Shangahi Auto (SAIC) is reportedly planning to cut salaries of top executives as it looks to save costs in anticipation of harder times.

Sources from the company told the Xinhua News Agency that every subsidiary was asked lift net profits by 1 percent by limiting costs.

The report also said that SAIC Group had slashed senior managers’ bonuses by 20% in 2008 and it’s predicted that base salaries won’t be increased.

The SAIC Group was the first large-scale automobile company to announce its specific plans for reducing costs, said Sun Zimu, an analyst with Essence Security.

Facing the economic downturn, nine state-owned enterprises in Shanghai have vowed to cut payrolls and administrative expenditures, according to the State-owned Assets Supervision and Administration Commission of Shanghai.