China's Shanghai Auto January-September Sales Revenue Up 42%

SHANGHAI, Oct 14, 2003; Reuters reported that Shanghai Automotive Industry Corp, China's number-two auto maker, said on Tuesday car sales and output in the first nine months had leapt 41.7 percent as demand surged in the world's fastest-growing sedan market.

The Shanghai-based firm sold and made 419,000 cars from January to September, already overtaking sales of 410,000 throughout the whole of 2002.

That puts the company, an equal partner in China with General Motors Corp and Volkswagen AG, firmly on track to exceed an annual production goal of 500,000 cars.

Sales of all types of vehicles, including cars, were up 36 percent to 551,400 units in the first nine months of 2003 versus the same period of last year.

"Development over the past two years has caught a lot of people off guard," Shanghai Automotive spokesman Xue Hao told Reuters, declining to give a new sales target for the year.

Cars sales in China broke the million mark for the first time last year and are expected to rack up another stellar year in 2003, driven by strong economic growth.

Foreign auto makers have announced plans to more than double production over the next four years, raising fears of a margin-sapping glut, but they hope economic growth of eight percent a year will soak up additional capacity.

SAIC's main venture with GM posted the fastest rise in sales among its operations in the first nine months, Xue said, up 62.2 percent to 133,000 units versus the same period of 2002.

"Demand for GM's cars is exceeding supply," Xue said.

Shanghai Automotive's venture with Volkswagen saw sales go up 33.7 percent to 286,000. Volkswagen, which runs another joint venture with First Automotive Works in the northeastern city of Changchun, is China's leader, with more than a third of the market.

SAIC-GM-Wuling Automobile, in which Shanghai Automotive owns a 50.1 percent stake and GM 34 percent, sold 129,600 units in the January to September period, up 20 percent from the same period of 2002.

Shanghai Automotive expects turnover of 150 billion yuan ($18.12 billion) to 156 billion yuan this year, company executives have said.

Revenue rose 22.4 percent to 120 billion yuan in 2002.