(Yicai Global) April 14 -- SAIC Motor, China’s biggest carmaker, expects the country’s auto market to contract as much as 11.6 percent this year due to the Covid-19 epidemic and reported its first decline in annual net profit in a decade.

SAIC forecasts a falloff in vehicle sales from 8.1 percent to 11.6 percent this year to between 22.9 million and 23.8 million units, the Shanghai-based firm said in its earnings report published yesterday. But it sees new energy vehicle sales buck the trend by rising 4 percent.

China is still the world's largest car market, the center of auto innovation, as there is still domestic demand for vehicle upgrading, the state-owned company said, adding that the coronavirus epidemic will also not alter the long-term trajectory of the Chinese economy.

The firm's net profit slid 29 percent to CNY25.6 billion (USD3.6 billion) last year from 2018 due to economic pressures as well as changes in domestic subsidies and emissions policies, according to its earnings report. Revenue fell 7 percent to CNY826.5 billion (USD117.2 billion). It projects revenue to dip 6 percent to CNY780 billion (USD110.6 billion) this year.

Last year, SAIC fell 300,000 units short of its sales target of 6.5 million vehicles, as the figure declined 12 percent from a year ago. For this year, the target is 6 million units. In the first quarter of 2020, SAIC sold 679,000 vehicles, down 56 percent. The company's overseas sales were also hit by the virus pandemic.

SAIC's stock price [SHA: 600104] rose almost 1.5 percent to close at CNY18.95 (USD2.68), retaining its position as the biggest Chinese mainland carmaker with a CNY221.1 billion (USD31.3 billion) market cap.

Editor: Emmi Laine