SAIC Motor forcasts over 40% rise in 2011 profit

Updated: 2012-02-01 09:49


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SAIC Motor forcasts over 40% rise in 2011 profit

A worker cleans the Shanghai Automotive Industry Corporation (SAIC) stage prior to the opening of the 14th Shanghai International Automobile Industry Exhibition in Shanghai April 18, 2011. [Agencies]

Top Chinese automaker SAIC Motor Corp Ltd has forecast a rise of more than 40 percent in 2011 net income on solid demand for German and American marques made at its Shanghai ventures.

However, the news provided investors with little comfort and SAIC's shares ended down 2.5 percent on Tuesday, even as the Shanghai Composite Index closed up 0.3 percent.

"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.

The world's second-biggest economy is cooling, with annual growth easing to 8.9 percent in the fourth quarter of last year from 9.1 percent in the third, and a further slowdown is expected to keep pressure on corporate profits this year.

SAIC, which makes cars in partnership with General Motors Co and Volkswagen AG, sold more than 4 million vehicles last year, up 12 percent, largely outperforming a 2.5 gain by China's overall vehicle market.

Its tie-up with GM sold 18.5 percent more cars in the year, with sales at its venture with VW up 16.4 percent, according to company data. The two ventures comprised 59.8 percent of SAIC's overall tally.

The acquisition of some assets from parent Shanghai Automotive Industry Corp also helped boost earnings, SAIC said in a statement.

SAIC is expected to announce its full-year earnings on April 4.

Many other local automakers without strong foreign ties, including FAW Car Co Ltd and Chongqing Changan Automobile Co Ltd, projected declines in their 2011 earnings.

FAW Car expected earnings for last year to plunge 50-80 percent to between 372 million and 930 million yuan ($58.8-146.90 million). Changan, a Ford Motor Co and Mazda Motor Corp partner, said it expected to post net income of 900 million to 1 billion yuan, down 51-56 percent.