Cars

Automaker sees vehicle sales dropping in Q4

By Jin Jing and Liza Lin (China Daily)
Updated: 2010-05-26 11:14

SHANGHAI - SAIC Motor Corp, China's largest domestic automaker, expects its first-half sales to increase to more than 1.65 million vehicles from 1.23 million a year earlier, President Chen Hong said.

SAIC, which makes vehicles with General Motors Co and Volkswagen AG, forecasts 2010 sales of 3 million units. Industry-wide, China's vehicle sales may contract in the fourth quarter, with full-year volume of 15.5 million units, Chen said at the company's annual shareholders' meeting in Shanghai on Tuesday.

"It's hard to foresee significant growth in the fourth quarter," John Zeng, an IHS Global Insight analyst, said on Tuesday. "Growth in the second half will be poorer than in the first as car sales reached peak volume in third and fourth quarters last year." Comparison with the high base in 2009, growth is bound to slow, he said.

Monthly car-sales growth in China slowed in April to the most-sluggish pace since March 2009 amid rising consumer and property prices. Sales of cars, sport-utility vehicles and multipurpose vehicles increased 33 percent to 1.11 million from a year earlier, compared with a 63 percent jump in March, the China Association of Automobile Manufacturers said on May 10.

Chinese consumers' willingness to spend dropped in the first quarter, possibly because of rising property prices, Nielsen Co and the nation's statistics bureau said May 6, citing a survey. Shanghai-based SAIC is confident of achieving its sales target of 3 million units this year, Chen said. Domestic demand for vehicles including Excelle compacts and Sunshine minivans helped SAIC boost first-quarter profit more than fourfold to 2.88 billion yuan ($421 million).

Related readings:  Vice Minister of SAIC: Protection of Expo signs.  SAIC Motor Q1 net profit quadruples to record high  Abstract of SAIC's annual development report of China's trademark strategy 2009  SAIC Motor forecasts quadrupling of Q1 net profit

SAIC aims to have 20 percent of China's alternative-energy vehicle market by 2015, Chairman Hu Maoyuan said on Tuesday. China's government will give a detailed plan for the alternative-energy car industry this month, the State Council said in a statement on its website on May 6.

Talks between General Motors Co and Liuzhou Wuling Automotive Co about increasing the US company's stake in the their venture are going smoothly, SAIC's Chen said.

GM, the largest foreign automaker in China, owns 34 percent of the venture, SAIC Motor owns 50.1 percent and Liuzhou Wuling Automotive Co owns the rest.

Bloomberg News