SAIC Motor Corp., the biggest automaker in China, signaled the coronavirus outbreak is set to hit its profitability for months to come after earnings slumped in the first quarter of the year.
There will be “major changes" in net income through June, with the virus pandemic being the main risk for the Chinese automobile industry, SAIC said in a filing Wednesday, without elaborating. First-quarter net income at the partner of Volkswagen AG and General Motors Co. plunged 82% to 1.12 billion yuan ($158 million) as revenue fell 48%.
Car sales in China are falling for a third year as the virus outbreak worsens a slump kicked off by a slowing economy, trade tensions and stricter emission regulations. SAIC and other automakers are trying to revive demand with incentive campaigns and new vehicle models.
Buyers of SAIC’s Roewe cars are now getting as much as 41,000 yuan in incentive packages that include direct funding and lowered interest, the company said this month. Last week, SAIC signed a pact to provide fuel-cell powered shuttles and maintenance vehicles for a Shanghai airport.
Shares of SAIC rose 1.3% on Wednesday ahead of the earnings announcement, paring this year’s slide to 24%.
This story has been published from a wire agency feed without modifications to the text.