Domestic automakers report profits
( 2003-08-29 15:31) (Shanghai Daily)
Large domestic automakers are posting profits for the first half of this year despite a wide-spread price war that has slashed thousands of yuan off the cost of many models.
Tianjin FAW Xiali Automobile Co, Shenyang Jinbei Automotive Co and Dongfeng Automobile Co released their first-half earnings reports yesterday, and all of them posted a profit.
Tianjin FAW Xiali, a Chinese partner of Toyota Motor Corp, reported profits of 352.4 million yuan (US$43 million yuan) for the first half, reversing a loss of 406.5 million yuan for the same period last year.
The company said its venture with Toyota, Tianjin Toyota Motor Co, contributed 59 percent of the profit, or 207.4 million yuan.
The company built 19,746 VIOS passenger cars during the period.
The company sold 55,888 sedans in the first half of this year, a 46.45 percent increase year-on-year.
"The price war is squeezing some small automakers out of the market, but it hasn't hurt big automakers too much," said Gu Qun, an analyst from Auto Resources Asia.
Gu said large companies are slashing prices to grab market share from their smaller competitors, which can't afford to cut fees aggressively.
"Lower prices for a firm's older models also can help make market space for its new cars," Gu said.
Shenyang Jinbei Automotive Co, which makes pickup trucks and sport-utility vehicles with General Motors, reversed a first-half loss last year to report a net profit for the first six months of 2003, thanks to accelerating sales, its statement revealed.
The company posted profits of 76.4 million yuan after losing 50.9 million yuan in the first half of 2002.
Though light truck sales dropped 0.5 percent from the same period last year, the company benefited from rising sales of vans, which jumped 28.3 percent, and sport-utility vehicle, which rose 146.7 percent year-on-year.
Jinbei said that it received 153 million yuan in investment from its joint venture with Brilliance China Automotive Holdings Ltd, according to Bloomberg News. The venture, in which Jinbei holds a 49 percent stake, sold 18,058 Zhonghua passenger cars after starting production last August.
Hubei Province-based Dongfeng Automobile Co, whose parent makes cars in China with PSA Peugeot Citroen and Nissan Motor Co, said its first-half profits rose 7.2 percent to 382.9 million yuan.
The company's total sales, however, dropped to 3.5 billion yuan from 3.6
billion yuan a year earlier due to a 13 percent decrease in diesel engine
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