GUANGZHOU - SAIC Motor Corp, China's biggest carmaker, expects to sell about 90,000 of its own-brand vehicles this year, nearly double the original target, its president said on Monday.
The company aimed to sell double that number in 2010, said Chen Hong, speaking to reporters at the Guangzhou Autoshow.
I expect that the auto market will continue growing at a fairly rapid level, said Chen. We are full of confidence for 2010.
Much of the company's growth has come from China's smaller cities, he added.
This year, car sales in third- and fourth-tier cities have significantly outpaced the growth in first- and second-tier cities where a car is no longer a luxury item, said Chen.
Chen said the company forecasts sales of 2.65 million vehicles in total this year, adding that he expected the Chinese government to continue incentive policies to boost the auto market.
Many of those incentives, including reduced sales taxes on small cars and subsidies for buyers in rural areas, are set to expire this year.
China's automakers are increasingly focused on developing their own brands. In 2007 SAIC successfully launched a mid-range sedan line, the Roewe, developed on the basis of technologies acquired from defunct British car maker MG Rover. From January to June, sales of its own-brand Roewe and MG cars jumped 276 percent to more than 40,000.
To date, SAIC has sold its own-brand vehicles domestically, but Chairman Hu Maoyuan hasn't ruled out exporting Roewe cars to Europe or elsewhere eventually.
Chen said that in the company's next five year plan it would make more than 500,000 own-brand vehicles.
We do not dare to say that we are very successful with our own-brand cars, he said. This is a difficult path and there is lots of work to do.
Separately, the company, one of General Motor's partners in China, also planned to begin producing the MG 6 in the UK by the end of 2010, said Chen.
SAIC become the owner of MG Rover's 10,000-unit Longbridge plant in Birmingham, central England after a merger with its much smaller peer Nanjing Automobile Group in late 2007.
The company's third quarter net profit jumped nine-fold to 2.53 billion yuan ($370.6 million), beating an average forecast of 2.16 billion yuan from 4 analysts polled by Reuters and versus 260.8 million yuan a year ago.
Analysts have been upbeat about the automaker's outlook for the full year and beyond, given robust auto demand and a low comparative base in 2008, when the automaker was bogged down by big write-offs for its loss-making South Korean subsidiary, Ssangyong Motor.
(Writing by Don Durfee; Editing by Chris Lewis and Jonathan Hopfner)