Summary: BAIC’s dependence on Beijing Benz for revenue

BAIC generated a total net profit of 155.36 million RMB in 2016, according to its recently released annual fiscal report. Of that amount, 89.93% came from BAIC-affiliated joint venture Beijing Benz. BAIC’s three other automotive brands, Beijing Hyundai, BAIC Motor and Fujian Benz, accounted for just a bit over a tenth of BAIC’s total net profits.

Beijing Benz sold a total of 317,000 vehicles in 2016. That is over two-thirds of the 472,800 Mercedes Benz vehicles sold in China over the whole of 2016. Beijing Benz also experienced strong sales growth in 2016, with its sales increasing 74.3% year-on-year, by far showing itself to be BAIC’s most successful enterprise.

Beijing Hyundai, the other BAIC-affiliated JV, saw its net profits fall. Sales of its flagship vehicles, the ninth-generation Sonata and Elantra, faced tough competition from competitively priced own brand vehicles, as well as fallout from the THAAD row, which is also affecting other Korean automakers operating in China

Brands under the BAIC Motor moniker include Senova, Weiwang, Beijing Motor, Huansu and Changhe. The sheer number of models has led to internal competition. For example, there is over 20 SUV models. BAIC may need to consider restructuring to remedy this situation and recover from its continued net deficit.