By Yuan Fang
China.org.cn staff reporter

Shanghai-based SAIC, China's largest auto maker, has no overseas acquisition plans this year and will be focusing on optimizing its existing resources, said a representative of senior management on Saturday.

Chen Hong, vice chairman of SAIC.

"We don't have any overseas acquisition plans for this year and will remain prudent about such plans," said Chen Hong, vice chairman of SAIC, on the sidelines?of the annual session of the National People's Congress.

The Shanghai-based company has also suspended production in its British factory in the face of a sharp drop in local demand, said Chen. For the time being the company will focus on optimizing its existing resources. "SAIC sold 1.82 million vehicles last year and 1.73 million were sold in China. This is pretty good. And our focus this year will be optimizing our current resources while the global auto market fluctuates," he said.

Asked about the impact of the global economic downturn on China’s auto market, Chen said that China expects to see a drop of 4.7 percent in its first quarter sales this year but it will still outperform other major auto markets. In January, US auto sales fell by 37 percent, European sales by 27.6 percent and Japan and South Korea both by over 20 percent.

The impact of the global economic recession has not been too severe on SAIC. The company's sales in the first two months are expected to gain by 7.6 percent year on year. The company will also make good use of the slew of measures to support the auto industry unveiled by the government.

Among those measures, the government lowered the purchase tax on cars under 1.6 liters from 10 percent to 5 percent from Jan. 20 to Dec. 31. It is also offering subsidies for farmers to purchase vehicles in the countryside. The development of independent brand cars and new energy-fueled cars are also encouraged

"The government supports measures to provide an impetus to China's auto industry and will also help stimulate local sales," said Chen. "We will make best use of them to guide our further development."

Chen also revealed the company is investing 6 billion yuan in research and development of hybrid cars. A 2 billion yuan company was set up in January to research power systems for such vehicles, and another 4 billion will be spent on the research of assembly of complete vehicles and components.

(China.org.cn March 9, 2009)