2014 Targets

SAIC: 2014

SAIC 2014 sales target of about 5.62 million, an increase of 10%; Among them:

• Shanghai Volkswagen 1.68 million, an increase of 10.2%,
  
• Shanghai GM 1760000, an increase of 12.1%,
  
• SAIC own brand 265,000, an increase of 15%,
  
• SAIC-GM-Wuling 1.7 million, an increase of 6.3%.
  

 2014 is expected to steadily launch new models, and the SUV-based company in 2014 will be the new model will be based SUV, which mainly include: Buick New Intermediate SUV (Anthem), Chevrolet compact SUV Trax, as well as its own brand MG will have a new compact Type SUV; main models addition, the company is expected to launch in 2014 include: Shanghai Volkswagen A + grade compact sedan, the new Cruze, Cadillac ATS, etc..


Its own brand in 2014 is expected to cut its losses, a significant improvement in 2015 over 2013, the company independent brands operating loss of about three quarters of 290 million yuan, we expect full-year loss by about 3 to 400 million yuan; 2014, the brand if completion of the 15% growth target, we expect the loss rate will be reduced to less than 200 million; addition, the company expects that by 2015, the brand both in terms of product lines or distribution channels will have a larger movement, is expected to have a significant improvement in operating conditions or Valuation: maintain a "buy" rating, target price of 18.9 yuan the company's current stock price corresponds 2014EPE about 5.4x, at the bottom of the valuation of the company's history.  Our target price is UBS VCAM model (WACC 9.7%) based on the corresponding company 2014EPE7.7x.

Chih-Hsin Chen Objective : SAIC profit seeking essay

230,000 sales is the breakeven point, after the completion of each one, that is, an increase in profits.  After successfully reaching the breakeven point, January 7, passenger cars, executive vice president and general manager Chen Zhixin SAIC SAIC Passenger Vehicle Company in a general meeting of cadres revealed: 2014 SAIC brand target profit 100 million yuan.

If successful profitable, SAIC brand will achieve profitability for the first time.  While holding a high hit build its own brand, SAIC brand from the beginning of the establishment, left the high road, and SAIC also won the first battle, pre-cycling rates exceeded 1.1 million, but as with most independent brand, SAIC still faces investment and outputs embarrassment.  Most joint ventures with local companies in foreign investment is different, technically scratch SAIC premise in R & D investment is huge, which also led SAIC brand so far failed to profit.

Shareholders' meeting at the beginning of last year, SAIC chairman Hu Maoyuan to SAIC brand is to complete the task assigned 240,000, according to his forecasts, SAIC's own brand breakeven point is 230,000, out of more than ten thousand is profit.  However, unfortunately, in 2013 SAIC brand just completed 230,000, which also makes the task last year's profit fell short of success.

Chih-Hsin Chen reflection

Dropping by the joint venture brands, the market grew slightly and consumer confidence has not yet fully establish its own brand and other factors, Chih-Hsin Chen has twice missed the target and profit.  2012 raised 10 million profit targets and raised 50 million in 2013 profit target, were not successfully completed.

SAIC brand failed to successfully complete the target for two main reasons, first, into a large, two are still needed to improve economies of scale.

R & D joint venture product platforms are implemented in the foreign headquarters, and because foreign joint ventures are global enterprises, under the cost-sharing research and development costs are significantly lower than the domestic vehicle according to the same system developed its own brand, with a joint The brand premium brand itself is higher than their own brands, the joint venture profit cycle is much higher than their own brands.

Above Automobile Group, for example, investment in own brand is huge, the technology center in 2013 with a total investment of 4.4 billion yuan fully completed, SAIC will further expand the scale of investment in technology.  According to the plan, but also the future of technology centers around the passenger-round investment, investment will be more than 20 billion.

In addition, SAIC also faces the problem of scale upgrade.  After the completion of 200,000 in 2012, SAIC own brand in 2013 was not completed on 240,000 overall goal.  For the expected sales did not materialize early, mid-level meeting on the 7th, Chih-Hsin Chen with a long speech on the SAIC brand reflection.  Dual-brand connotation SAIC brand is still not clear, resulting in double-brand Roewe and MG failed to reach; against competition from the joint venture, not fully aware of; User SAIC brand awareness still needs to be improved.

Which, in Chih-Hsin Chen seems that the most urgent need to address the concerns of consumers still eliminate its own brand, which is a common problem faced by independent brands.

Guoxin Center research report for three consecutive years is a result of research: 40% of people under no circumstances purchase their own brands, the price has nothing to do but just do not believe his own independent brand.

280,000 target by "two legs" walk

In this market environment, SAIC brand also caught up in "Growing Pains."  2012 Breakthrough 200,000 later, in 2013, SAIC plans to achieve 240,000 in one go, but the results are completed only 230,000.

As the world's top 500, SAIC 2013 sales of over 5.1 million, but only 230,000 own brand, in the total amount of seemed a bit trivial.

To achieve the profit target, sales is the foundation.  Meeting on 7 May, Chih-Hsin Chen will be targeted sales of 260,000 for the security at the end, for 280,000.  Which exports to reach 15,000.

230,000 later, as long as it continues to expand, to be able to achieve profitable investment are removed.  However, Chih-Hsin Chen faced by the domestic market is not optimistic, "fawning can not blame the consumer." Chih-Hsin Chen said.  The key is to have its own brand of consumer atmosphere.

Cater to consumers, "fawning" mentality, SAIC will curve to enhance the brand as one of the important steps.  After successfully entering the UK market, SAIC has opened up the Thai market.  Thailand is the right-hand car market, MG had a right rudder has been listed in the UK, there are ready-made products can enter the Thai market.  Thailand belong together AFTA, ASEAN has brought the price advantage of tax relief and the ASEAN recognition of the quality of the car manufacturing in Thailand, the Thai plant, MG product is expected shortly AFTA foothold.

The ASEAN includes Indonesia, Malaysia, Australia, these countries belong to the Commonwealth countries, the establishment of a joint venture plant in Thailand, not only the face of ASEAN, but also direct access to the Commonwealth countries.

Because overseas markets influence on the domestic market, in fact, "Curve bailout" has become one of many steps in Central Asia to expand sales of own-brand manufacturers.

In addition, SAIC also by digging in the official car of the market, to enhance the brand.  Before the government car models based mainly on joint venture brands, a very important reason is because the joint product is indeed better performance than their own brands.  And although the official vehicle procurement benchmark has been set its own brand, but in fact, there have been local governments are still in private procurement joint venture products through other channels.

How to make a joint product of those accustomed to using the official car market can accept independent brands, enhance their own brand products is also very important.

Dual brand is a threshold

Since 2013, including Geely, Chery included, have carried out product and brand integration, that "a Chery," "an auspicious" brand transformation.

Instead, SAIC Passenger Vehicle Company, but at the beginning of last year, double the brand a more clear "separation."  Chih-Hsin Chen through organizational structure upgrading, the Roewe and MG by different teams to operate.

Relative to other brands of contraction, Roewe and MG brands distinguish two more obvious, and continue to highlight the different British MG personality and sense of movement, the Roewe brand will completely return to self-select, and more attention to the atmosphere, technology, highlighting the Chinese classical elements.  In last year's sales in the aggregate, MG brand sales increase rapidly, reaching 40,000.

However, at the same time strengthen the dual-brand, SAIC brand also facing cost dual brand brings.  Product development to put the two brands of cars, but also dual-brand marketing operation that brought an increase in direct costs.

From the perspective of a purely business point of view, SAIC more than 20 million sales of the two brands did not need to operate, but because of the MG-South cooperation is the outcome of the integration of NAC after SAIC imported brands, more layer of "political task "mean on the inside, MG developed properly, SAIC can not explain.

This means, MG and Roewe brands will not integrate, the future trend is necessarily become ever more open, including the terminal channels will operate separately.

Two brands have developed well, hundreds of thousands achieve their sales volume, SAIC brand completed five or even one million six hundred thousand is not a dream, will bring economies of scale for the SAIC brand.  However, in the early, scattered development and marketing investment, Chih-Hsin Chen will also increase the difficulty to achieve profit targets.

In the 7th day of the conference, Chih-Hsin Chen believes SAIC still a long way to achieve profitability this year.  The premise is that SAIC Motor Company to complete, including cost reduction, market, brand and more than 30 jobs.

SAIC 2014 new car plans

Brand	Model	Category	Car Type	Expected time to market
MG	CS	Compact SUV	New model	by end 2014
MG	MG5 sedan	Compact  car	Derivative	first half 2014
MG	New MG5	Compact  car	Facelift	first half 2014
Roewe	350/550 1.5T	Compact car	New dynamic model	first half 2014
Roewe	New 750	Car	New generation	Mid second half 2014
Roewe	New 950	Car	Facelift	Mid second half 2014
Shanghai	R95	Car	New model	2014
Maxus	G10	MPV	New model	May 2014

2014 SAIC will seek independent passenger car  earnings

2013 for SAIC was a victory, every five domestic cars, at least one from SAIC.  This is the 2013 SAIC surrender the respondents.  But in fact, this giant of China's auto industry is no longer obsessed with the first sales but began the challenge to optimize the product structure, improve their own brands.

2014 will seek independent passenger earnings.  In the initial confrontation joint venture brands, after a firm foothold, SAIC passenger car brands business (SAIC Passenger Vehicle Company) will enter the second phase - earnings growth, 2014 SAIC Motor Company developed a 100 million yuan profit planning.

Has been the highlight of SAIC 2013 sold over 1.5 million in each of three joint venture.  Where two of the leading passenger car company, with annual sales of over 1.5 million of Shanghai GM, Shanghai Volkswagen; one of the cross-type passenger champions - SAIC-GM-Wuling, 2013 sales of about 1.6 million.  Compared with these brothers, SAIC passenger car brands business (SAIC Passenger Vehicle Company) was significantly smaller body, still in laying the foundation stage.

Therefore, when the company expects 2014 SAIC passenger earnings of $ 100 million news came out, arousing controversy.  SAIC's own-brand passenger car business (SAIC Passenger Vehicle Company) is significantly smaller body mass, is still in the stage of laying the foundation, in 2014 100 million yuan profit is not easy.  After all, in 2013 SAIC Motor Company has not completed the established "240,000, profit 50 million yuan," the goal.  But internal SAIC think earnings is not difficult, because after years of precipitation, SAIC passenger cars already have a very strong market competitiveness.

After doing product development, production, sale preparation, SAIC passenger cars will come out profitable battle.  General manager, executive vice president of SAIC, said Chen Zhixin Passenger Vehicle Company, 2014 SAIC company plans to sell 260,000 passenger cars, for sale 280 000, of which exports 15,000.

Morris Motors wrote:Finally they are making noises around brand awareness and, crucially, stating that MG and Roewe will further separate. So no more 350/550-style MG/Roewe mixes.