SAIC Motor, Dongfeng tumble after Beijing limits new cars
BEIJING: SAIC Motor Corp., China's largest automaker, fell the most in two weeks in Shanghai trading after the city of Beijing decided to limit the number of new passenger cars in the nation's capital to ease congestion on the roads.
SAIC Motor declined as much as 3.1 percent, the biggest intraday drop since Dec. 9, and was 1.8 percent lower at 15.72 yuan as of the 11:30 a.m. trading break. Chongqing Changan Automobile Co. lost 3.3 percent to 6.75 yuan in Shenzhen while Dongfeng Motor Group Co. plunged 7.9 percent to HK$13.08 as of the 12:30 p.m. break in Hong Kong, poised for its biggest fall since January 2009. Brilliance China Automotive Holdings Ltd. also fell as much as 8.9 percent.
Beijing, ranked as having the world's worst traffic conges- tion, will issue a quota of 240,000 new vehicle license plates through a lottery system next year, with about 88 percent allocated to individual buyers, according to a statement released yesterday. The quota is just one third of the number of new passenger cars registered this year, said Shin Chung Kwan, an auto analyst at KB Investment & Securities Co. in Seoul.
"Auto sales growth in China may be slowed down by the policy," said Xu Minfeng, an analyst at Central China Securities Holdings in Shanghai. "The market is also worried that more cities may follow Beijing's example to introduce similar policies to curb growth of vehicle ownership." Tax cuts and government subsidies aimed at spurring auto sales have fueled a surge in traf- fic across China as the nation surpassed the U.S. last year to become the world's biggest car market. Officials are looking to allay residents' concerns after Beijing tied with Mexico as having the world's worst traffic, a survey by International Business Machines Corp. this year found. Hyundai Motor Co., South Korea's biggest carmaker which sold 637,686 vehicles in China through November this year, also fell in Seoul trading. The stock fell as much as 3.3 percent, the biggest intraday drop since Dec. 10, to 176,500 won and changed hands at 178,000 won as of 2:03 p.m.
The Seoul-based automaker earlier this week said sales in China may reach 720,000 units next year, with 2010 deliveries projected to surpass 700,000 vehicles. Moreover, SAIC Motor Corp., FAW Car Co. and Chongqing Changan Automobile Co. fell in pre-market trading in Shanghai and Shenzhen after the city of Beijing introduced measures to ease congested roads.
SAIC dropped 1.2 percent to 15.81 yuan in Shanghai, while FAW Car fell 0.4 percent to 16.70 yuan and Changan lost 0.3 percent to 10.30 yuan in Shenzhen. Beijing, ranked as having the world's worst traffic, will limit the number of new passenger vehicles in the Chinese capital to ease congested roads. The government will issue a quota of 240,000 new vehicle license places through a lottery system next year, with about 88 percent allocated to individual buyers, according to a statement released yesterday. Moreover, Toyota Motor Corp., Japan's biggest manufacturer, said leaner manufacturing methods will help it maintain domestic staffing levels while other carmakers focus more on overseas output to escape a strengthening yen.
"As the currency swings, the question is not where we should be manufacturing, but how we approach manufacturing in Japan," Executive Vice President Atsushi Niimi said today at a briefing in Nagoya, central Japan. The carmaker has no plans to stop any domestic production lines, he said.
The automaker has been able to boost labor productivity 7 percent in the past seven months, Niimi said, helping offset an 11 percent jump in the Japanese currency this year. The company makes more cars in Japan than rivals Honda Motor Co., Nissan Motor Co. and Suzuki Motor Corp. combined. -Bloomberg