Gasgoo.com (Shanghai November 11) - Performance reports for the third quarter from various manufacturers have been being announced all during this week. The figures announced have been reflecting poorly on Chinese manufacturers, with several reporting drops in net profit of over 50 percent. When compared to multinational ventures, the performance of domestic companies is far from ideal. Part of this is due to the latter half of the year being a traditionally slow sales season in China. In fact, many domestic manufacturers saw higher sales growth rates in overseas markets than in their home country.
According to a report on xkb.com.cn today, Changan, FAW Car and Guangqi Changfeng all reported losses over the past quarter. Of the three manufacturers, Changan saw the most dramatic fall, with net losses reaching 140 million yuan ($22.09m), a staggering 140 percent less than 2010. FAW Car reported a third quarter loss of 49 million yuan ($7.73m), over 50 percent than last year. The manufacturer's total profit this year is predicted to fall between 372 million and 930 million yuan ($58.69m-$146.73m), 50 to 80 percent lower than last year.
Meanwhile, BYD saw its net profit decrease 85 percent, while the discrepancy between its floating liabilities, at 31.02 billion yuan ($4.89b), and floating assets, at 19.84 billion yuan ($3.13b), continues to remain significantly large.
Several in the industry blame the poor performance by domestic manufacturers on the phasing out of stimulatory policies, appreciation of the yuan, rising interest rates and increasing labor costs, all of which have been especially harmful to local enterprises.
