Weaker sales and the negative impact from stricter vehicle emissions rules led net profit at SAIC Motor Corp., which runs joint ventures with General Motors and Volkswagen Group, to fall 27 percent to 13.8 billion yuan ($1.9 billion) in the first six months.
Combined first-half sales at the state-owned company’s joint ventures and proprietary car and truck brands dropped 17 percent to about 2.94 million. Revenue slumped 19 percent to 376.3 billion yuan.
SAIC’s two partnerships with GM posted steeper sales declines than its joint venture with VW. Deliveries at SAIC-GM-Wuling, its light-vehicle joint venture with GM, tumbled 29 percent to 752,480.
Deliveries at SAIC-GM, SAIC’s passenger vehicle partnership with GM, dropped 13 percent to 834,079.
SAIC-GM-Wuling builds and distributes vehicles for the entry-level Baojun brand and minibuses for the Wuling marque, while SAIC-GM produces and markets Cadillac, Buick and Chevrolet cars and light trucks.
Deliveries at SAIC-VW, which assembles and sells vehicles for the Volkswagen and Skoda brands, decreased 9.9 percent to 919,106.
First-half sales also dropped at SAIC’s proprietary car, truck and bus brands.
Early this year, most coastal provinces and provincial-level municipalities in China, including Shanghai, where SAIC, SAIC-GM and SAIC-VW are based, tightened emissions standards to State 6 levels from the State 5, effective July 1. The State 6 standards are similar to Euro 6 regulations while State 6 rules are on par with the Euro 5.
The stricter rules prompted SAIC and its joint ventures to allow dealerships to offer steep discounts to reduce inventories of vehicles failing short of the new standards.
