Shanghai Automotive, which owns a fifth of General Motors’ flagship car plant in China, also has a joint venture with Volkswagen and was this week tipped to eventually own a substantial stake in MG Rover, reportedly posted a 10.5% rise in second-quarter net earnings on Thursday despite a sharp slowdown in car sales across the country.
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Shanghai Automotive, the listed arm of China’s largest car maker, posted earnings of 721.33 million yuan ($87.15 million) in the quarter, versus 652.91 million yuan a year earlier, according to a statement seen by Reuters.
Growth in car sales has decelerated in the past four months, ever since Beijing slapped curbs on auto credit as part of efforts to slow the economy, the report noted, adding that Shanghai Auto is the largest listed maker of car components in an industry peopled by smaller rivals such as Torch Investment Co. Ltd. But its stake in GM’s venture has been known to account for more than 80% of net earnings.
However, Reuters also noted that the company’s yuan-denominated A shares, open to select foreign investors, ended the day down 0.2% at 8.24 yuan, in line with the market, and have slid 22% since the start of 2004, underperforming the index’s 11% fall.
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