Dongfeng Motor H1 profit up 27% on car sales

Net income climbed to 2.47 billion yuan ($361 million), 0.29 yuan a share, from 1.95 billion yuan, or 0.23 yuan, a year earlier, the company said in a Hong Kong stock exchange statement on Wednesday. Excluding a year-earlier tax gain, profit surged 57 percent, it added.

Dongfeng's passenger-car venture with Nissan boosted sales 24 percent in the period, outpacing the overall market, as the Japanese automaker increased investments in China to counter slumping demand in the U.S. and Japan. Dongfeng's truckmaking arm also sold more vehicles as China's 10 percent growth rate fueled demand from transport companies and builders.

"Dongfeng's comprehensive product line-up, ranging from trucks to compact cars, helps it offset some of the risks caused by market fluctuations,'' said Vivien Chan, an analyst at SinoPac Securities Asia Ltd. in Hong Kong. "Still, Dongfeng and other automakers will face tougher challenges in the second half after countrywide auto sales growth slumped in June and July.''

Peugeot, Honda

The company, which also makes vehicles with Honda Motor Co. and PSA Peugeot Citroen, boosted first-half sales 32 percent to 37.9 billion yuan. Total vehicle sales climbed 28 percent to 587,400.

Dongfeng's share of the passenger-car market rose to 10.2 percent from 9.7 percent, helped by new models, such as the Nissan Qashqai and Peugeot 307. The company may boost full-year vehicle sales to as many as 1.1 million, it said in the statement.

Dongfeng, the biggest automaker listed in Hong Kong, rose 0.7 percent to HK$3.02 in trading in the city before the earnings announcement. The stock has fallen 45 percent this year, compared with a 23 percent decline in the benchmark Hang Seng Index and a 77 percent plunge for Shanghai-listed SAIC Motor Corp., China's biggest automaker.

Dongfeng's venture with Honda boosted sales of Civic compacts and CRV sport-utility vehicles 57 percent in the first half to 84,322 vehicles, according to the automakers' group. Sales at the Peugeot venture rose 1.3 percent to 103,072 units, as a lack of new models stymied demand. The Nissan car venture sold 159,322 vehicles.

Dongfeng's commercial-vehicle sales rose 37 percent to 220,800, giving it a 14 percent market share. The company makes own-brand and Nissan trucks through Shanghai-listed Dongfeng Automobile Co.

China's industrywide vehicle sales rose 19 percent in the first half of this year to 5.18 million, with passenger-car sales expanding 17 percent to 3.61 million, according to the China Association of Automobile Manufacturers.