SAIC profit up as GM and VW ventures thrive

PUBLISHED : Friday, 30 August, 2013, 12:00am
UPDATED : Friday, 30 August, 2013, 3:40am

First-half net profit at SAIC Motor rose 6 per cent to 11.5 billion yuan (HK$14.5 billion) on strong sales at its joint ventures with General Motors and Volkswagen.

The local partner to two of the most aggressive players in the mainland car market, SAIC sold 2.6 million vehicles in the first half - a year-on-year jump of 15 per cent, according to a filing with the Shanghai Stock Exchange, beating the industry's average growth rate of 12 per cent.

GM and VW have been racing each other over the years in their attempts to top the sales chart in the world's biggest vehicle market with their cars, vans and mini vehicles.

In this year's first half, United States giant GM beat its European rival by selling 1.57 million new vehicles on the mainland - 30,000 units more than VW.

Buick - GM's most popular brand on the mainland - continued to lead its sales last month, with volume climbing 11.1 per cent to 221,580 units, while Cadillac sales rose 83 per cent to 3,688 cars but Chevrolet sales fell 3.4 per cent to 43,343.

Deliveries of Wuling - the brand jointly developed with SAIC that accounts for nearly half of GM's mainland sales - rose 4.5 per cent to 98,380 units last month, while sales of the low-end Baojun brand tripled to 6,302 units.

Audi - VW's most popular mass premium brand on the mainland - also saw strong growth, 17.7 per cent over the period, with 228,139 customers taking delivery in the first six months - the first time its sales topped 200,000 at the mid-year mark.

SAIC's prospects look positive, with both GM and VW continuing to pledge heavy investment on the mainland despite a slowdown in the growth of the vehicle market.

VW is investing US$12.8 billion to increase its production to the end of 2015, while GM will add five more assembly plants, costing a total of US$11 billion.

Shipments of new vehicles to mainland dealers jumped 12.46 per cent to 12.33 million cars in the first seven months of the year, according to the latest figures from the China Association of Automobile Manufacturers.

That outpaced the group's earlier estimate of 8 per cent growth for the full year, although growth in passenger car sales last month slowed from June.

SAIC's share price fell 1.41 per cent to close at 13.27 yuan on the Shanghai Stock Exchange yesterday.