Auto Companies Saw Sales Improvement even with Expected Low Sales Growth
Major auto companies saw improvement in sales despite than the lower than expected sales growth. According to SAIC Motor Corp. one of the largest automaker by market cap, the projected net profit last year was to grow by 6 percent compared to a 5 percent sales increase and new energy car manufacturer BYD reported an 5.5 times increase in their net profit. The Shenzhen based automaker saw a 37 percent growth year on year in their revenues or around 80 billion yuan for 2015. Their net profit aside from non recurring items have moved up 2.78 times or to 1.21 billion yuan.
Their growth was boosted by favorable policies on new energy vehicles, adding that BYD’s market Shanghai offered 60,000 yuan subsidy of every hybrid vehicle put up for sale and electric bus subsidy was at 37,000 yuan. sales for new energy cars reached 19 billion or 24 percent of BYD’s revenue compared to traditional gas vehicles business. SAIC expects its car sales to hit 5.9 million an increase of 5 percent year on year and net profit to be at 6 percent or 29.65 billion yuan, saying that the higher margin was due to its new car launch and improved sales structure.
Meanwhile Guangzhou Automobile Group reported a 31 percent year on year growth in sales and a 32 percent growth in net profit. FAW Car Co. which ranked bottom among the car makers yield 52 million yuan in net profit last year a decrease of 75 percent, as company’s revenue dropped 21 percent or 26 billion yuan based on the company’s filing at the Shanghai Stock Exchange.