SAIC Motor Corp Ltd, the top Chinese automaker, assesses a 40% rise in the 2011 net income, due to the high demand for American and German cars made at its Shanghai ventures.
More than 4 million cars were sold in 2011 by SAIC in partnership with Volkswagen, which means a 2.5% gain by China’s overall vehicle market. The partnership with GM brought an 18.5% rise and with VW – 16.4%.
“Growth was under expectations, but investors could be more bothered about the outlook for 2012,” said Cao Xuefeng, head of research at Huaxi Securities in Chengdu.
“China’s car market will not see the same exponential growth we saw in the past few years, and investors are also selling such stocks to move into more high-growth sectors,” said Han Weiqi, an analyst with CSC International Holdings Ltd. in Shanghai.
Other local automakers that didn’t benefit from strong foreign ties had to face 2011 earning declines. FAW Car Co Ltd and Chongqing Changan Automobile Co Ltd, are only two of these unfortunate companies.
FAW Car predicted a 50%-80% rise (between 372 million and 930 million yuan) and Changan expected a net income from 900 million to 1 billion yuan.