China's SAIC focuses on home growth, rules out purchases

SAIC Motor Corp., China's largest automaker, has no plans to make overseas acquisitions as it focuses on the home market and expects more than 15 percent sale volume growth this year, its president said today.

Chen Hong also said the company, a key partner of General Motors and Volkswagen AG in China, currently had no plans to list overseas because it had just injected $2.4 billion worth of core assets into its Shanghai-listed unit.

"We have just floated ... on the A-share market through the injection, so we are focusing on improving the A-share company," Chen told reporters in a briefing on the sidelines of China's annual parliament meeting.

Shanghai Automotive in December completed the purchase of nearly all key assets from SAIC Motor, including its stakes in its ventures with GM and Volkswagen.

"We need to further improve the quality of our growth instead of further boosting the size of our assets," he said.

There has been media speculation that SAIC had begun talks with DaimlerChrysler AG about potentially buying its troubled Chrysler group unit. A SAIC spokeswoman denied the report earlier.

SAIC's sales grew 27 percent in 2006 to 1.34 million automobiles, including 915,000 passenger vehicles, he said.

This year's growth would exceed 15 percent, an average growth rate forecast for China's automobile market for 2007, Chen said.

"At the moment, all domestic automakers are working on plans to expand their production as the Chinese market is still growing steadily," Chen said.

SAIC is studying plans to create more synergy with its 51 percent-owned Ssangyong Motor Co., a loss-making South Korean SUV maker, he said.

"How to squeeze more synergy from between SAIC and Ssangyong is an area that we are paying a lot of attention to. We hope to create more synergy in terms of product development, purchase and manufacturing," Chen said.

"That would mean we will consider both the Chinese and Korean markets in the future when SAIC is developing its products," he said, adding that Ssangyong would also do that.

SAIC will not export its own-brand car, Roewe, this year because the first generation is designed for Chinese consumers, Chen said. Eventually, SAIC aims to export the product, he said.

After producing Buicks and Santanas at ventures with GM and Volkswagen for years, SAIC officially rolled out the Roewe -- developed based on acquired technology from MG Rover late last year.

Chen said demand for Roewe "is very good" as SAIC had so far received orders for around 4,000 sedans -- priced at between $29,730 and $35,680 (230,000 yuan and 276,000 yuan) -- a medium to high-end product in China.