On January 24th, Chinese automotive leader SAIC Group released its performance forecast for 2024, expecting a nearly 90% decrease in net profit compared to the previous year, with a non-GAAP net loss of up to 6 billion Chinese yuan (RMB). Another state-owned car company, BAIC Blue Valley, anticipates a net loss of at least 6.5 billion yuan for the year 2024, marking a total loss of 29 billion yuan over the past five years.
SAIC Group, also known as Shanghai Automotive Industry Corporation, announced its performance forecast for 2024 on January 24th. Due to the decline in the Chinese fuel vehicle market and intensifying price wars, this state-owned large-scale automotive enterprise experienced a significant downturn in its performance.
According to the announcement, SAIC Group expects its net profit attributable to the parent company’s owners for 2024 to be between 1.5 billion and 1.9 billion yuan, a decrease of 87% to 90% compared to the previous year. The net profit, excluding non-recurring gains and losses, is expected to incur a loss ranging from 4.1 billion to 6 billion yuan, a decrease of 141% to 160%.
Specifically, in 2024, SAIC Group’s wholesale sales volume of vehicles was 4.013 million units, a decrease of 20.07% compared to the previous year. The decline in the fuel vehicle market and price wars led to a decrease in sales revenue and a decline in gross profit. Additionally, SAIC General Motors Corporation and its subsidiary companies made provisions for asset impairment, expecting a decrease in net profit of approximately 7.874 billion yuan.
On the same day, BAIC Blue Valley New Energy Technology Co., Ltd. released its performance forecast, expecting a net loss ranging from 6.5 billion to 6.95 billion yuan for 2024, which is a 20.37% to 28.7% decrease from the net loss of 5.4 billion yuan in the same period last year.
The announcement cited that the main reasons for the losses include intensified competition in the new energy vehicle industry and profit margins being squeezed due to price wars. Despite the company’s continuous efforts in technological research and development, product upgrades, and diversification of product portfolio resulting in increased sales, economies of scale have not been fully realized, and product costs still face pressure.
Data shows that BAIC Blue Valley has sustained losses in recent years. From 2020 to 2023, the company incurred net losses of 6.482 billion, 5.244 billion, 5.465 billion, and 5.4 billion respectively. Including the forecasted performance for 2024, the company has incurred at least 29 billion yuan in losses over five years.
Public information reveals that BAIC Blue Valley is a listed company under the state-owned Beijing Automotive Group (BAIC Group). On September 27, 2018, BAIC Blue Valley became China’s first listed company in the new energy vehicle sector through a major asset restructuring.
On January 24th, another listed company under BAIC Group, Beiqi Foton Motor Co., Ltd. (Foton Motor), also announced its performance forecast for 2024.
According to the announcement, Foton Motor expects to achieve a net profit of around 70 million yuan in 2024, a decrease of approximately 92% compared to the same period last year; after deducting non-recurring gains and losses, the net profit is expected to incur a loss of 175 million yuan, a reduction of 139% year-on-year.