SAIC profit up 46%; forecasts slowing sales

SAIC Motor (600104.SH) announced on Monday that first-half profits surged 46% year-on-year due to high sales, but cautioned that a slowing economy and the expiration of government car purchase subsidies are likely to put a brake on future sales growth, the Wall Street Journal reported. The country’s largest auto maker by sales volume said profits for the six months ending June 30 climbed to US$1.34 billion; revenues increased 25% to US$28.73 billion. However, the company said it estimates industry-wide sales for 2011 will grow at a net 3.6%, compared to a 32% rise in sales volume in 2010. SAIC’s bleak outlook is shared by the China Association of Automobile Manufacturers, which has revised its original forecast of 10-15% growth down to 5% for 2011. SAIC said it will accelerate the launch of new models and explore overseas markets to compensate for the slowdown at home.