China's biggest carmaker posts 39% drop in H1 profit

[BEIJING] SAIC Motor, the Chinese partner of Volkswagen and General Motors reported a 39 per cent decline in first-half net profit as the Covid-19 outbreak kept people away from showrooms.

Net income fell to 8.4 billion yuan (S$1.66 billion) in the six months through June, the Shanghai-based company said in a statement Thursday. Revenue dropped 25 per cent to 274.5 billion yuan. The performance improved in the second quarter, however, with net profit rising 32 per cent from a year earlier to 7.3 billion yuan as the car market started to recover.

China's biggest automaker was hit hard by the coronavirus pandemic, which subdued demand and forced car companies to suspend production. The giant also faces intensifying competition from newcomers like Tesla and NIO, which have weathered the outbreak better and lured buyers away from SAIC's electric-car offerings.

SAIC, which claimed one quarter of the Chinese car market in 2018, saw its share narrow to about 20 per cent in the first half. Sales declined across all of its major ventures, with SAIC-VW, SAIC-GM and SAIC-GM-Wuling recording the biggest on-year declines in the first half among the top 10 manufacturers, according to China Passenger Car Association data.

BLOOMBERG