Roewe, MG Sales Teams merged To Cut Cost

Last week, SAIC's affiliated Roewe, and the sales division of Nanjing MG Auto Co., Ltd. moved out of their former offices to the building of their parent's technology center in Shanghai, said sina.com today. In its effort to cut costs, SAIC is merging the sales networks of the Roewe and MG brands.

Shanghai Automotive Industry Corporation (SAIC) plans to gain nearly 1% more profits through cutting costs in 2009, as a measure to fight against the worldwide financial crisis that started in the second half of last year. The 1% profit is not only a target set for the parent, but also each affiliate, to be achieved by by lessening expenditures, and lowering salaries of top executives.

SAIC has decided to cut down the losses of affiliated proprietary brands and enhance their profitability through unified marketing. Earlier this month, the sales and marketing divisions of Nanjing GM said they were moving out of their Nanjing offices to SAIC's technology center located in Anting of suburban Shanghai, to be merged with the Roewe sales team of SAIC Motor.

Besides, Nanjing MG will be merged into Nanjing Auto Corp, which SAIC acquired one year ago. With the MG assets as its major part, Nanjing Auto will become an important base for SAIC to develop own-brand models. In addition, the Nanjing Iveco Auto Co assets of Nanjing Auto will also be handed over to SAIC Commercial Business Unit.

Industry experts pointed out that SAIC is the first leading automaker in China to announce its target to lower costs after the financial crisis. As China's auto sales growth is expected to dive to the lowest point of 5% since 1998, more domestic carmakers will follow suit to cut costs and boost profitability.

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