SAIC, Geely see mixed outlook after H1 strength

Two of China's top automakers posted forecast-beating earnings on Wednesday but will struggle to match that performance amid a murky outlook for the world's biggest auto market.

After a bull-run in 2009, car sales in China started to lose steam in May and flagged further in the following months as Beijing applied the brakes to stop its economy from overheating.

"A slowing economy and last year's high comparative base also make it difficult for anyone to match the runaway sales growth a year-ago in the second half," said Zhang Xin, an analyst with Guotai Junan Securities.

SAIC Motor Corp warned of uncertainties ahead, including economic worries, but also said it expects a boost from Beijing's incentives for car buyers, which remain effective until the end of the year.

From April to June, the company booked 3 billion yuan ($441.4 million) net profit, its biggest quarterly earnings and just ahead of a forecast of 2.9 billion.

Geely Automobile Holdings posted a record 804.85 million yuan net profit for the first six months, up 35 percent from a year earlier.

Both SAIC chairman Hu Maoyuan and Geely Chairman Li Shufu, whose privately owned Zhejiang Geely bought Ford's Volvo car unit this month, are confident their companies will hit 2010 sales targets, based largely on a solid first half.

Hu assured shareholders recently that the Shanghai-based automaker can sell 3 million vehicles for the full year, while Li said on Wednesday that the company will reach its target of 400,000 units, up 22 percent from year earlier.

Such results would set SAIC and Geely apart from Warren Buffett-backed BYD, which recently slashed its 2010 sales target by 25 percent.

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