SAIC Motor to hit $5.3b in net profit in 2018

SAIC Motor to hit $5.3b in net profit in 2018

SAIC Motor Corporation Limited (SAIC Motor for short) released a review of its annual performance in 2018 on Jan 31, 2019, with an expected net profit of around 36 billion yuan ($5.3 billion) attributable to shareholders of the company, up to 4.6 percent year on year and outpacing the annual sales growth which stood at 1.75 percent, indicating the continuous improvement of the company’s business performance.

SAIC Motor witnessed a robust growth of its self-owned brands despite the slowdown of the auto market last year. In addition, it kept strengthening innovation input and has generated many future-oriented new technological achievements and realized rapid development of its new business model, demonstrating the remarkable role that the company’s new targets: Electrification, Intelligent Connectivity, Sharing and Globalization play in driving its business development.

Self-owned brands, new energy vehicles and overseas business

As the first auto maker in China that has proposed the four new targets mentioned above, SAIC Motor has been committed to developing core technologies and the differentiation strategy over the years, and has made its self-owned brands a new engine for its rapid growth. In 2018, its ROEWE and MG cars realized total annual sales of 702,000 units, up 34.5 percent year on year, and its Maxus hit 126,000 units, up 14.5 percent year on year. According to the China Association of Automobile Manufactures, the domestic auto brands owned by SAIC Motor, including Baojun and Wuling, witnessed 2.94 million of their vehicles sold last year, beating off competition from other domestic auto brands and accounting for 42 percent of the company’s total sales.

New energy vehicles (NEVs) and overseas business propelled the growth of the company’s self-owned brands. SAIC Motor sold more than 140,000 NEVs in 2018, doubling the NEV sales of the previous year for the fifth consecutive year. In particular, its ROEWE and MG NEVs reached 96,000 in sales, up 117 percent year on year, and its plug-in hybrid electric vehicles eRX5 and ei6 as well as the pure electric one Ei5 have been well received in the NEV market. In terms of overseas business, SAIC Motor sold 270,000 vehicles in other countries last year, with the sales volume in Thailand, Britain, Indonesia, Chile, Australia, New Zealand and the Middle East hitting 10,000 each. In particular, its MG cars reached 73,000 in overseas sales volume, up 176.5 percent from a year earlier, and its Maxus cars witnessed a year-on-year increase of 60 percent in annual overseas sales, at 16,000 units. 

In addition, continuous product improvement and a clear grasp of the upgrading consumption trend also guarantee the steady growth of the company’s vehicle sales. In 2018, by upgrading many of its car models, SAIC Volkswagen managed to seize the first place in the domestic auto market in annual sales and maintained such advantage for the fourth consecutive year. The cooperation project between SAIC Motor and Audi has been advancing at a steady and orderly pace, with Audi’s NEVs set to be produced in the MEB NEV plant of SAIC Volkswagen. The Cadillac brand of SAIC-GM maintained a strong momentum in the fierce competition among luxury cars, with annual sales hitting 228,000 units, up 31.8 percent from the previous year and significantly contributing to the profit growth of the company.

Innovation and business transformation

Independent innovation is a must for China to scale the heights of technologies in the world and to enhance the global competitiveness of its car manufacturing. SAIC Motor has been strengthening innovation to meet its four abovementioned new targets and transform itself into a comprehensive supplier of mobility products and services, with over 50 billion yuan having been devoted to innovation in recent years. Through independent innovation and joint ventures, SAIC Motor conducted much innovative work and created many new products in 2018.

Namely, the company launched ROEWE Marvel X, which is world-leading in having extremely low power consumption and artificial intelligence functions. It also launched the second round of innovations in technologies of the electric drive system, battery, and the electric control system, and pushed forward the development of a new electric vehicle architecture. In addition, the company established the MEB NEV manufacturing plant to promote the NEV production of its joint ventures. SIAPM (SAIC Infineon Automotive Power Modules Co, Ltd.), a joint venture between SAIC Motor and Infineon, a Germany-based semiconductor manufacturer, has delivered its mass produced IGBT (Insulated Gate Bipolar Transistor), a high-tech semiconductor switch that is a core element of NEV and the high-speed train. The company will invest additional nearly 10 billion yuan in NEV technology R&D in the following years until 2020. Additionally, SAIC Motor devoted much effort to developing intelligent connectivity technologies. It collected some of the most advanced technologies and resources in the world, and formed partnerships with many famous domestic and foreign companies such as China Mobile, Huawei, Wuhan KOTEI Informatics Co, TTTech and Mobileye to speed up R&D in the intelligent engine control unit (i-ECU), high-precision map, vehicle-to-everything (V2X) communications and the 5G internet car.

SAIC Motor also accelerated innovation in its business models. It launched Xiangdao, a platform for mobility services, to tap into the online car-hailing market and witnessed a million orders within one and a half months since the platform’s operation. Anji Logistics, the largest of its kind worldwide,purchased TNT Hoau, one of China’s top logistics companies, to build an urban express logistics platform. Moreover, the company has been developing financial services by extending the scope of its financial, equity investment and insurance businesses. It established SAIC GMF, a financial leasing company, to explore the vehicle finance lease market together with its Anji Leasing. In terms of equity investment, four of the companies that SAIC Capital, an investment company owned by SAIC Motor, has a stake in, were listed last year. SAIC Motor also established a diversified financial company in Indonesia to provide financial support for the country's vehicle sales, the first step that SAIC Motor has made in developing overseas financial businesses.

Faced with the slowdown of the domestic auto market, SAIC Motor will keep opening up itself and promoting international cooperation to meet its four new targets, to ensure steady economic growth and an improved economic state, drive the innovation and transformation of the company and create more value for consumers and its shareholders.

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