Sales fell by one million units, and profits fell by more than 10 billion. What’s wrong with a Chinese automaker?
Editor’s note: This article comes from the WeChat public account “car stuff” (ID: chedongxi) , author Bear.
SAIC Group is in a “dangerous” situation.
As the largest auto sales group in China’s auto market, SAIC has maintained rapid growth for 13 consecutive years since 2006. In 2018, the group won 7 million units of sales, which is impressive in the cold winter environment of the automobile market.
However, in 2019, the “engine” of the Chinese automobile market of SAIC Group suddenly stalled. Throughout 2019, SAIC Group repeatedly adjusted its sales target, lowering the originally expected annual sales target of 7.1 million units in 2019 to 6.5 million units. It ended up with 6.238 million vehicles regrettably.
▲ SAIC Group ’s 2019 Production and Sales Express
Compared with the infinite scenery in 2018, in 2019, SAIC Group’s sales fell by 11.5% year-on-year, and fell by nearly one million units. This is the first time in 14 years that sales have declined, and revenue and profits have also declined simultaneously.
▲ SAIC Group ’s sales changes in the past 14 years (picture from Bloomberg)
The SAIC Group ’s first three quarters financial report shows that in 2019, the group ’s total operating income for the first three quarters was 585.345 billion yuan, a year-on-year decline of 13.25%. SAIC ’s performance forecast at the beginning of this year predicts that SAIC Group 201Nine-year full-year net profit was 25.6 billion yuan, a year-on-year decrease of 28.9% (current annual financial report has not yet been released).
According to the SAIC Group’s 2018 financial report, SAIC Group’s 2018 net profit was 36.009 billion yuan, which is equivalent to a decline of about 10 billion yuan in 2019 net profit.
It is true that the cold winter of the auto market continues to spread in 2019, and the switch from “National Five” to “National Six” is encroaching. More than one car company has experienced a decline in sales and revenue in this year.
But it should be noted that the overall sales of the domestic auto market in 2019 were 25.769 million units, a decline of only 8.2%, while SAIC Group’s sales volume fell by 11.5%, and the decline rate exceeded the market by nearly 3 percentage points.
▲ Operation status of domestic mainstream auto companies in 2019
Beijing Automobile Group and Guangzhou Automobile Group, the direct competitors of SAIC Group, outperformed the market despite similar sales declines. The sales volume of FAW Group and Dongfeng Motor, both of which belong to the state-owned enterprise camp, increased by 1.3% and 3.9% in 2019, respectively, and achieved a contrarian growth.
This phenomenon shows that in the process of China ’s auto market changing from an incremental market to a stock market, SAIC ’s market share is being eroded by other auto companies. Although the downturn in the market has affected SAIC, its sales have declined The core reason lies in itself.
The split of SAIC Group ’s auto sales in 2019 can be found. As the three major joint venture car companies driving SAIC Group ’s sales growth, SAIC Volkswagen has a total annual sales of 2 million vehicles, a year-on-year decline of 3.1%; SAIC GM has a total annual sales of 160 10,000 vehicles, a year-on-year decline of 18.8%; SAIC-GM-Wuling’s annual sales of 1.66 million vehicles, a year-on-year decline of 19.4%.
In the overall downward trend, it is difficult for independent brands to stand alone. SAIC Passenger Cars sold 673,000 units in 2019, down 4.08% year-on-year.
The only two bright colors in the SAIC Group’s 2019 production and sales report are new energy vehicle sales and overseas market sales. The data shows that SAIC Group’s new energy vehicle sales in 2019 reached 180,000 units, an increase of 30% year-on-year; Sales reached 350,000 vehicles, a year-on-year increase of 26%.
But helplessly, China’s new energy vehicle market and the overseas market of independent brands still belong to a niche market with less space. SAIC Group