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SAIC and Chang'an Auto see sharp decline in net income
By Jin Jing |
January 24, 2009, Saturday
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Print Edition
Print Edition
SAIC Motor Corp and its smaller rival, Chongqing Chang'an Automobile (Group) Ltd, warned their net profits were expected to drop significantly last year due to weak demand for vehicle sales amid an economic downturn.
SAIC, the nation's biggest car maker, said its unaudited net profit for last year would decline more than 50 percent on a sales slump and a loss in its investment in South Korean subsidiary Ssangyong Motor Corp, according to its statement filed to the Shanghai Stock Exchange yesterday.
The Shanghai-based auto maker earned 4.6 billion yuan (US$673 million) in 2007.
SAIC also said it needed to set aside huge provisions for Ssangyong as a worsening financial crisis caused sales of its South Korean subsidiary to plummet, resulting in a loss.
Ssangyong, 51 percent owned by SAIC, filed for bankruptcy protection on January 9 despite a 25.9-billion-won (US$19.89 million) emergency fund provided by SAIC as part of its commitment to help Ssangyong develop new products.
SAIC also has ventures with General Motors Corp and Germany's Volkswagen AG. Shanghai GM posted its first year-on-year sales decline of 8 percent last year while Shanghai VW's sales rose 7 percent from a year earlier.
Meanwhile, Chang'an Auto said it expected its profit last year to plunge nearly 100 percent following a sales slump in both its self-branded vehicles as well as those of its joint venture with Ford Motor Corp and Mazda Motor Corp, its statement to the Shenzhen Stock Exchange said. Its net income tumbled to about 38.9 million yuan last year from 667 million yuan in 2007.
China's vehicle sales rose 6.7 percent to 9.38 million units last year, the lowest growth rate over the past 10 years, according to China Association of Automobile Manufacturers.
SAIC gained 6.26 percent to 6.28 yuan versus a 0.71 percent dip in the Shanghai Composite Index.
SAIC, the nation's biggest car maker, said its unaudited net profit for last year would decline more than 50 percent on a sales slump and a loss in its investment in South Korean subsidiary Ssangyong Motor Corp, according to its statement filed to the Shanghai Stock Exchange yesterday.
The Shanghai-based auto maker earned 4.6 billion yuan (US$673 million) in 2007.
SAIC also said it needed to set aside huge provisions for Ssangyong as a worsening financial crisis caused sales of its South Korean subsidiary to plummet, resulting in a loss.
Ssangyong, 51 percent owned by SAIC, filed for bankruptcy protection on January 9 despite a 25.9-billion-won (US$19.89 million) emergency fund provided by SAIC as part of its commitment to help Ssangyong develop new products.
SAIC also has ventures with General Motors Corp and Germany's Volkswagen AG. Shanghai GM posted its first year-on-year sales decline of 8 percent last year while Shanghai VW's sales rose 7 percent from a year earlier.
Meanwhile, Chang'an Auto said it expected its profit last year to plunge nearly 100 percent following a sales slump in both its self-branded vehicles as well as those of its joint venture with Ford Motor Corp and Mazda Motor Corp, its statement to the Shenzhen Stock Exchange said. Its net income tumbled to about 38.9 million yuan last year from 667 million yuan in 2007.
China's vehicle sales rose 6.7 percent to 9.38 million units last year, the lowest growth rate over the past 10 years, according to China Association of Automobile Manufacturers.
SAIC gained 6.26 percent to 6.28 yuan versus a 0.71 percent dip in the Shanghai Composite Index.
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