Three Chinese car makers posted strong earnings growth Wednesday, powered by Beijing's measures to boost car sales.
The government-stimulus measures, designed to encourage auto purchases during the global economic downturn, helped China overtake the U.S. as the world's biggest auto market in 2009.
But while car-sales growth in China was fast at the start of 2010, it has moderated in recent months partly because of a reduction in government incentives.
SAIC Motor /zigman2/quotes/201442870/delayed CN:600104 +0.57% Corp., China's largest car maker by sales volume, said its first-half net profit more than quadrupled from a year earlier.
The Shanghai-based company, which has vehicle-making joint ventures with General Motors Co. and Volkswagen /zigman2/quotes/206736865/delayed DE:VOW -0.24% AG, said its net profit for the six months ended June 30 was 5.87 billion yuan ($863.6 million), up from 1.46 billion yuan a year earlier.
Revenue totaled 147.62 billion yuan during the period, up from 61.59 billion yuan a year earlier.
The company said last month it sold 1.77 million vehicles in the first half, up more than 44% from the year-earlier period.
FAW Car /zigman2/quotes/200328702/delayed CN:000800 -2.24% Co.—a unit of unlisted China FAW Group Corp., China's No. 2 auto maker—said its first-half net profit more than doubled from a year earlier because of strong sales.
FAW Car said its net profit for the six months ended June 30 was 1.34 billion yuan, up from 535.28 million yuan a year earlier.
Revenue rose 54% to 17.91 yuan billion, up from 11.63 billion yuan a year earlier.
The company said it sold more than 120,000 vehicles in the first half, up more than 70% from 70,000 a year ago.
Apart from its proprietary Hongqi sedans, FAW Car produces Mazda 6 models under a technical license from Japan's Mazda Motor /zigman2/quotes/204777714/delayed JP:7261 -3.00% Corp.
Meanwhile, Geely Automobile Holdings /zigman2/quotes/200716015/delayed HK:175 -1.63% Ltd. said its first-half net profit rose 35% from a year earlier.
The Hong Kong-listed unit of Zhejiang Geely Holding Group Co., which this month completed a $1.8 billion acquisition of Volvo Cars from Ford Motor /zigman2/quotes/208911460/composite F +1.22% Co., said it remains on track to meet its target of selling 22% more cars this year to 400,000 units, despite rising competition in both domestic and export markets.
Zhejiang-based Geely Automobile said its net profit for the six months ended June 30 was 804.8 million yuan, up from 595.9 million yuan.
Revenue rose 55% to 9.24 billion yuan from 5.95 billion yuan.
Company Chairman Li Shufu said he sees cooperation opportunities between Geely and Volvo Cars, particularly in technical areas.
Mr. Li, who is also chairman of Geely's parent, said Zhejiang Geely is pushing forward with plans to produce Volvo cars domestically in China, though he said no decision has been made on when production will begin, citing a complicated approval process that "takes time."
Mr. Li has said Zhejiang Geely intends to inject Volvo Cars into its Hong Kong-listed unit in the long run. When asked about those plans Wednesday, he said the "original plan hasn't changed," without elaborating.
Geely Automobile completed a deal in 2008 with its parent to raise its stakes in the group's main car making operations to 91% from 46.8%, becoming one of the few companies not incorporated in China to own a majority stake in a mainland auto manufacturer.
The joint ventures include Zhejiang Geely Automobile Co. and Shanghai Maple Guorun Automobile Co.
Wang Ming in Shanghai and Joanne Chiu in Hong Kong
Add to watchlist
CN:600104
Add to watchlist
DE:VOW
Add to watchlist
CN:000800
Add to watchlist
JP:7261
Add to watchlist
HK:175
