Top 10 Car Manufacturers: SAIC Motor Corporation

#9: SAIC Motor Corporation

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A brief history

SAIC (Shanghai Automotive Industry Corporation) has its origins in the Shanghai Diesel Parts Manufacturing Company which was established in 1955. The company merged with Shanghai Power Equipment Manufacturing Company in 1958 and became the Shanghai Power Machinery Manufacturing Company.

That company changed its name to Shanghai Agricultural Machinery Manufacturing Company in 1960, then to Shanghai Tractor & Automotive Industry Company in 1969. It wasn’t until 1990 that the company became known as Shanghai Automotive Industry Corporation.

After another name change to incorporate the word ‘Group’ in 1995, Shanghai Automotive Industry (Group) Corporation was reorganized in 2004 and Shanghai Automotive Co. Ltd was established – which in 2007 changed its name to become SAIC Motor Company Ltd.

The company is state-owned and is China’s largest auto manufacturer by volume, producing over 5 million cars in 2013.

It was still a relatively small company by the 1970’s but benefited from the surge in demand for passenger cars in China. The company signed a joint venture agreement with Volkswagen, and in 1985 the Shanghai Volkswagen Automotive Co. Ltd was established, which allowed it to produce competitive cars with foreign technology. In the decade that followed, SAIC grew quickly and production increased ten-fold to 300,000 units per year, establishing the company as one of China’s leading automakers.

During that period, at the behest of the Shanghai Municipal Government, SAIC effectively built a modern automotive supply chain in Shanghai from the ground up. Cars were initially built from knock-down-kits supplied by Volkswagen, but quickly became vehicles built from parts produced locally in Shanghai, and between 1990 and 1996 the city more than doubled its contribution to the national output of automotive parts.

In 1998 SAIC entered into a second joint venture, this time with General Motors, under the name of Shanghai General Motors Co. Ltd. This helped SAIC’s vehicle production to double between 2000 and 2004. It also participated in GM’s acquisition of Korean automaker Daewoo, gaining a 10% stake in the newly formed GM Daewoo.

In 2004 the company assumed control of struggling Korean automaker SSangyong Motor, gaining a 48.9% ownership of the company for $500 million. While later that decade it also acquired MG Rover, after an ownership battle with another Chinese manufacturer, Nanjing Automobile, which eventually saw SAIC take control of that company as well.

In January 2009 SSanyong Motor was put into receivership by the Korean Courts, which mandated that SAIC should reduce its stake in the company, and by 2010 shares had been reduced to 10%.

In 2011 mass production resumed at the MG Motor plant in Longbridge, England, and the first MG-6 models were produced in the UK. The MG-6 was first produced in China in 2010, and in a turn-around of SIAC’s early domestic business model, was built in Longbridge from partially knocked down kits supplied from China, for sale in the UK.

CEO

Zhi Xin Chen was appointed President of SAIC Motor Corporation Ltd on 2nd June 2014. He succeeded Hong Chen, who in turn stepped up to replace the retiring Hu Maoyuan, as company chairman. He has been a director of SAIC Motor Corporation since 2008, and has previously served in several positions within the organization, including Chairman of the board of Nanjing Automobile (Group) Corporation, and Executive Vice President of SAIC Motor Corporation.

He takes leadership of the company at a prosperous time in its history, with annual sales exceeding 5 million for the first time last year. The company also posted a 17.6% increase in revenue in 2013, and a 19.5% increase in profits. SAIC has set sales targets for this year of 5.6 million vehicles, including 260,000 of its own cars under the Roewe and MG brands.

Mission

SAIC’s corporate vision is to ‘build SAIC into an automotive company with outstanding brands, brilliant employees, core competitive competencies and international operation capabilities’. Its core values include: Satisfaction from customer; advantage through innovation; internationalization in operating; and concentration on people.

Sources:

• http://www.saicgroup.com/english/company_profile/about_us/index.shtml
• http://www.reuters.com/finance/stocks/companyProfile?symbol=600104.SS
• http://www.saicmotor.co.uk/
• http://www.saicusa.com/newsrelease.do;jsessionid=323BDD3344273E7D0AD41DC1833C618A?&id=466&mid=573