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Samsung Electronics flags 56% fall in third quarter profits

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Samsung Electronics flags 56% fall in third quarter profits | The Thaiger
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“Samsung took advantage of the US trade ban against Chinese rival Huawei.”

PHOTO: CNBC

Samsung Electronics says it expects operating profits to drop more than 50% in Q3 amid a continued slump in the global chip market. Operating profits for July to September was expected to reach 7.7 trillion won (US$6.4 billion), down 56.2% from a year earlier – this from the world’s largest maker of smartphones and memory chips.

It marks the fourth consecutive quarter in which the South Korean tech company has recorded a drop in profits in the face of falling semiconductor prices and weakening demand for its mobile devices. Sales for the third quarter were expected to drop 5.3% from the same period last year.

The South Korean tech titan leads the global smartphone market with a 23% share of the sector, trailed by Chinese competitors Huawei and Oppo, with Apple in fourth place, according to sales tracker IHS Markit.

Samsung withholds net profit and sector-by-sector business performance until it releases its final earnings report, which is expected later this month.

The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world’s 11th-largest economy, and it is crucial to South Korea’s economic health. Analysts voiced optimism for the coming months, noting that falling inventory levels for semiconductors – which account for more than half of Samsung’s profit – will help stabilise chip prices after double-digit drops this year.

Sujeong Lim, an analyst at Counterpoint Research, said, that in the mobile business, Samsung took advantage of the US trade ban against Chinese rival Huawei, “replacing a strong competitor in crisis” with its mid-to-low tier Galaxy A handsets.

“The new A series has turned out to be an effective weapon to take share from its Android competitors.”

Samsung appealed to high-end users with the launch of its first foldable smartphone last month after faulty screens forced an embarrassing delay in April. The firm also rolled out its flagship Note 10 devices which analysts say have sold far better than its previous models, giving Samsung a much-needed boost in its mobile sales.

The premium smartphone market has grown fiercely competitive and overall sales have cooled as a lack of major innovation has caused people to wait longer before upgrading to new models. Samsung has also been caught up in a trade war between Japan and South Korea stemming from World War II disputes.

The row saw Tokyo impose tough restrictions on exports crucial to South Korean tech giants in July, and Samsung vice chairman Lee Jae-yong – who called the situation a “crisis” – has visited Tokyo to secure materials. Adding to Samsung’s woes, Lee is currently facing retrial over his role in a massive corruption scandal that brought down former president Park Geun-hye.

He was initially jailed for five years in 2017 on multiple convictions including bribery, which was reduced to a suspended sentence on appeal, only for the Supreme Court in August to order a retrial.

SOURCE: Agence France-Presse

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Business

Consumer groups warn of risks in buying a new Chevrolet

Greeley Pulitzer

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Consumer groups warn of risks in buying a new Chevrolet | The Thaiger
PHOTO: Consumer groups are arning of risks in buying a new Chevrolet, as the maker prepares to pull out og Thailand - File Photo

General Motors’ decision to pull production of its Chevrolet line out of Thailand has prompted consumer advocacy groups to remind prospective buyers of risks. The Foundation for Consumers and the Office of the Independent Committee for Consumer Protection said yesterday that buyers “should be wary of uncertainty as General Motors will pull its operation out of the country” by the end of this year.

“Consumers risk being stranded with no after-sales services such as maintenance, spare parts supply and the quality guarantee of the product. They could face problems since the operator has announced the decision to end the production, distribution and all businesses in the country.”

The warning followed GM Thailand’s campaign that gives discounts of nearly 50% as the carmaker tries to clear 5,000 vehicles in its stock before the closure.

The two consumer groups called on GM Thailand to continue after-sales service for at least four years to show its responsibility for the products sold to consumers. GM has said the three year or 100,000-kilometre warranty will still apply on all models. GM Thailand posted a message on Facebook indicating its service centres will continue operating, but did not specify which dealers will continue offering service.

In addition to consumers, owners and used-car dealers who have the brand in stock are worried about their future. One Chevrolet pickup truck owner said he’s begun worrying about the availability of spare parts and maintenance. “I think I will have to pay more for them,” he said, though he added he would not sell his vehicle due to its quality.

Consumer groups warn of risks in buying a new Chevrolet | News by The Thaiger

PHOTO: Buyers scramble for new Chevrolets as prices plummet by nearly half – The Nation

A mechanic in the central Chai Nat province says Chevy owners should not overreact, as independent factories will produce spare partsafter GM’s departure.

“It’s the nature of the spare parts industry. Where there’s demand, factories will produce parts to supply the market.”

Used-car dealers are also fretting about their stock, fearing banks will unlikely lend to buyers when the manufacturer ceases operations.

Boonthanom Phisoot, the president of the used-car dealers’ association in Chiang Mai, urged the government to help Chevrolet owners to boost confidence for buyers, saying secondhand car dealers could fall into debt if they have stocked Chevrolets. One dealer said he planned to sell Chevrolets at cost or offer credit to buyers.

SOURCE: Bangok Post

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Chevy’s having a “garage sale” and prices are halved

Greeley Pulitzer

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Chevy’s having a “garage sale” and prices are halved | The Thaiger
PHOTO: - The Nation

General Motors’ recent announcement that it’s ending production and sales of Chevrolets in Thailand means prices for new Chevrolets have been cut by half. The starting price for the latest SUV, the Captiva, is now just under half a million baht. General Motors announced Sunday that it’s pulling out of “markets that don’t produce adequate returns on investments,” namely Thailand, New Zealand and Australia. It also plans to sell its factory in Rayong province, east of Bangkok, to China’s Great Wall Motors and withdraw the Chevrolet brand from Thailand by the end of 2020.

The move will see 1,500 people lose their jobs at two factories in the East, but it also means more than 4,000 Chevrolets will be on sale for somewhere between 200,000 and 500,000 less before. And while there’s been no official announcement, all Chevrolet dealerships have posted calculated prices after the discount.

The cost of a Captiva LS will fall from 999,000 baht to 499,000, and LT models tumble from1.099 million to 599,000 baht. The premier model is 699,000 baht, down from 1.199 million.

Smaller discounts will apply to Colorado models and Trailblazers. The Colorado Trailboss manual transmission version will sell for at 775,000 baht, down from 859,000. The Colorado High Country 2WD model is down to 775,000 baht from 998,000, and the Trailblazer 2.5 LT will start at 895,000 baht, down from 1.144 million.

The three year or 100,000-kilometre warranty will still apply on all models. Chevrolet says its service centres will continue operating, but has not specified which dealers will continue offering service.

SOURCE: The Nation

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Thailand’s General Motors plant sold to China’s Great Wall Motors

The Thaiger

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Thailand’s General Motors plant sold to China’s Great Wall Motors | The Thaiger
PHOTO: GM pulls out of Thailand and SE Asia, China moves in - General Motors website

China’s Great Wall Motors has agreed to buy the General Motors’ Thailand manufacturing plant in Rayong. It’s expected than the transaction will be completed by the end of this year. GM announced this week that it is accelerating a retreat from “unprofitable markets”, becoming more dependent on the US, China, Latin America and South Korea for its manufacturing. Read more about the pull-out HERE.

“GM is focusing on markets where we have the right strategies to drive robust returns, and prioritising global investments that will drive growth in the future of mobility, especially in electric and autonomous vehicles.”

GM said it will also pull the Chevrolet brand from Thailand, a major pickup and SUV market. With the proposed sale of the Thailand plant to Great Wall, GM passes up opportunities to expand operations in Southeast Asia.

Great Wall, one of China’s biggest SUV makers, says it will sell vehicles from the Thai manufacturing plant in Thailand, other ASEAN countries and Australia as the automaker seeks to expand globally amid a slowing domestic market. Earlier this year, it signed an agreement to buy a GM plant in India. The companies said they expected the transaction would be completed by the second half of this year.

Shi Ji, analyst at Haitong Internation, told Reuters that these two plant acquisitions will certainly accelerate the opening up of the auto market into parts of SE Asia.

“Such an acquisition could give Great Wall quick access to the ASEAN market, and Thailand is a good choice for its production base amid the country’s established supply chain in the automotive industry.”

Thailand produces around 2 million light vehicles each year, with just over half exported, most of them Japanese-based brands like Toyota, Honda and Suzuki. Great Wall may consider also building pickup trucks and SUVs in Thailand.

The automaker, which is building a car plant in China with BMW Group, sold 1.06 million light vehicles last year, including 65,175 units for export.

“There is no choice, if we don’t go global, we will not survive,” Wei Jianjun, chairman of Great Wall Motors said last year when they opened their first full assembly plant in Russia. Great Wall rival Geely is also looking to expand light-vehicle sales across the ASEAN region with Malaysia-based brand Proton.

SOURCE: Auto News

Thailand's General Motors plant sold to China's Great Wall Motors | News by The ThaigerThailand's General Motors plant sold to China's Great Wall Motors | News by The Thaiger

A few of the Great Wall SUVs and pickups currently made in China – Great Wall website

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