China Watch : SAIC Motor may raise 10bln yuan in share placement

Automotive News Europe/Reuters, 23rd June, 2010

SAIC Motor, China’s biggest automaker, may raise nearly 10 billion yuan ($1.47 billion) in its planned share placement to help shore up its passenger car business, a major Chinese financial newspaper said.

SAIC Motor, the maker of MG and Roewe sedans, has invested more than 4 billion yuan in its MG series of models and plans to invest at least 6 billion yuan to boost the brand’s recognition, the 21th Century Business Herald quoted an unnamed source as saying.

SAIC Motor, which operates manufacturing ventures with General Motors and Volkswagen Group, is virtually the only Chinese automaker that has made some inroads in China’s lucrative medium-to-higher end segment, still dominated by locally made Buick, Passat, Accord and Camry models.

Over the weekend, SAIC Motor said it was planning a private placement of new shares but did not provide further details. Trading of its Shanghai-listed shares were suspended from Monday. Proceeds from the share placement will also help fund the development of green vehicles, the newspaper said.

Its shares ended down 3.8 percent on Friday, when they last traded, to 12.05 yuan. The stock has dropped about 40 percent this year, underperforming a 23 percent fall in the benchmark Shanghai Composite Index.

Vehicle sales in China, the world’s biggest auto market, are expected to return to a more moderate growth rate after breakneck expansion in 2009. However, SAIC Motor President Chen Hong has said he was confident the company would achieve its annual target of selling 3 million vehicles this year.

[Source: Automotive News Europe]

Clive Goldthorp

About the Author:

Clive claims that his interest in the BMC>MG story dates back to his childhood in the 1960s when the family’s garage premises were leased to a tenant with an Austin agency. However, back in the 1920s and 1930s, his grandmother was one of the country’s first female Garage Proprietors so cars probably run in his genes! Admits to affairs with Alfa Romeos, but has more recently owned an 06/06 MG TF 135 and then a 15/64 MG3 Style… Clive, who was AROnline’s News Editor for nearly four years, stood down from that role in order to devote more time to various Motor Racing projects but still contributes articles on as regular basis as his other commitments permit.

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