of the target of 6 million. 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.

SAIC, the largest auto group in China, is constantly strengthening the development of its own brands, but it is bound to be difficult for elephants to turn around. 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 15.07 yuan last trading day.

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