SAIC Third-Quarter Profit up 27%
Published on October 27, 2011 by Tycho de Feijter
SAIC Motor Corp., China’s largest domestic automaker, said third-quarter profit rose 27 percent as it sold more cars with partners General Motors Co. and Volkswagen AG in the world’s biggest automobile market.
Net income for the quarter climbed to 4.7 billion yuan ($740 million) from 3.7 billion yuan a year earlier, the Shanghai-based company said in a statement to the city’s stock exchange today. Sales rose 19 percent to 97.4 billion yuan.
SAIC, which produces the Buick Excelle compacts and VW Passat sedans for sale in China, increased car deliveries even after the government removed buying incentives that helped the nation surpass the U.S. as the world’s largest car market. The automaker aims to sell 6 million cars a year by 2015, compared with its 4 million target this year, President Chen Hong said in April.
SAIC shares rose 2.7 percent to 16.15 yuan at the close of trading in Shanghai today before the announcement. The stock has risen 10 percent this year, compared with a 14 percent decline in the benchmark Shanghai Composite Index.
Vehicle sales have slowed in China this year after the government reinstated a 10 percent sales tax on small cars and phased out subsidies for trade-ins in rural areas.
Industrywide deliveries will increase less than 5 percent this year, compared with last year’s 32 percent growth, according to the China Association of Automobile Manufacturers, which cut its annual forecast two times in three months.
SAIC, headed by chairman Hu Maoyuan, signed an agreement with partner GM to jointly develop electric cars in China, while its minivan venture with the Detroit-based automaker started selling its first car in China under the newly created Baojun brand in August.