SHARES of China's home-grown carmakers surged yesterday in anticipation that their sales will grow after the central government barred foreign auto brands from a fleet procurement list.

Shanghai-listed Dongfeng Automobile Co rose by the daily 10 percent limit yesterday to 3.81 yuan (61 US cents), outperforming a 0.3 percent rise in the Shanghai Composite Index. Anhui Jianghuai Automobile Co also rose 10 percent to 7.26 yuan. Shenzhen-listed FAW Car added 1.95 percent to 10.48 yuan.

The 412 auto models on the list for government vehicle purchases this year are all Chinese brands, according to the Ministry of Industry and Information Technology. The move is expected to give Chinese automakers a stronger presence in the government fleet procurement, which is now dominated by foreign brands.

John Zeng, an analyst at industrial research firm LMC Automotive, said increasing sourcing of Chinese branded vehicles, which are normally cheaper, was part of the government's plan to control the budget for vehicle purchases.

"The big auto groups will benefit" as they have more models in the mid-to-high class segment, Zeng noted. "It (the new list) also sends a strong signal to support China's own auto industry."

The list, which is collecting public opinion, includes sedans, multi-purpose vehicle, sport-utility vehicles and new-energy vehicles. SAIC Motor, China's largest auto company, has 45 models under the Roewe and MG brands on the list. The list also includes models made by FAW Besturn, Dongfeng, Chery, BYD and Geely.

An official from Shanghai GM, which has Buick models used for the government fleet in Shanghai, said official fleets accounted for a small part of its total sales and the new list would "almost have no impact on its sales," - a view echoed by BMW too.
 

Source:shanghaidaily