Carole Nash Classic Insurance Specialists

China Watch : SAIC reaches 67% of annual sales target in H1

Gasgoo.com, 27th July, 2009

China’s leading automaker, Shanghai Automotive Industry Corporation (SAIC), has completed 67 percent of its 2009 sales target during the first half of this year.
 
SAIC sales surged 29.3 percent from a year earlier to 1.23 million units during the six months, with a growth rate higher than the country’s average. The automaker ranked first among the top 10 Chinese automakers in terms of sales during the year’s first half, according to statistics released by the China Association of Automobile Manufacturers.

Passenger vehicle sales rose 22.4 percent from a year earlier to 675,127 units, while commercial vehicle sales jumped 38.9 percent to 550,441 units.

SAIC Motor Passenger Vehicle Co, a wholly owned subsidiary of SAIC, also reported sales growth of its homegrown models. During the first half of 2009, sales of its Roewe and MG cars rocketed up 274.4 percent to 40,197 units. Monthly sales of Roewe 550 reached as high as 6,000 units.”

All of its three major joint venture subsidiaries claimed a boom in sales during the half year. Shanghai Volkswagen led Chinese passenger vehicle producers with sales at 314,011 units, up 15.4 percent from last year’s period. Shanghai GM sales hit a record high of 288,854 units, up 16.1 percent. And SAIC-GM-Wuling Automobile also achieved a high, with sales up 48.6 percent to 492,985 units.

SAIC Motor Passenger Vehicle Co, a wholly owned subsidiary of SAIC, also reported sales growth of its homegrown models. During the first half of 2009, sales of its Roewe and MG cars rocketed up 274.4 percent to 40,197 units. Monthly sales of Roewe 550 reached as high as 6,000 units.

SAIC President Chen Hong said that the company would take all efforts to complete the annual sales goal and focus on inventory and cost control during the year’s second half.

An official from the company told the press that inventories in factories and dealers have been declining in past months, but company leaders would not expand capacity in haste.

As for the SAIC-Nanjing Auto merger, Chen Liang from Huatai Securities said that the merger is still going on and needs a few years to finally create benefits. It is predicted that losses of Nanjing Auto will be around 600 million yuan in 2009 and 2010.”

Automakers are not active in expanding investments, which suggests that they have no confidence whether the sales boom will last, according to Li Jun, an analyst from Guosen Securities.

As for the SAIC-Nanjing Auto merger, Chen Liang from Huatai Securities said that the merger is still going on and needs a few years to finally create benefits. It is predicted that losses of Nanjing Auto will be around 600 million yuan in 2009 and 2010.

Though SsangYong Motor brought 2.28 billion yuan losses to net profit of SAIC in 2008, Chen predicted that SsangYong would cause no more than 928 million yuan losses after the second quarter.

[Source: Gasgoo.com]

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