Alternative: Q1 Performance of BAIC Motor Heralded Full Growth
On April 21, 2016, BAIC Motor Corporation Limited ("the Group" for short) announced its sales performance in Q1. Performance data indicated that Q1 had achieved the total revenue of RMB 24.8 billion yuan, 30.3% YoY, in particular three series under Beijing Brand, namely Senova, Beijing and Wevan selling nearly 97,000 units, 14.55% YoY; Beijing Benz sold nearly 70,000 units, 42.7% YoY; Beijing Hyundai witnessed roughly the same sales as the last year, but had two black horses as well-the Elantra-Lingdong's sales more than 10,000 units in the debut month and the All new Tucson's monthly sales over 15,000 units. Such performance has shown a strong sign that, in this era of complete restructuring, BAIC Motor is seeing the full growth of both proprietary brands and joint-venture brands. The details are indicated as follows:
Proprietary Brands: Being Fully Restructured with the Advent of E+S Strategy
"As two major growth points on the Chinese market, E (new-energy electric vehicles) + S (SUV) strategy will guide the development of BAIC Motor's proprietary brands in 2016." Said Li Feng, BAIC Motor's president. Under this strategic guideline, BAIC Motor will more quickly prioritize the following models: First, new-energy models such as EX200 (the first electric SUV ever in China), EU260 serving both individual and taxi users, upscale MPV EH400 have been put into operation, and would be released soon according to the plan. These cars will help BAIC Motor make a long-term deployment on the new-energy vehicle market and secure its strong benefit growth point. On the other hand, SUVs will make up a whole portfolio: Since Senova X55 and X25 are available now, X35 will enter into the market very soon, so that the three can besiege the A0-A SUV market. And further, X35 is very likely to be another over-10000-unit-sales model. In this way, BAIC Motor's layout in proprietary SUVs will go further.
BAIC Motor, while deepening E+S car matrix, also restructured its capacity: reforming production lines at Beijing Base, Zhuzhou Base and Guangzhou Base, so that conventional vehicles and new-energy vehicles can be manufactured on the same stage within the same plant. At present, all the three bases have achieved the above double-line production with strong capacity. As Zhuzhou Base and Phase II Project of Guangzhou Base would be completed and put into service soon, E+S strategy will go further.
Undoubtedly, the above series of strategic deployment in products and capacity has allowed E+S strategy to produce considerable benefits in Q1. According to the announced performance, BAIC Motor's E+S models accounted for 47.1%, much higher than the last year (16.1%): the ratio of new-energy models rose from 6% to 6.3%; that of SUVs rocketed to 40.8%, over four times larger than the last year (10.1%), thus going well beyond categories like sedans. Put it another way, SUV became BAIC Motor's best-selling car on the market.
Such upsurge and quick ratio adjustment spawned numerous star cars, including D20 platform-based Senova X25 whose over-10000-unit-sales topped the list of domestic A0 electric-powered sedans several times, Senova X55 with sales amounting to 14,000 units in 80 days. Once the group-wide product family got restructured, sedans gradually give way to SUVs and new-energy vehicles in sales, which optimized the overall marginal effect. As a result, BAIC Motor's autonomous brands segment grew very much in Q1. As E+S models densely entered into the market and the bases showed fast-growing capacity, BAIC Motor will, in the months to come, witness more obvious results of such restructuring and upsurge in its performance.
To further intensify profitability and deepen E+S strategy layout, BAIC Motor will increase its shares in BAIC BJEV to further stretch its business chain in the new-energy vehicle segment. This attempt will boost new-energy vehicles and further reinforce the company's future profitability.
Joint-Venture Brands: Beijing Benz Topped the List While Beijing Hyundai Rebounded High
The performance data showed that, Beijing Benz maintained robust growth-sales about 70,000 units, 42.7% YoY, getting the second place of deluxe car brands in China. Such fast growth made Daimler Group obtain the best sales ever in Q1 and March, but even enabled Benz to recover the global best-sales laurel far beyond BMW and Audi. This hard fact also proved that, BAIC-Daimler cooperation would influence so much the Chinese deluxe car market and even the global sector.
In addition, in early 2016, BAIC Motor and Fujian Motor Industry Group Co., Ltd. (FJMG) entered into a cooperation agreement, which conveys the BAIC Motor's intent of receiving transfer of FJMG's 35% shares of Fujian Benz. If this agreement could succeed, BAIC-Daimler cooperation would go much deeper, so that Beijing Benz will take on a new look with passenger vehicle and multi-purpose vehicle (MPV). In this way, Mercedes Benz will get a clearer picture and thus grasp upscale MPVs, which turns out another growth point. Now that the product family got restructured with increasing SUVs and fledging brand-new E-class, Beijing Benz will have much higher sales, which may contribute greatly to the deluxe brand's global sales.
Beijing Hyundai, another joint-venture brand, also went uphill on the whole. In the early period, Beijing Hyundai showed decreasing sales due to the replacement of old models with new ones. But as new brand-new models such as brand-new Elantra-Lingdong emerged, Beijing Hyundai witnessed rebounded sales, thus recovering the sales of 100,000 units in March. This piece of good news also marked the inventory-sales ratio returned to normal; in particular, brand-new Elantra-Lingdong sales exceeded 10,000 units in the first month of marketing. And as the D (mid-size and luxury cars) +S (SUV) strategy went deeper and brand-new landmark All new Tucson made its debut with 15,000 units, Beijing Hyundai's D+S models had arrived at a higher ratio of the total in Q1, 55% YoY. It is believed this giant leap will make Beijing Hyundai achieve the 60% D+S sales objective in 2016, but improve its overall profit as well.
"Withdraw with Accumulated Energy, then Unleash the Potential." A superb boxer may apply this strategy on the arena. Likewise, BAIC Motor also follows such strategic deployment. Deeping E+S strategy layout of its autonomous brands, intensifying overall restructuring, Beijing Benz's optimizing product portfolio, getting a clearer picture of "Great Mercedes Benz and car renewal of "Beijing Hyundai"-all these will unleash BAIC Motor's potential to put it on the fast track of growth.
End of Press Release