SAIC Profits Up 900%


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    SAIC Profits Up 900%

    Post by Windy on Sun Apr 04, 2010 12:29 am

    China’s Booming Car Market Takes It’s Toll: SAIC Profits Up 900%

    When you are a Chinese car company, especially one that is mostly government owned, reporting profits is not one of your prime objectives. As long as you don’t lose money hand over fist, as long as you provide jobs for many people, as long as you grow in market share and influence, having money left over is sometimes just a (taxable) nuisance. But in times like these, it’s unavoidable. And it doesn’t hurt your stock when you are a publicly traded company. Shanghai Automotive Industry Corporation, better known as SAIC, has announced that their net profit for 2009 jumped 900 percent from the previous year, reaching a record of nearly $1b ($966m, to be exact.)
    On closer look, SAIC is climbing back to normal, and then some. SAIC’s net profit for 2008 had fallen carpocalypse-related 86 percent from the previous year. Heavy losses in Ssangyong Motor, its bankrupt South Korean unit, had taken their toll. SAIC was never quite to the brink, but they definitely are back from it.

    According to AFP, SAIC’s 2009 sales volume reached 2.72m units, up 57.2 percent, making SAIC the first automaker to exceed an annual volume of 2m units in China. For this year, SAIC plans to sell more than 3m vehicles. With a combined market share of 19.9 percent, SAIC leads the highly fractionalized Chinese market by a wide margin. FAW is second with sales of 1.96m units. Dongfeng Motor is third with 1.90m units. Then, there are more than 100 additional auto makers.

    SAIC is known as the joint venture partner for China’s two most successful brands, Volkswagen and GM. GM is busy adding their own brands, so far with marginal success. In 2009, SAIC sold approximately 90,000 Roewe and MG cars. The company did not disclose profit figures on their own brands.

    In the first quarter of 2010, total SAIC sales were up more than 60 percent, in line with the market.

    In 2009, the company was already the world’s eighth largest carmaker. If its sales break 3m units, SAIC may make the world’s top 6 list. However, GM and Volkswagen will claim their share of the count, and we have to see how it works out after OICA is done counting.

    A customer looks at a MG 6 car at a Chinese automaker SAIC Motor Corp dealership in Shanghai April 1. China's economy has weathered the global economic downturn well. Perhaps their economists should be regarded more highly that those in harder-hit countries.


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