SAIC 2009 Annual Plan - Cost savings

Following the lunar new year holidays, SAIC has submitted its 2009 annual work plan.

Due to the adverse impact of the financial crisis SAIC plans to cut costs by nearly 1% of net profit and SAICs two "independent brands", MG and Roewe, are being further integrated to reduce operating costs and bring forward the achievement of profitability.

All subsidiaries are facing cutbacks of nearly 1%, rumours of 20% reductions have been dismissed.

SAIC's leaders will be taking the highest pay cuts with a reduction of at least 20% and maybe as much as 50% being expected for 2009, although most of that is likely to be reductions in bonus payments rather than basic salaries.

It is expected that other domestic auto manufacturers will be making similar announcements.

From the 170 staff at the Nanjing sales department, 100 have from February 1st, relocated to the SAIC Technology Centre at Shanghai Anting as part of the MG/Roewe integration.

Reference: http://info.auto.hc360.com/2009/02/031353301719.shtml

Windy wrote:...SAIC plans to cut costs by nearly 1% of net profit...

what is that as a % of costs? Far less than 1%, presumably. But did the original plans not include increased costs for expansion, or are these not expensed and therefore not "costs"?

patpending wrote:

Windy wrote:...SAIC plans to cut costs by nearly 1% of net profit...

what is that as a % of costs? Far less than 1%, presumably. But did the original plans not include increased costs for expansion, or are these not expensed and therefore not "costs"?

Ann MG Writer posted an article that explained it in a way thats easier to understand, although there seem to be a few things lost in translation. Her article had it as they plan to increase profits by 1% through cost cutting measures. I doubt that the investment in setting up new factories is affected.

Ann's article

Thanks Windy. I found reference to the 2007 results:

Income RMB104bn, profit 4bn, on that basis costs RMB 100bn. So on that scale 1% of profits would be less than approx 0.05% of costs? That's a rounding in the order of "the chairman doesn't go golfing one afternoon!" or "don't order any more paperclips, Enid!"

SOURCE SAIC Group http://www.saicgroup.com/english/xwzx/4897.shtml

More like the chairman has to use a Roewe 850 instead of a Merc!

Well, I believe it's only the executive vice president of Shanghai Auto in that Roewe 850 on the other thread!

Hi all
Ann's article said something about MG and Roewe already being integrated, and the changes revolving around the two divisions using the same head office and marketing in future.

streetrover wrote:Hi all
Ann's article said something about MG and Roewe already being integrated, and the changes revolving around the two divisions using the same head office and marketing in future.

Welcome to the forum streetrover



Yes, most of the marketing department has merged, Ann's article sounded like they had just moved across the road but in fact it was those 170 people that moved from Nanjing to Shanghai!

Windy wrote:...Welcome to the forum streetrover ...

what he said...