SAIC Motor: sales surpassed 3.5 million in 2010, expecting 4 million in 2011
New brands launched for passenger cars and commercial vehicles, began reorganization to remain compe
In 2010, due to the success of the government's consumption stimulus measures and aggressive introduction of new models, the SAIC Motor's sales volume topped 3.5 million for the first time as a Chinese car maker. Its two major joint venture companies - Shanghai VW and Shanghai GM - each sold more than 1 million a year, following SAIC-GM-Wuling in the previous year, and contributed to the growth of the SAIC Motor's sales.
In 2010, SAIC Motor posted consolidated sales of 313.376 billion RMB, which is up markedly by 2.24-fold year-on-year, due to the rapid growth of the Chinese market and to the contribution of sales of Shanghai GM, which became SAIC Motor's consolidated subsidiary in February 2010.
Starting in mid 2010, SAIC Motor announced new brands for passenger cars and commercial vehicles successively. First, in 2010, SAIC-GM-Wuling announced its own passenger car brand - Baojun. Then, in February 2011, SAIC Motor launched its new commercial vehicle brand - MAXUS Datong.
SAIC Motor prepares its supply structure for new energy vehicles, saying that it will take about 20% share of the new energy vehicle market in China in 2015. In 2011, the company expects to start marketing a HEV version of its own-brand passenger car - Roewe 750.
At the end of May 2011, the group's restructuring plan was approved in the extraordinary shareholders' meeting. With this, the group's auto-parts business, service/trade business, and new energy vehicle business are consolidated under the umbrella of SAIC Motor.
Summary of major manufacturers under the umbrella of SAIC Motor
in this report
*Product brand(s) is shown in lower rows
|Shanghai Automotive Industry
|SAIC Group||SAIC Group is a state-run automotive corporation group. It is owned 100% by the State-owned Assets Supervision and Administration Commission of Shanghai Municipal Government. The SAIC Group owns SAIC Motor, which supervises the completed vehicle business, and Huayu Automotive Systems Co., Ltd., which supervises the supplier business under its umbrella.|
|SAIC Motor Corporation Limited||SAIC Motor||SAIC Motor supervises the SAIC Group's vehicle business. Its parent company, SAIC Group, holds a 72.95% share (as of December 31, 2010).|
|Passenger car manufacturer|
|SAIC Motor Passenger Vehicle Co.||Shanghai Passenger Vehicle||Shanghai Passenger Vehicle produces own-brand passenger cars. It is a wholly-owned subsidiary of SAIC Motor.|
|Shanghai Volkswagen Automotive
|Shanghai VW||Shanghai VW is an equally-owned joint venture manufacturer between SAIC Motor and VW.|
|Shanghai General Motors
|Shanghai GM||Shanghai GM is a joint venture manufacturer between SAIC Motor and GM. It is owned 51% by SAIC Motor (50% directly, and 1% indirectly) and the remaining 49% by GM.|
|Buick, Chevrolet, and Cadillac|
|SAIC-GM-Wuling||SAIC-GM-Wuling is a joint venture that produces passenger cars and commercial vehicles. It is owned 50.1% by SAIC Motor, 44% by General Motors China, Inc. (GM's headquarters in China), and 5.9% by Liuzhou Wuling Motors Co., Ltd.|
|Chevrolet Spark, Baojun (passenger car brand), and Wuling (commercial vehicle brand)|
|Commercial vehicle manufacturer|
Commercial Vehicle Co., Ltd.
|SAIC-Iveco Hongyan||SAIC-Iveco Hongyan is a heavy-duty truck/trailer manufacturer. It is owned 67% by SAIC Iveco Commercial Vehicle Investment Co., Ltd. (an investment company owned equally by SAIC Motor and Iveco S.p.A., which is under the umbrella of Fiat Industrial S.p.A) and the remaining 33% by Chongqing Heavy Vehicle Group Co., Ltd.|
|Nanjing Iveco Automobile
|Nanjing Iveco||Nanjing Iveco is a commercial vehicle manufacturer that produces trucks, vans, off-road vehicles, and special vehicles. It is a fifty-fifty joint venture between Nanjing Automobile (Group) Corporation (which is SAIC Motor's wholly-owned subsidiary) and Iveco S.p.A.|
|Shanghai Sunwin Bus Co., Ltd.||Shanghai Sunwin||Shanghai Sunwin is a midsize/large bus manufacturer. The company is jointly owned by three companies - SAIC Motor, Volvo (China) Investment Corp., and Volvo Bus Corp. It is owned 50% by SAIC Motor and 50% by the Volvo side.|
|Shanghai Huizhong Automotive
Manufacturing Co,. Ltd.
|Shanghai Huizhong||Shanghai Huizhong is SAIC Motor's wholly-owned subsidiary, which produces chassis and parts. The company used to produce heavy-duty trucks (Huizhong) and light vans (Istana), but its commercial vehicle business was transferred to SAIC Motor Commercial Vehicle Co., Ltd., a commercial vehicle manufacturer that was established in March 2011.|
|Huizhong, Istana *Production was discontinued in April 2011.|
|SAIC Motor Commercial Vehicle
|Shanghai Commercial Vehicle||Shanghai Commercial Vehicle was established on March 21, 2011 by splitting the assets of Shanghai Huizhong Automotive Manufacturing (Shanghai Huizhong), which is SAIC Motor's wholly-owned subsidiary.|
Source: Websites of each company, etc.
(Note) In this report, companies in this table are abbreviated as shown above.
In 2010, the SAIC Group sold more than 3.5 million a year for the first time as a Chinese car maker
In 2010, the SAIC Motor posted strong sales and sold more than 3.5 million a year for the first time as a Chinese car maker.
The group's sales grew because a series of domestic-demand expansion measures by the government including the reduction of the automobile acquisition tax and subsidies for low-fuel-consumption vehicles with displacement of less than 1.6L resulted in the remarkable growth of the overall market in China. In 2010, China's production and sales volume posted a record high of more than 18 million, surpassing the US to become the world's largest market for the two consecutive years.
Shanghai GM aggressively introduced new models including Chevrolet's first locally-developed model, Chevrolet New Sail as well as Buick Excelle XT and Buick Excelle GT that are based on Opel Astra. Shanghai VW also launched its first urban SUV, the Tiguan, and started marketing of the New Polo and New Octavia, which is under the Skoda brand. Due to the favorable conditions of the market, the two companies each sold more than 1 million in 2010.
On the other hand, Shanghai Passenger Vehicle, which produces its own-brand vehicles, aggressively introduced new models such as the Roewe 350 and the MG 6 Saloon to expand its lineup, increasing sales by 78% year-on-year to more than 160,000.
Sales volume of each company in the SAIC Motor
|2009||2010||Yr-on-yr growth||Jan.-May 2010||Jan.-May 2011|
Shanghai Passenger Vehicle
SAIC-GM-Wuling (only passenger cars)
|60,000||77,800||29.7%||(Note 1) 581,017||(Note 1) 557,490|
SAIC-GM-Wuling (only commercial vehicles)
|3,897||3,672||-5.8%||(Note 2) 1,797||(Note 2) 373|
Total sales volume
|Source: SAIC Group 2010 statement of account, SAIC Motor's sales volume data, preliminary production/sales volume in the period ended in May 2010/December 2010, preliminary production/sales volume in the period from January and May 2011|
|(Note) 1.||In 2010, SAIC-GM-Wuling's figure for Jan.-May 2010 is combined sales volume of passenger cars and commercial vehicles.|
|2.||In April 2011, Shanghai Huizhong discontinued production of vehicles. The figures for Jan.-May 2011 are the total sales volume from January to March 2011.|
SAIC Motor boosted its 2010 consolidated sales by 2.24-fold year-on-year as Shanghai GM, which becomes a consolidated subsidiary, contributed
In its 2010 consolidated results, SAIC Motor significantly increased its total revenues by 2.24-fold year-on-year to 313.376 billion RMB and its net profit by 2.82-fold to 22.832 billion RMB.
In February 2010, SAIC Motor newly acquired a 1% share of Shanghai GM through its wholly-owned subsidiary, SAIC Motor HK Investment Limited. Combined the 50% share that it already holds, the company owns a 51% share of Shanghai GM. With this, SAIC Motor gained control of Shanghai GM, making Shanghai GM into its consolidated subsidiary as of February 1st to include it in its financial statements.
SAIC Motor's consolidated results
|(100 million RMB)|
|2008||2009||2010||Q1 2010||Q1 2011|
Auto Parts Business
Income Before Tax
|Source: SAIC Motor's 2010/2009/2008 statement of account, Q1/Mid-term/Q3 2010 settlement of account, and Q1 2011 settlement of account.|
|(Note) 1.||SAIC Motor's financial statements are based on "company accounting rule", which the Ministry of Finance announced in 2006.|
|2.||Total Revenues: Total sales|
|3.||Operating Profit: total operating income - total expense (sales cost, selling, general and administrative expenses, and other cost) + (fair value fluctuation profit, investment gain and loss, foreign exchange profit and loss) = operating profit|
|4.||Income Before Tax: operating profit + non-operating income - non-operating expenditure = income before tax|
|5.||Net Profit: income before tax - corporate tax = net profit|
|6.||The fiscal year (western calendar) is from January 1 to December 31 of the reference year.|
|7.||Shanghai Passenger Vehicle, Shanghai GM, SAIC-GM-Wuling, and Shanghai Huizhong are consolidated subsidiaries. Shanghai GM became a consolidated subsidiary in February 1, 2010. The profit of Shanghai VW, Shanghai Sunwin, SAIC Iveco Commercial Vehicle Investment Co., Ltd. (SAIC-Iveco Hongyan's parent company) and Nanjing Iveco are reflected under the equity method.|
SAIC targets its 2011 group sales at 4 million
For 2011, SAIC Motor targets to sell more than 4 million in the entire group. As a challenge for achieving the target, the company continues to improve its capability for independent development and also intends to aggressively enhance its global management power.
Under the investment plan at the end of 2010, the company plans to invest 6,047.1 million RMB in its own-brand passenger car business and 1,178.5 million RMB in its own-brand commercial vehicle business.
2011 management challenge
|(1) To achieve sales volume of 4 million a year by responding to the market conditions|
|(2) To strengthen the cultivation of the market by joint ventures|
|(3) To improve capability for independent development. To introduce multiple models under Roewe and MG brands in order to boost the sales volume of its own brand models.|
|(4) To promote commercialization of new energy vehicles. To achieve marketing of mass-produced models.|
|(5) To improve competitiveness in the commercial vehicle segment|
|(6) To enhance global management power|
Source: SAIC Motor 2010 financial statements
Including launch of own-brand, Baojun, each company in the group enhances the passenger car business, promoting overseas expansion
Each company in the SAIC Motor successively starts new activities in the passenger car business including local development of new models and establishment of its own new brands.
In 2010, Shanghai GM introduced a Chevrolet model that has been developed locally for the first time. In addition, SAIC-GM-Wuling announced its own passenger car brand, Baojun, for the first time as a joint venture company in the SAIC Group.
Shanghai Passenger Vehicle intends to continuously introduce new models under its own brands - Roewe and MG - aggressively in 2011. The company has already started marketing the new Roewe 750 and the new MG3. In addition, under the MG brand, it introduced a mid-size fastback- MG6 Fastback - in the UK market.
Roewe brand: aggressive introduction of new models
|Roewe W5||The Roewe W5 is Roewe's first SUV model that was exhibited at the 14th Shanghai Motor Show in 2011. It is a 2WD or a part-time 4WD model. A highly-rigid separate frame is used in the body structure. When the rear seat is reclined, a cargo space as large as 1,146L is available. The model is scheduled to be launched in July 2011.|
|New Roewe 750||The New Roewe 750 is a new B-segment sedan that is launched in May 2011. It comes with a 1.8L turbo engine/a 2.5L V6 engine. The 1.8L engine comes with a 5-speed MT or an electronically-controlled 5-speed AT; the 2.5L engine comes only with an electronically-controlled 5-speed AT. When the model runs at 90km/h, the fuel economy is 6.1L/100km and 6.4L/100km, respectively.|
Source: News release on the website exclusive for the Roewe (April 22/April 28/April 18/May 11/May 20/June 10, 2011), relevant materials on the website exclusive for the Roewe, and news website in China.
MG brand: enters the UK market, also beginning marketing of the new MG3
|New MG3||The New MG3 is an A0-segment compact 5-door hatchback that is launched in March 2011. It is developed based on the latest platform, Global Zero, of SAIC Group MG UK Design Center, which was established in June 2010. The model comes with a 1.3L/1.5L engine, which is combined with the 3rd-generation e-Shift AMT, which Italy-based supplier, Magneti Marelli, produces, or a 5-speed MT.|
|MG6 Fastback||The MG6 Fastback is a mid-size 5-door fastback. The model was lined off in April 2011 at the Longbridge plant in Birmingham, the UK and was introduced in the UK market in June. It is an upgraded version, based on emission standards and collision standards in Europe, of the model designed for China, which was launched at the end of 2009. In addition, its interior and exterior are adjusted to the European style. Its body is said to be manufactured in China, but the model is said to be designed and assembled in the UK. Its UK name is the MG6 GT.|
|MG6 Saloon||The MG6 Saloon is a sports sedan of the MG6, which was launched in China in January 2011. On June 26, a line-off ceremony was held at the Longbridge plant in the UK. As is the fastback type, the model is designed and assembled in the UK. It is expected to be launched in the UK in July. Its UK name is the MG6 Magnette.|
Source: SAIC Group's news release (May 3, 2011), SAIC Motor's news release (January 14, 2011), MG's news release (December 22, 2009/March 27, 2011/June 22, 2011), relevant materials on the website exclusive for MG, and news websites in China (Note) In July 2005, Nanjing Automobile (Group) Corporation acquired the UK-based MG Rover. Then, in 2008, SAIC Motor took a 100% share of Nanjing Automobile, making it into a wholly-owned subsidiary. With this, the MG brand became one of its own brands under the umbrella of SAIC Motor.
Shanghai GM: Chevrolet's first locally-developed model is launched, export of which began to the overseas market
|In January 2010, Shanghai GM announced Chevrolet's first locally-developed model, Chevrolet New Sail. The model is a low-priced compact car that is developed based on GM's global standards by Pan Asia Technical Automotive Center Co., Ltd., which is a design/development center that is jointly established by SAIC Motor and General Motors China, Inc. (GM's headquarters in China). The model comes with a 1.2L or 1.4L engine; the fuel economy is 5.7L/100km and 5.9L/100km, respectively. In October 2010, it was exported to Chile and Libya .This is the first time that a locally-developed model of an international brand has been exported overseas.|
Source: SAIC Group's news release (January 18, 2010), SAIC Motor's news release (January 11, 2010/October 21, 2010), information from Shanghai GM's website - "New Sail"
SAIC-GM-Wuling: announces its new passenger car brand, Baojun
|In July 2010, SAIC-GM-Wuling announced its own passenger car brand, Baojun, for the first time as a joint venture company in the group. In November 2010, the company lined off the Baojun 630 (mid-range sedan), the first model developed based on GM's technology at the western plant in Liuzhou City, Guangxi Zhuang Nationality Autonomous Region. 4,597mm/1,736mm/1,462mm with a wheelbase of 2,640mm. The model comes with a 1.5L DOHC engine (max. output 81kW/5800rpm, max. torque 146Nm/4200rpm) that the company newly developed. The fuel economy is 6.9L/100km. It meets Euro IV emission standards. It is expected to be launched at the end of July 2011.|
Source: SAIC Group's news release (July 26, 2010), SAIC Motor's news release (July 22/November 20, 2010), SAIC-GM-Wuling's news release (July 22, 2010/November 24, 2010/April 18, 2011), the website exclusive for the Baojun, and news website in China
SAIC Motor and VW: strengthen their alliance on development assistance for Shanghai VW
|In April 2011, SAIC Motor and VW concluded a joint statement and a conference document on the development assistance for their joint venture, Shanghai VW. Specifically, they plan to provide development assistance for (1) C-segment high-end passenger car exclusively for the market in China, (2) electric vehicles (EVs) including own-brand models, and (3) a next-generation model that is based on VW's new platform - Modularen Querbaukasten (MQB). The two companies say that it will enhance Shanghai VW's technology and promote localization of R&D capability.|
Source: SAIC Group's news release (May 3, 2011)
In the SAIC Group, there are moves to enhance production capacity, boosting production capacity of its plants in Nanjing to 1 million
In the SAIC Group, there are increasing moves to enhance the production capacity. At the end of 2010, SAIC Motor unveiled that it would boost production capacity to 1 million in Nanjing in the next five years. The company announced that it would invest 10 billion RMB in this plan.
In addition, SAIC-GM-Wuling says that it would boost production capacity to 1.31 million in 2012. The company announced its own passenger car brand, Baojun, in July 2010. This expansion work is said to aim also at promoting its own-brand business.
SAIC Motor: to boost production capacity of its plants in Nanjing to 1 million in 2015
|At the end of 2010, the SAIC Group concluded a memorandum of understanding with the Nanjing government. The company announced that it would invest 10 billion RMB in production facilities in Nanjing to prepare the production capacity of 1 million in five years. Under the plan, Shanghai Passenger Vehicle will boost the production capacity of its own brand plant, Nanjing Pukou plant, from the current 150,000 to 300,000; Shanghai VW will increase the production capacity of its fourth plant (Nanjing Branch Office) from 100,000 to 300,000; Nanjing Iveco will boost production capacity to 300,000 (the current production capacity is unknown).|
Sources: SAIC Group's news release (March 22/December 27, 2010), SAIC Motor's news release (December 26, 2007/April 3, 2008/March 17, 2010/December 24, 2010), news website in China (Note) Some media think that, under the plan, production facilities in Wuxi City, Jiangsu Province (currently a commercial vehicle plant of Shanghai Commercial Vehicle) are included. The plant in Wuxi City is said to prepare production capacity of 100,000 by 2015.
SAIC-GM-Wuling: to boost production capacity to 1.31 million in 2012
|In June 2010, SAIC-GM-Wuling announced that it had started second-stage expansion work at its branch factory, SAIC-GM-Wuling Automobile Co., Ltd. Qingdao Branch Office, in Qingdao City, Shandong Province in order to boost production capacity from the current 300,000 to 510,000. The company also started boosting the production capacity of its headquarters plant in Liuzhou City, Guangxi Zhuang Nationality Autonomous Region at the beginning of 2010, saying that it plans to increase the capacity from the current 590,000 to 800,000 in 2012. When the entire construction is completed, the company's production capacity is expected to increase from 890,000 to 1.31 million.|
Sources: SAIC Motor's news release (June 25, 2010) and SAIC-GM-Wuling's news release (June 25, 2010)
SAIC Motor accelerates the commercial vehicle business through establishment of a new manufacturer, exhibiting the first model, the V80, at the Shanghai Motor Show
SAIC Motor is currently pressing ahead with the enhancement of the commercial vehicle segment. In March 2011, the company split its wholly-owned subsidiary, Shanghai Huizhong, to establish a new commercial vehicle manufacturer - SAIC Motor Commercial Vehicle Co., Ltd. In addition, in April 2011, it exhibited the first model under its new commercial vehicle brand - MAXUS Datong - at the Shanghai Motor Show. The model is said to be marketed as a world car.
SAIC Motor: announces a new commercial vehicle brand - MAXUS Datong
|New commercial vehicle brand||In February 2011, SAIC Motor announced a new commercial vehicle brand - MAXUS Datong - that is based on the intellectual property rights and technological platform of the MAXUS brand, which it had acquired from the UK-based LDV. Then, in the following month, the company split the assets of its wholly-owned subsidiary, Shanghai Huizhong, to establish a new commercial vehicle manufacturer - SAIC Motor Commercial Vehicle Co., Ltd. (Shanghai Commercial Vehicle).|
|First model||The new commercial vehicle manufacturer, Shanghai Commercial Vehicle, exhibited the V80 as the first commercial MPV under the MAXUS Datong brand at the 14th Shanghai Motor Show. There are two types available - a short wheelbase version (wheelbase: 3,100mm) and a long wheelbase version (wheelbase: 3,850mm). The model comes with Eco-D 2.5L diesel-powered engine, the latest engine that is based on an engine of Italy-based diesel-powered engine manufacturer, VM Motori S.p.A. It employs TDCi (Turbo Diesel Common rail direct injection) technology and meets Euro IV emission standards. In addition, based on the collision safety standard in Europe, the model adopts Energy Absorbing Body, which absorbs impact.|
|Production facilities||In May 2011, Shanghai Commercial Vehicle established SAIC Motor Commercial Vehicle's Wuxi Branch Office in Wuxi City, Jiangsu Province, which is a production plant for the MAXUS Datong brand. The company plans to line off its first model under the brand, the V80, at the end of June. The global sales of the V80 are expected to begin in and out of China at the end of August.|
|Sources: SAIC Motor's news release (February 28/March 21/April 19, 2011), SAIC Motor's 4th No. 22 notice of board of directors (January 12, 2011), SAIC Group's news release (May 26, 2011), relevant materials on SAIC Motor Commercial Vehicle Co., Ltd.'s website, and news website in China.|
|(Note) 1.||Along with the establishment of a new manufacturer, Shanghai Huizhong withdrew from the commercial vehicle business and discontinued production of completed vehicles in April 2011. Its light van brand, Istana, seems to be transferred to the new company. Details after the withdrawal of a heavy-duty truck brand, Huizhong, are unknown.|
|2.||SAIC Motor Commercial Vehicle Co., Ltd. Wuxi Branch Office was established by upgrading the Wuxi plant of Nanjing Automobile (Group) Corporation, which SAIC Motor made into its wholly-owned subsidiary in 2008. It is to prepare a production capacity of 100,000 by 2015.|
SAIC Motor plans to take a 20% share of the new energy vehicle market in China in 2015
SAIC Motor plans to take about a 20% share of the new energy vehicle market in China in 2015. Based on the national strategy that promotes the new energy vehicle business, the company will accelerate the commercialization of HEVs and EVs, and will also promote R&D and test runs of fuel cell vehicles.
As part of the commercialization, the company plans to start selling the Roewe750 in 2011, which is a HEV that it began producing at the end of 2010. In addition, it says that it will introduce the Roewe 550 PHEV and the Roewe 350 EV in 2012.
New energy vehicles planned to be introduced in 2012
|Roewe 550 PHEV||The Roewe PHEV is an independently-developed PHEV sedan that is based on the Roewe 550. It comes with a 1.5L VCT engine. The fuel economy is 2.7L/100km, which is improved by more than 50% compared to the base model. The model meets China's emission standards "China V". The company plans to begin volume production in 2012.|
|Roewe 350 EV||The Roewe 350 EV is an independently-developed A-class EV sedan that is based on the Roewe 350. As a power source, a lithium-ion iron phosphate battery is used. It takes six to eight hours to charge the battery. It takes 30 minutes or less to charge 80% quickly.|
|E1 EV concept car||The E1 EV concept car was unveiled at the 2010 Shanghai Expo and the 14th Shanghai Motor Show in 2011. It is a 3-door 4-seat 1-box car. It comes with a lithium-ion iron phosphate battery. It takes 30 minutes or less to charge 80% quickly. The company expects to start marketing of its mass-production model in 2012.|
Source: SAIC Motor's special pages for Shanghai Motor Show on its website and SAIC Motor's news release (March 9, 2011/April 19, 2010/May 20, 2011)
SAIC Motor starts reorganization in the group, consolidating its three core businesses into SAIC Motor
In April 2011, SAIC Motor announced its reorganizing plan in the group. The plan was approved at the special meeting of the board at the end of May. SAIC Motor, a listed company, supervises each company in the group, which is related to auto-parts business, service/trade business, and new energy vehicle business.
Through this reorganization, SAIC Motor will consolidate an automotive industry chain within the group, also planning to improve its capability for independent development and to promote the building of a supply structure in its new energy vehicle business.
Summary of reorganization plan
|Plan||SAIC Motor will allocate new shares to a third party, SAIC Group (parent company) and Shanghai Automotive Industry Co., Ltd. (SAIC Group's wholly-owned subsidiary). SAIC Motor will collectively consolidate assets worth 29.12 billion RMB (assessed value) of the two companies including auto-parts business, service/trade business, and new energy vehicle business.|
|Background||The Chinese government's fostering of the automotive industry. Under China's 12th Five-Year Plan (2011-2015), China targets to enhance capability for independent development in the vehicle and parts business, to save energy and respond to the environment, to improve technology for safety performance, and to promote new energy vehicles.|
|Objective||* To build an automotive industry chain that covers from purchasing and sales to logistics * To improve capability for independent development in the vehicle and parts business * To build a supply structure in the new energy vehicle, etc.|
|Method for restructuring||SAIC Motor issues 1.761 billion shares (16.53 RMB per share) to SAIC Group and Shanghai Automotive Industry Co., Ltd. With this, the two companies contribute shares and estates of companies under their umbrellas. Through this deal, SAIC Motor consolidates the two companies' three core businesses within the group under its umbrella.|
|Assets to be restructured||Shares of the 20 companies under the umbrella in the auto-parts business, service/trade business, and new energy vehicle business, land-use rights and buildings, estates including related facilities, franchise rights, trademark rights, patent rights and shares of China Merchants Bank.|
Source: SAIC Motor extraordinary notice (April 6/May 12/May 28, 2011), SAIC Motor's news release (May 31, 2011), China's Outline of the 12th Five-Year Plan (officially announced on March 16, 2011)
Significance of restructuring of three businesses in the reorganization plan
|Effect and significance of restructuring||* Consolidation of automotive industry chain * Promotion of simultaneous development of vehicles and parts. By sharing information in the vehicle and auto-parts businesses, the company reflects the diversifying market needs to development of products fast. * Improvement of capability for independent development. * By utilizing the experience of companies to be restructured on alliances with global suppliers, the company secures competitive edge in the market.|
|Major companies to be restructured||Huayu Automotive Systems Co., Ltd. (Note 2), Nanjing Tooling Co., Ltd., a supplier for commercial vehicles under the umbrella of DONGHUA Automotive Industrial Co., Ltd.|
|Service and Trade Industry (Note 1)|
|Effect and significance of restructuring||* Integration of services including purchasing, sales, and logistics in the vehicle and auto-parts businesses. The company expects effects including cost reduction, speed-up, ensuring safety, etc. * Improvement of existing sales/service network, consolidation of the entire service/trade and expansion of business. * Improvement of company's total competitiveness.|
|Major companies to be restructured||Anji Automotive Logistics Co., Ltd., Shanghai Automotive Group (Beijing) Co., Ltd., Shanghai Automotive Industry Sales Co., Ltd., Shanghai International Auto Parts Sourcing Center, China Automotive Industry Investment & Development Company, Shanghai Automobile Import & Export Co., Ltd., Shanghai Automotive Assets Management Co., Ltd., and companies under the umbrella of DONGHUA Automotive Industrial Co., Ltd., which is in charge of Service and Trade Industry.|
|New energy vehicle business|
|Effect and significance of restructuring||* Building of a supply structure in the new energy vehicle business. * To secure competitive edge in the new energy vehicle market in and out of China.|
|Major companies to be restructured||Sunrise Power Co., Ltd., Huayu Automotive Systems Co., Ltd. (Note 3)|
|Sources: SAIC Motor extraordinary notice (April 6, May 12, and May 28, 2011) and SAIC Motor's new release (May 31, 2011)|
|(Note) 1.||Service and Trade Industry: sales, lease, information service, international trade, etc.|
|2.||Huayu Automotive Systems Co., Ltd. is a supervising company under the umbrella of the SAIC Group for suppliers that deal with interior/exterior parts, assembly parts, heat processed parts, etc. The company invests in more than 20 suppliers, building the largest supply chain in China. They supply products to multiple major car makers in China including Shanghai VW and Shanghai GM (vehicle manufacturers under the umbrella of the SAIC Motor), FAW-VW and Dongfeng-Peugeot-Citroen, Beiqi Foton, Beijing Hyundai, Dongfeng Nissan, and Chery Automobile. In addition, they export products to Europe, Korean, Australia, and Southeast Asia.|
|3.||Sunrise Power Co., Ltd. mainly does R&D for and manufactures a proton exchange membrane fuel cell (PEMFC) and its related parts. In addition, Huayu Automotive Systems Co., Ltd. also produces eco-friendly products including drive motor and electric steering, and start/stop system.|
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