Gasgoo.com (Shanghai August 30) - GAC subsidiary Changfeng Automobile made a net loss of 21.46 million yuan ($3.37m) so far this year, China Business News reported today. The amount is a tremendous blow to Changfeng. The manufacturer's stock value also dropped a tremendous 114.81 percent, with each share losing .04 yuan (.006) on average.
Changfeng blames its poor performance this year on ever-decreasing sales, increasing managing and labor costs as well as rising value of the yen. Changfeng's decreasing sales are in fact in part due to a much slower automobile market. However, another important cause behind the manufacturer's declining performance is legislation introduced earlier this year limiting the types and specifications of vehicles that can be used for government use. The new protocols essentially bar SUVs from being used as government vehicles. As Changfeng is an SUV manufacturer, most of its sales are to government bodies.
