SAIC has said its first-half net profit dropped 26% from a year earlier due to write-offs related to its stake in troubled Ssangyong.

SAIC posted a net profit of CNY1.45 billion in the six-month period, down from CNY1.97 billion in the first half of last year, it said in a statement filed to the Shanghai Stock Exchange.

Revenue rose 6.7 percent in the period toCNY61.3 billion boosted by government incentives such as a cut in taxes on small cars and subsidies for buyers of fuel-efficient vehicles in rural areas, it said.

However, the company reported a loss on paper of CNY1.2 billion for the period from its investment in Ssangyong, the statement said.

SAIC said it expected total vehicle sales in China’s market to reach 11.5 million units in 2009, up more than 20 percent from 2008.

SAIC said earlier this year that it may sell – including the sales of its JV operations with VW and GM – more than 2 million vehicles in 2009.