Well-heeled customers fuel 300pc rise in SAIC Motor profit
SAIC Motor Corp, the nation's largest carmaker, said its net profit for the first nine months surged 300 per cent from a year earlier on expanded sales to more affluent customers.
The company, which is about to release its third-quarter results, said in its preliminary statement that earnings far exceeded last year's nine-month figure of 825 million yuan.
Shares of Shanghai-listed SAIC Motor closed up 5.16 per cent at 30.79 yuan yesterday after it made the announcement.
In April, the company said its first-quarter net profit more than quadrupled from 222.9 million yuan last year after it bought stakes in ventures with General Motors Corp and Volkswagen from its parent.
The company said it would concentrate its resources on developing self-branded cars and expanding distribution.
SAIC Motor launched its first self-branded car, the Roewe 750, in January with a 2.5 litre petrol engine.
The company plans to launch a second model early next year, which will be shown at the Guangzhou International Car Show next month.
In addition, the SAIC-GM venture yesterday said in a statement it would invest 1.6 billion yuan to build a testing facility in Anhui to help develop cars for the local and Asian markets.
GM, which sold 413,367 vehicles in the mainland last year with SAIC, plans to increase that number to one million by next year.
Analysts said larger-scale mainland carmakers maintained their market share and improved profitability in a highly fragmented car market.
FAW Car, a Shenzhen-listed car subsidiary of Jilin-based First Auto Work, said net profit for the first nine months was likely to rise 20 per cent from a year earlier on increased car sales. The company, a joint-venture partner of Mazda Motor Corp, also said in its preliminary statement that third-quarter earnings probably rose more than 50 per cent from last year's 228.7 million yuan.
In contrast, small economy carmakers, pressured by price cuts, have seen their profitability slide.
Tianjin FAW Xiali Automobile, another Shenzhen-listed economy car unit of First Auto Work, said on Wednesday quarterly net profit would drop between 50 and 100 per cent from a year earlier because severe competition led to price cuts of at least 10 per cent during the period.
Hong Kong-listed Geely Automobile Holding reported that net profit fell 32 per cent to HK$82 million in the first half.