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Automotive News China, 18th May, 2010

Shanghai Automotive Industry Corp. (SAIC）was the largest Chinese motor vehicle manufacturer last year by revenue. The company reaped a total of 404.9 billion yuan ($59.3 billion) in revenue in 2009, according to a list jointly released by China Machinery Industry Federation and China Association of Automobile Manufacturers. 

China FAW Group Corp. and Dongfeng Motor Co. ranked second and third on the list while, of the 30 largest motor vehicle makers last year, four solely make motorcycles and five are commercial vehicle manufacturers only.

Except for Sinotruck, Wangxiang and Chery, the other companies among the 10 largest motor vehicle makers have joint ventures with global automakers.

China’s largest 30 motor vehicle makers in 2009 (million yuan):

[Source: Automotive News China/China Machinery Industry Federation]

China Watch SAIC Group

Gasgoo.com/Reuters, 29th April, 2010

SAIC Motor Corp., China’s biggest automaker, posted a more than quadrupling in first-quarter net profit, as Beijing’s policy support continues to draw buyers into showrooms in the world’s largest car market.

SAIC Motor, which runs vehicle manufacturing ventures with General Motors and Volkswagen, is a major beneficiary of Beijing’s stimulus measures, including tax incentives for small cars.

Analysts are upbeat about SAIC Motor’s outlook on continued solid demand, especially in China’s smaller cities, which could drive up industry-wide car sales by one-fifth in the Chinese market this year.

“At the begining of the year, many people expected car sales to slow after breakneck growth in 2009, but there is no sign the momentum is losing steam,” said Zhang Xin, a Beijing-based analyst with Guotai Junan Securities.

“China car sales in the third quarter and second half won’t match the 76 percent growth in Q1 as the year-ago comparative base gets higher, but they will still be solid.”

SAIC Motor did not give earnings guidance for the second quarter or full year in a brief stock exchange filing on Wednesday. January-March net profit was 2.88 billion yuan ($421.7 million), its biggest quarterly earnings ever. The result was largely in line with an average forecast of 3.1 billion yuan from three analysts surveyed by Reuters.

The automaker had said earlier this month its first-quarter profit had more than quadrupled from 626.9 million yuan in the same quarter last year. Before the results, SAIC Motor shares closed up 2.9 percent, better than a 0.3 percent fall in the benchmark index .SSEC. The stock has dropped 26.9 percent so far this year versus an 11.5 percent fall in the wider market.

[Source: Gasgoo.com/Reuters]

[Editor's Note: Click here for a graphic on China car sales]

China Watch SAIC Motor

Ash Sutcliffe, China Car Times, 12th April, 2010

Pictures of a future MG3 were released onto the Internet earlier today, sparking rumours of possible engine combinations for the MG3 which will officially be on show at Auto China 2010 in Beijing later this month and will probably go into production during the summer.

The Roewe 350 went into production last month at the former Nanjing-MG factory ahead of its launch later this month and is expected to sell very well against other competitors both domestic and foreign.

Prior to the takeover of Nanjing MG, SAIC Motor were busy working on their own B-segment car which was codenamed S261 but later renamed the ZP11 and given the MG logo – that’s the MG3 shown here. The A-pillar looks quite similar to the Skoda Fabia, whilst the rear C-pillar is similar in style to the current Suzuki Swift’s rear end. The front end certainly has the same styling theme as the new MG6.

The MG3 does look very similar to the Fiat Punto in these pictures, which might indicate some Punto genes within its DNA. A number of unmarked Fiat Puntos were spotted testing near SAIC Motor’s facilities late last year and that prompted rumours that the MG3 might be Punto-based.

Engine power will initially come from a 1.5T producing 78Kw/6000rpm and 135Nm of torque at 4000rpm, which will make it quite a potent little car. Another 1.3L engine is also in development, as the MG3 SW’s 1.4L block is considered too old to be taken seriously in any new car. A 5 speed manual and also a new style Multimode stepless automatic box will be made available for the MG3, but we won’t see any DCT tech on this car according to the Chinese press.

[Source: China Car Times]

[Editor's Note: Motoring Journalist Adam Sloman of SkyBlue Freelance has now drawn our attention to these images of the MG ZERO Concept which will be officially unveiled at Auto China 2010 in Beijing later this week.

Hopefully, the production version of MG's new B-segment contender (which we still expect to be called the MG2) will look more like the MG ZERO Concept than the earlier renderings...]

China Watch MG ZERO Concept, MG3, Roewe 350, S261, SAIC Motor, ZP11

Gasgoo.com/Reuters, 9th April, 2010

SAIC Motor Corp, China’s biggest automaker, said on Friday its first-quarter net profit rose to more than four times from the year-ago result while March vehicle sales jumped 58 percent from a year earlier, boosted by Government steps to bolster car purchases.

SAIC, which runs car manufacturing ventures with General Motors and Volkswagen, gave no figure for its estimated first-quarter financial results, but said it posted a first-quarter net profit of 626.94 million yuan ($91.9 million) in the year-ago period. The company is scheduled to release its full first-quarter earnings report on April 28.

Its March vehicle sales rose to 336,387 units, while sales for the first quarter were up 64 percent from a year earlier at 891,795 units.

The company, which aims to sell more than 3 million vehicles this year after a 57.2 percent surge last year to 2.73 million, has benefited from Government incentives aimed at bolstering the industry and encouraging purchases of fuel-efficient automobiles.

SAIC said on Thursday that it also plans to roll out its first self-developed hybrid car this year, followed by a plug-in hybrid car in 2012.

China overtook the United States last year as the world’s largest auto market, with sales surging 53 percent as most major global markets continued to struggle with the fallout of the financial crisis. Sales continued to rise at a brisk pace in the first two months of this year.

Analysts have forecast strong profit growth for SAIC this year, bolstered as well by consolidating its previous 50-50 joint venture with General Motors on its books after boosting its stake to a majority.

[Source: Gasgoo.com]

China Watch SAIC Motor

Automotive News Europe/Reuters, 1st April, 2010

SAIC back in profit...

SHANGHAI (Reuters) — SAIC Motor Corp., China’s biggest automaker, returned to profit in the fourth quarter as policy incentives bolstered automobile demand in the world’s fastest growing major auto market.

SAIC, which runs vehicle manufacturing ventures with General Motors Co. and Volkswagen AG, is a major beneficiary of Beijing’s policy support, which had helped push its auto sales to record levels.

Analysts are unbeat about SAIC’s outlook for 2010 due in part to its newly gained status as the majority owner in its formerly 50-50 car venture with GM.

The deal, approved by regulators recently, allows the Chinese automaker to consolidate all the net profit made at the venture onto its balance sheet, instead of 50 percent previously.

For the full-year, net profit jumped to 6.59 billion yuan, beating an average forecast of 6.17 billion yuan from 7 analysts polled by Thomson Reuters I/B/E/S. The automaker itself had in January projected a more than 900 percent jump in its 2009 earnings.

“From the start of 2010, SAIC vehicle sales maintained its growth momentum, along with the continued launch of new models,” the automaker said in a statement on Thursday.

SAIC earned 2.62 billion yuan during the October-December quarter, according to Reuters calculations, compared with a net loss of 1.57 billion yuan a year earlier.

For the full-year, net profit jumped to 6.59 billion yuan, beating an average forecast of 6.17 billion yuan from 7 analysts polled by Thomson Reuters I/B/E/S. The automaker itself had in January projected a more than 900 percent jump in its 2009 earnings.

Shares in SAIC rose 3.1 percent on Thursday ahead of the results. They fell about 19 percent in the first quarter, underperforming the Shanghai Composite Index, which lost around 5 percent.

Solid sales ahead

China, which overtook the United States as the world’s biggest auto market last year, has been a major bright spot amid a global industry downturn thanks to Beijing’s stimulus measures, including aggressive cuts in sales tax for small cars.

SAIC sold 2.73 million vehicles in 2009, up 57.2 percent, with its market share in China rising 1.4 percentage points to 19.9 percent. Sales of its two foreign partners, GM and Volkswagen, also hit records.

It aims to sell more than 3 million vehicles in 2010, with turnover this year expected to reach 245 billion yuan, up from 139.6 billion yuan in 2009. In the first quarter, SAIC said its vehicle sales exceeded 890,000 units, up more than 60 percent from a year earlier.

The Shanghai-based automaker aims to sell 3 million vehicles this year, its Chairman Hu Maoyuan has said, in line with slower but still healthy 10 percent growth of the overall market.

It will be another good year for SAIC. The market remains solid and, as a controling shareholder, it can now consolidate all Shanghai GM’s earnings to its own books.” Zhang Xin, an Analyst with Guotai Junan Securities.

“It will be another good year for SAIC. The market remains solid and, as a controling shareholder, it can now consolidate all Shanghai GM’s earnings to its own books,” said Zhang Xin, an analyst with Guotai Junan Securities.

SAIC is among a growing number of Chinese automakers, including Zhejiang Geely Holding, which signed a deal over the weekend to take over Ford Motor Co.’s Volvo car unit — hoping to make their name globally.

It became the owner of MG Rover’s 10,000-unit Longbridge plant in Birmingham, central England after a merger with its much smaller peer Nanjing Automobile Group in late 2007.

The automaker, which rolled out its first-self made sedan, Roewe 750, based on acquired technologies in March 2007, is now virtually the only Chinese automaker that has made in-roads in the lucrative medium-to-higher end segment, still dominated by foreign brands.

[Source: Automotive News Europe]

China Watch Hu Maoyuan, Longbridge, MG Rover, Nanjing Automobile (Group) Corporation, SAIC Motor

Automotive News Europe, 4th December, 2009

SHANGHAI (Reuters) – General Motors will sell a 1 percent stake in its existing China venture with partner SAIC Motor for about $85 million, giving China’s top carmaker control and allowing it to consolidate the venture’s accounts onto its balance sheet.

GM and SAIC Motor also announced that they will make small cars and commercial vehicles in India, taking their 12-year partnership into one of the world’s fastest-growing auto markets.

“We have had a successful relationship with them for 12 years,” Nick Reilly, the outgoing President of GM’s International Operations, told reporters on a conference call on Friday. “It seems to us very sensible and a big opportunity to broaden that relationship outside China.”

The 50:50 India venture, in which SAIC Motor will invest cash and GM will inject existing Indian assets, aims to sell 225,000 vehicles a year in the next couple of years, Reilly said.

SAIC makes its move

For SAIC Motor gaining control of the China venture and an equal say with GM in India could be a stepping stone to its ambitions of being a global player in an autos market that has suffered one of its deepest downturns in memory.

“India is a test case of SAIC’s ambition for overseas expansion, and it may further expand into Southeast Asia when the time is right,” said Johnny Wong, Auto Analyst at Yuanta in Hong Kong.

The GM-SAIC Motor partnership is one of the most successful tie-ups between a foreign and local automaker in China, helping both companies in a fiercely competitive market where they vie with Volkswagen AG, Toyota Motor Corp. and Ford Motor.

“It seems to me that SAIC’s status in the tie-up is obviously rising,” said Qin Xuwen, an Analyst with Orient Securities. “The tide has started to turn. They are equal partners now.”

GM India said its U.S. parent would collaborate with SAIC Motor to develop and make commercial vehicles and other products both for India and for export, mainly to emerging markets.

“It looks like GM is leveraging all its contacts across the globe to expand in fast-growing markets, and for SAIC it gives them a ready market into the fourth-largest commercial vehicle market,” said Ian Fletcher, London-based Auto Analyst at IHS Global Insight.

The India collaboration, which should be finalized soon, would have access to mini-commercial vehicles and other products from GM’s venture in China, and would vie with local automakers such as Tata Motors Ltd. and Mahindra & Mahindra.

Shortcut to goal

For years, Chinese automakers have been churning out foreign brands through local tie-ups with VW, Toyota and others or have focused their own production on basic and cheap models aimed only at the fast-growing domestic market.

Snapping up assets from distressed auto giants offers them a shortcut to global markets and helps them raise both their technical expertise and their profile.

The deals with SAIC Motor come as GM has opted to retain and turn around its Opel operations in Europe in a restructuring estimated to cost about 3.3 billion euros, reversing a decision to sell a controlling stake in the unit.

GM had a cash hoard of nearly $43 billion at end-September thanks to $50 billion of U.S. Government support that has made the U.S. Treasury a 61 percent owner, but the company has made it a priority to repay debt to U.S. taxpayers quickly, possibly as early as June.

Earlier this week, GM’s CEO Fritz Henderson abruptly resigned after the company’s board decided the automaker needed to push its restructuring faster under new leadership.

On Thursday, SAIC Motor suspended trading in its shares on the Shanghai market pending an announcement on what it called a “major asset restructuring.”

SAIC Motor President Chen Hong has previously said the company was very interested in entering the Indian market and listed it as second in terms of potential after China.

There is very little Chinese presence in the Indian auto sector. There are a number of ventures between Chinese and Indian firms making electric two-wheelers, but these are tiny.

Bilateral trade between India and China has grown in recent years but New Delhi, worried about security risks, has taken steps to regulate the entry of Chinese investments and workers.

Key market

China’s auto market has been a major bright spot this year amid a steeper-than-expected global industry downturn, thanks to Beijing’s stimulus measures, which have significantly bolstered consumer confidence. GM has been one of the biggest beneficiaries.

January-October sales at GM’s Shanghai venture with SAIC Motor rose 46.5 percent to 548,707 vehicles. The decade-old flagship venture with SAIC Motor sells passenger cars under the Cadillac, Buick and Chevrolet brands.

GM in its global restructuring opted to retain Buick due to its popularity in China while it was closing or selling other units such as Saab, Saturn and Hummer. The China results are in contrast to GM’s home market, where sales fell 32 percent through November to about 1.9 million vehicles.

In a sign that Beijing Automotive Industry Holding Corp (BAIC) might still be keen to buy GM’s Saab unit, Bank of China said it provided BAIC with a 20 billion yuan ($2.9 billion) line of credit. The Beijing-based carmaker has said it might still be interested in Saab.

GM and SAIC Motor have many other joint ventures in China as well, including an automotive finance firm modeled after GMAC and a three-way commercial vehicle tie-up with Lizhou Wuling Automobile. GM’s joint ventures in China sold a combined 1.46 million units through the first 10 months of 2009.

[Source: Automotive News Europe/Reuters]

China Watch Chen Hong, General Motors, Nick Reilly, SAIC Motor, Shanghai GM

Automotive News Europe, 3rd December, 2009

SHANGHAI (Reuters) – Volkswagen AG and General Motors Co. partner SAIC Motor, China’s biggest automaker, said on Thursday it suspended its trading on the Shanghai Stock Exchange as it plans a major asset restructuring.

SAIC Motor said it would hold a board meeting before Dec. 9 to discuss the restructuring, and its shares would resume trade after the details of a planned restructuring have been announced.

The trading suspension spurred speculation that the Shanghai-based automaker was in talks with GM or other partners over their Chinese joint ventures.

VW set up 50-50 joint venture Shanghai-Volkswagen Automotive Co. Ltd. 25 years ago. The partners’ product range includes a total of 11 models ranging from the VW Polo, Santana and Touran to the Skoda Fabia, Octavia and Superb.

SAIC Motor and GM are 50-50 partners in Shanghai GM, the maker of Cadillac, Buick and Chevrolet models, while SAIC-GM-Wuling is a three-way tie-up between SAIC Motor, GM and Liuzhou Wuling Automobile, which makes popular minivans and small trucks.

GM, which currently holds a 34 percent stake in SAIC-GM-Wuling, has been seeking to increase its stake in the venture – SAIC Motor owns 50.1 percent and Liuzhou Wuling 15.9 percent.

SAIC Motor and GM have also been exploring business opportunities in India, another major auto market with great potential, SAIC Motor President Chen Hong told reporters recently. SAIC Motor’s spokeswoman declined to comment on market speculation.

GM said in a statement it was constantly holding discussions with its partner to ensure that both companies were improving and prepared for the future.

SAIC Motor’s shares have more than quadrupled this year, leading a roughly 80 percent gain on the benchmark index.

[Source: Automotive News Europe/Reuters]

China Watch SAIC Motor Corporation Limited, Shanghai General Motors Company Limited

Automotive News Europe, 23rd November, 2009

MG6

GUANGZHOU (Reuters) SAIC Motor plans to begin manufacturing its new MG6 sedan in the UK at the end of next year, the company said.

SAIC Motor became the owner of MG Rover’s 10,000-unit Longbridge plant in Birmingham, central England, after a merger with its much smaller peer Nanjing Automobile Group in late 2007 and the Longbridge factory will serve as a platform for tapping the European market, company executives have said.

“We want to make the MG6 in the UK plant at the end of next year,” SAIC Motor President Chen Hong said without providing a sales target. Chen was speaking with reporters ahead of the Guangzhou Auto Show, which opened to the public on Monday.

Chen also confirmed media reports about SAIC’s interest in taking over British light commercial vehicle maker LDV. “The reports are true. We are teaming up with a British partner for the deal,” Chen said, adding that LDV would continue to assemble vehicles in Britain using components made in China.

Chen also confirmed media reports about SAIC’s interest in taking over British light commercial vehicle maker LDV. “The reports are true. We are teaming up with a British partner for the deal,” Chen said, adding that LDV would continue to assemble vehicles in Britain using components made in China.

SAIC Motor is among a growing number of Chinese automakers, including Geely Automobile Holdings – a preferred bidder for Ford Motor’s Volvo Car unit – which hope to make their name globally.

Appeal to patriotism

SAIC Motor aims to double the sales of its own-brand cars to 180,000 in 2010, Chen said, as the Chinese automaker seeks to tap the lucrative mid- to higher-end market currently dominated by foreign rivals.

As wealth grows in what has now become the world’s biggest auto market, many Chinese carmakers are looking to boost their profile to cater to a generally patriotic population who, if given the choice, would opt for quality local products.

“Our own-brand car sales are estimated at 90,000 units this year, way over the 2008 target of 50,000 units. We aim to double it in 2010,” Chen said.

In March 2007 SAIC, which operates manufacturing ventures with General Motors Co. and Volkswagen AG, launched its first self-developed car, the Roewe 750, followed by the Roewe 550, popular among China’s young business elite. From now to 2010 SAIC will roll out more own-brand cars, including the MG6, which was unveiled to the press on Sunday. Sales may rise to 500,000 units in the foreseeable future despite the challenge of locally made foreign brands.

From now to 2010 SAIC will roll out more own-brand cars, including the MG6, which was unveiled to the press on Sunday. Sales may rise to 500,000 units in the foreseeable future despite the challenge of locally made foreign brands.

“We are trailing a difficult path and there is still a lot of hard work to do. We would never dare to say that we have achieved success,” Chen said.

SAIC Motor currently has about 240 dealers in first- and second-tier cities in China and intends to step up its presence in smaller cities, executives said.

2.65M target

The Chinese car market has been a major bright spot amid a global industry downturn thanks to Beijing’s policy incentives, including cuts in its sales tax for small cars, which have bolstered demand.

SAIC Motor, a major beneficiary of the incentives, expects to sell over 2.65 million vehicles this year, up sharply from 1.83 million in 2008, Chen said. He expects the Government to continue to support its auto industry, a major growth engine for the country’s economy.

Chen added: “In the past year car sales in third- and fourth-tier cities have significantly outpaced the growth in first- and second-tier cities, while in big cities a car is no longer a luxury item. I expect the auto market to continue to grow at a fairly rapid level. We are full of confidence for 2010.”

[Source: Automotive News Europe/Reuters]

China Watch Chen Hong, Guangzhou Auto Show, LDV, Longbridge, MG6, SAIC Motor

George Gao, Gasgoo.com, 26th October, 2009

SAIC Motor took top slot among Chinese automakers in terms of vehicle sales both in September (with 260,000 units) and in the January-September period (with 1.94 million units), Xinhua News reported today.

China’s auto sales hit a monthly high of 1.33 million units in September, up 77.88% from a year earlier, according to the China Association of Automobile Manufacturers. The combined sales of the top 10 automakers, led by SAIC Motor and FAW Group, reached 1.13 million units, taking up 85% of China’s total.

In the first nine months, the country’s auto sales went up 34.24% from the previous year’s same period to 9.66 million units. The combined sales of the top 10 car companies amounted to 8.21 million units during the nine months, accounting for 85% of China’s total.

SAIC Motor’s sales in September rose 90.7% from a year earlier to 260,000 vehicles. Sales of passenger cars totalled 150,000 vehicles, with sales at Shanghai GM edging up 99% to 71,000 units and Shanghai VW up 83% to 70,000 units. Sales of its own brand vehicles soared 109% to 9,000 units.

SAIC Motor’s sales in September rose 90.7% from a year earlier to 260,000 vehicles. Sales of passenger cars totalled 150,000 vehicles, with sales at Shanghai GM edging up 99% to 71,000 units and Shanghai VW up 83% to 70,000 units. Sales of its own brand vehicles soared 109% to 9,000 units.

In the commercial vehicle sector, SAIC Motor’s September sales rose 91% to 103,800 units, with SAIC-GM-Wuling and Nanjing IVECO each selling 95,000 and 8,800 vehicles, up 97% and 72%, respectively.

SAIC’s sales for the third-quarter rose 92% to 720,000 vehicles and sales for the first nine months climbed 47% to 1.94 million units, exceeding the company’s full-year sales of 2008.

[Source: Gasgoo.com]

China Watch SAIC Motor

George Gao, Gasgoo.com, 13th October, 2009

Chinese auto giant SAIC Motor said today that its net profit in the first nine months surged more than 70% from a year earlier, propelled by strong sales, Reuters reported.

SAIC said its car sales grew 47% year-on-year to 1.94 million units in the first nine months of this year. September sales soared 90.7% from a year earlier to over 260,000 units. The company will release detailed earnings results for the third quarter later this month. It reported a net profit of 2.23 billion yuan ($327 million) for the January-September period of last year.

China’s auto market, which overtook the United States as the world’s largest in January, has been a leading bright spot in the struggling global auto industry as Government policy support spurs a pick-up in demand. SAIC and its foreign partners, General Motors and Volkswagen AG, have benefited significantly from the incentives, including an aggressive cut in the sales tax on small cars and subsidies for buyers in rural areas.

Analysts are upbeat about SAIC’s full-year outlook due to robust auto demand and a low comparative base in 2008 when the automaker was bogged down by its loss-making South Korean subsidiary SsangYong Motor.

[Source: Gasgoo.com]

China Watch General Motors, SAIC Motor, SsangYong Motor, Volkswagen AG