SAIC Mo­tor, Dongfeng tum­ble af­ter Bei­jing lim­its new cars

The Pak Banker - - Company& -

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

Newspapers in English

Newspapers from Pakistan

© PressReader. All rights reserved.