Shanghai, May 17 (Gasgoo.com) Most automakers in China posted surging profits in the first quarter of the year as sales increased, but experts say the windfall is not likely to continue in the second half, China Daily reported today.
The combined pre-tax profits of the country's 17 major automakers came to 82.4 billion yuan ($12.06 billion) in the January-March period, up 155% from a year earlier.
SAIC Motor, with net profit of 2.9 billion yuan, topped listed car companies. FAW Car Co posted 182 percent increase in its first-quarter profit. Chongqing Chang'an Automobile Co's first-quarter sales leapt 86%.
Analysts said the surge is due to several factors including continued government incentives that boost sales in smaller cities, overall growth in the economy and recovery of car exports.
In the first four months, vehicle sales in China hit 6.17 million units, up 61% from a year earlier. But growth in car sales began to slow in April with 1.56 million units sold, down 10% from March, and the full-year sales growth may slow to less than 15%.
Prices of locally made passenger vehicles in March and April dropped slightly. Automakers' profits are likely to peak in the second quarter and start to decline in the second half.
An industry analyst noted that the shrinking tax-cut incentives will cool the small car market and increasing stockpiles will drag down vehicle prices and profits.
