All listed car-makers but FAW see H1 profit slide

Shanghai, September 2 (Gasgoo.com) All the listed auto-making companies in China have released their first-half profit reports. Except FAW Car (000800.SZ), all other automakers have seen a downward slide in their H1 profits and in their profit-making capabilities, said xinhuanet.com today.

"The raw material costs have posed huge pressure to the profit-making capabilities of automakers," said an auto industry analyst. "China's auto-makers endured rising pressure in the first half of 2008, and their mid-term profit rates have decreased considerably." In the first six months, the key automakers made total profits of 43.447 billion yuan ($6.36 billion), down 35.38% over one year earlier.

According to China Association of Automobile Manufacturers, there are three major reasons for the profit downturn: the first is the national macro-economic policy adjustment and the global economic depression, the second is a series of natural disasters including the late-January-early February snowstorms in southern China and the May 12 earthquake in Sichuan province, and the third reason is the huge rise in raw material costs and oil prices.

But FAW Car was an exception to the profit slide. Data released by FAW Car showed that the total profit of the company in the first half of the year reached 688 million yuan ($100.58 mln), up 231% over the same period of last year. The net profit also surged by 206% to 505 million yuan.

FAW said the high profit growth was prompted by its market growth both at home and abroad, improved marketing management and cost reduction. Maybe these methods can serve as textbook examples for other listed companies to follow in their profit pursuit.