Shanghai Automotive Co Ltd, the listed unit of Shanghai Automotive Industrial Corp, said that third-quarter profit dropped 16 percent as a result of higher costs at several of its auto parts subsidiaries.

Net income declined to 284 million Yuan (US$35.5 million) during the July-to-September period from 341 million Yuan a year earlier.

The Shanghai-based company said sales gained 15.7 percent to 2.2 billion Yuan in the latest quarter. "The lower profit was caused by increasing costs at auto parts subsidiaries such as gearbox makers and spring manufacturers," said Shanghai Auto's Zhang Tao.

Total profit over the first three quarters increased 1.2 percent year on year to 825 million Yuan, following a 14 percent first-half profit growth of 540 million Yuan. Sales for the first nine months surged 39 percent to 6.68 billion Yuan, the statement said.

As competition intensified among car makers, slow sales for Shanghai General Motors Corp also contributed to the profit decline.

Shanghai Auto, which has invested in several auto parts makers, plans to acquire more assets from SAIC's car manufacturers to boost competitiveness.

Shanghai Auto will sell an additional 3.2 billion shares to fund its 20 billion Yuan purchase of SAIC's stake in Shanghai Volkswagen, Shanghai General Motors, SAIC Motor Manufacturing Co and South Korea's Ssangyong Motor Corp.

The assets transfer will enable Shanghai Auto to become China's largest public traded automaker, generating capital for SAIC's aggressive overseas expansion and development of self-branded models.

Source:佚名