SAIC Motor Corp., hurt by weaker sales, tougher emissions rules and lower government subsidies for electrified vehicles, estimates net profit plunged 29 percent to 25.6 billion yuan ($3.7 billion) in 2019.
Sales at the state-owned automaker, which runs light-vehicle joint ventures with Volkswagen Group and General Motors, dropped 12 percent to 6.24 million cars and light trucks last year.
At SAIC-VW, which builds light vehicles for the VW and Skoda brands, deliveries dipped 3.1 percent to around 2 million. Sales at SAIC-GM, a passenger vehicle partnership between SAIC and GM, fell 18 percent to roughly 1.6 million.
SAIC-GM-Wuling, SAIC’s light-vehicle joint venture with GM, reported sales dropped 19 percent to below 1.67 million
SAIC-GM produces vehicles for Cadillac, Buick and Chevrolet cars and light trucks, while SAIC-GM-Wuling builds vehicles for the entry-level Baojun brand and minibuses for the Wuling marque.
In July, light-vehicle manufacturers in most Chinese municipalities and provinces were required to upgrade vehicle emission standards. The tighter emissions rules required automakers to improve engine technologies, resulting in additional costs.
The Chinese government in June scaled back by more than 60 percent subsidies for full electrified vehicles and cut subsidies by 50 percent for plug-in hybrids.
SAIC, a Shanghai-listed company, hasn’t disclosed a detailed financial report of its operations last year.