SHANGHAI-- SAIC Motor Corp., China's largest auto maker by
sales, said Thursday its third-quarter net profit rose 5% on solid
sales gains at its joint ventures with Volkswagen AG and General
Motors Co.
The Shanghai-based auto maker posted a net profit of 6.84
billion yuan ($1.1 billion) for the three months ended Sept. 30,
compared with 6.53 billion yuan in the year earlier period.
In the period from July to September, Shanghai Volkswagen Co.'s
car sales grew 8% to about 408,000 vehicles, and Shanghai General
Motors Co.'s car sales rose 11% to nearly 422,000 units. Sales by
minivan maker SAIC-GM-Wuling were much stronger, rising 19% to more
than 439,000 vehicles thanks to robust demand in the rural and less
wealthy area.
The sound performance by SAIC's joint ventures came at a time
when China's overall auto industry saw growth momentum slow sharply
amid a cooling economy and rising inventories. In the third
quarter, sales of automobiles in China grew just 4% from a year
earlier to 5.3 million. By contrast, SAIC's auto sales rose 9% to
1.33 million.
Thanks to its tie-ups with VW and GM, analysts widely regard
SAIC as China's most competitive auto maker, though its performance
of developing its own brands has been disappointing. In the first
nine months of this year, five of China's 10 best-selling cars were
built by SAIC's joint ventures with VW and GM, according to the
industry group China Association of Automobile Manufacturers.
Shanghai VW has been a long-term champion in China's auto
industry, leading the mass market in 18 out of China's 31 provinces
and municipal cities, according to U.S. brokerage Stanford
Bernstein.
While Shanghai GM has lagged behind Shanghai VW in recent years
in terms of profitability, it is revving up new investment in
China, with ambitious plans in the SUV and luxury segments. In
August, Shanghai GM launched the Cadillac ATS-L luxury sport sedan.
Earlier this month, the joint venture began deliveries of the Buick
Envision premium midsize SUV across China.
In the third quarter SAIC saw losses in its own brands--Roewe
and MG--widening, with sales of the two brands in the period off
40% compared with a year earlier. SAIC didn't give a reason.
Chinese domestic car brands have seen their shares of the local
market squeezed as foreign players launch more no-frill models and
extend their network to less wealthy regions, both of which had
been the realm of Chinese auto makers.
Great Wall Motor Co., the producer of China's top selling SUV,
said last week its third-quarter profit fell 9% to 5.59 billion
yuan.
Rose Yu
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