BEIJING (Bloomberg) -- SAIC Motor Corp., China's largest domestic automaker, boosted third-quarter profit 47 percent as it sold more cars with partners Volkswagen AG and General Motors Co. in the world's biggest auto market.
Net income for the quarter climbed to 3.7 billion yuan ($554 million) from 2.53 billion yuan a year earlier, the Shanghai-based automaker said in a statement to the city's stock exchange today. Sales more than doubled to 81.6 billion yuan.
SAIC, which sells Buick Excelle compacts and VW Passat sedans on the mainland, increased car sales as government incentives and rising incomes spurred demand. The company's sales in the third quarter rose 21 percent to 884,998 units from a year earlier, outperforming rivals BYD Co. and Geely Automobile Holdings Ltd.
“It won't be too difficult for SAIC to maintain steady profit growth,” said Zhang Xin, an auto analyst with Guotai Junan Securities Co. in Beijing. “They've got a good strategy to develop their brands and can keep their production costs under control,” Zhang said before the earnings were released.
SAIC fell 5 percent to close at 20.91 yuan in Shanghai trading today. The shares have risen 4 percent this year, compared with a 9 percent fall in the benchmark Shanghai Composite Index.
The company makes cars and minivans in partnerships with Detroit-based GM, and cars in a 50-50 venture with Volkswagen. Volkswagen and GM are the two largest overseas automakers in China, according to the China Association of Automobile Manufacturers.
SAIC raised its stake in Shanghai General Motors Corp., the two companies' car-manufacturing venture by 1 percent to 51 percent in March, allowing them to record the partnership's total sales into its financial accounts.
SAIC aims to sell 3 million cars this year, including 180,000 own-brand vehicles, President Chen Hong said in March. The automaker, which owns the Roewe and MG sports-car brands, sold more than 2.66 million vehicles in the first nine months, up 36 percent from the year before, it said Oct. 11.
SAIC, headed by chairman Hu Maoyuan, has been expanding co- operation with its U.S. partner this year. The Chinese automaker and GM will start exporting the Chevrolet Sail, a sedan it produces under the partnership, to Chile this month, GM said. The car will eventually be sold in South America, North Africa and the Middle East.
The two carmakers also formed a partnership to sell low-cost vehicles in India last December. SAIC-GM-Wuling Automotive Co., SAIC and GM's minivan venture, will also introduce its first car in China under the newly created Baojun brand on Nov. 18, the carmakers said.
China's passenger-car sales to dealerships rose to 19.3 percent in September, the China Association of Automobile Manufacturers said in an e-mailed statement on Oct. 12.
For the nine months through September, SAIC said its profit more than doubled to 9.58 billion yuan.
The company said a statement to Shanghai's stock exchange said on Oct. 12 its net income may have risen more than 140 percent in the first nine months of the year from 3.97 billion yuan.